California Governor, Jerry Brown, has been very busy approving and rejecting new bills related to insurance. As the deadline for new bills has ended on September 30th, over 20 new bills are currently scheduled to be activated in the coming year. This is an overview of the most important legislation changes that will become active as of January 1st, 2013.
Worker’s Compensation & Medical Disagreements
Arguably the most important new law, Senate Bill 863 will increase the benefits received from worker’s compensation by approximately $750 million on a yearly basis. In addition to this, the bill will also modify the way in which medical disagreements between two parties are resolved by introducing an independent and objective medical review procedure.
Senate Bill 1216 will bring California law up-to-date in regards to the changes to the NAIC Credit for Reinsurance Model Law that was passed in 2011. This bill will define the criteria used by insurance commissioners in order to certify reinsurers.
Self Driving Cars
Senate Bill 1298 will permit people to use self-driving cars on public roads. These cars, also known as “autonomous vehicles” are equipped with new technology that allows them to operate on the road safely without input from a human driver.
Changes Effecting Retiries
Two new laws, Senate Bill 1234 and Senate Bill 923 will seek the implementation of a statewide retirement savings plan for private employees. A California Secure Choice Retirement Savings Investment Board will be created in order to determine if conditions for implementing such a plan exist or can be created. In order for an employee to be eligible he would not have to participate in any other kind of retirement plan set up by his employer.
Long Term Care
One new law, Assembly Bill 999, will update the criteria that the insurance commisioner uses to approve long-term care rates. The insurer will no longer be able to specify an increase in premium for long-term care policies based on asset investment yield changes. There will be two exceptions to this new rule: if the insurer is able to prove that its investment return is lower than the max value interest rate for the contract reserves on those policies or if the interest rate increase is based on new legislation that affects long-term care insurance retroactively.
Longer Grace Period for Expired Insurance
Another Assembly Bill, 1747, specifies that all life insurance policies must now have a grace period of minimum 60 days from the premium due date, time during which those policies are still in effect. This new law allows a policyholder to designate at least another additional person that will receive a termination of policy notice due to an unpaid premium.