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New Insurance Protections For California Consumers

As of Jan. 1, 2023, Californians will benefit from newly created consumer protections as several new state laws sponsored by Insurance Commissioner Ricardo Lara this past legislative session take effect. The new laws address climate change, expand health access and reproductive care, preserve health protections, protect against fraud, and ensure public safety.

“Protecting consumers is my number one priority,” said Commissioner Lara. “Partnership with the Legislature and Governor Newsom is essential to my Department’s mission of bringing fairness for all in our oversight of the nation’s largest insurance market. I look forward to putting these eleven new laws into effect while taking further actions that benefit California consumers.”

Here is a brief look at the new consumer protection laws that took effect on January 1, 2023.

AB 2238 directs the creation of a statewide extreme heat advance warning and ranking system based on climate and health impact information by the California Environmental Protection Agency, in coordination with the Department of Insurance and the Integrated Climate Adaption and Resiliency program in the Governor’s Office of Planning and Research. This would be the nation’s first-ever extreme heat wave ranking system when it is finalized by Jan. 1, 2025.

SB 852 authorizes the creation of Climate Resilience Districts statewide to help communities mitigate risk in advance of a disaster and promote recovery, a recommendation from the Department of Insurance’s first-ever climate insurance report that would improve access to insurance for all.

AB 2134 establishes the “Reproductive Health Equity Program” to make available grants to providers who offer reproductive and sexual health care free of cost to patients with low incomes and those who lack health care coverage for reproductive health services, including consumers who come to California from other states that have decreased access to abortion care services.

AB 1823 aligns the definition of student blanket policies that are purchased by colleges and universities with the federal Affordable Care Act (ACA). This alignment is necessary to ensure state regulatory oversight and that consumer protections under the ACA are also applicable to these student health policies sold through a university or college to their enrolled students.

AB 2127 is an important follow-up measure to Commissioner Lara’s previously sponsored “Parent Healthcare Act” last year, that would clarify and strengthen notice requirements for Medicare-eligible older adults who are seeking to be added as dependents to their adult child’s individual health insurance policy or health care service plan contract.

AB 2568 creates a ”safe harbor” by stating that an individual or firm providing insurance or related services to a state legal cannabis business does not commit a crime under California law solely for providing that insurance or related service.

SB 972 brings thousands of entrepreneurial sidewalk food vendors into a more equitable and well-regulated food economy by updating the “Safe Sidewalk Vending Act,” which Commissioner Lara authored in 2018 as a member of the California State Senate to end the criminalization of sidewalk vending.

SB 1040 authorizes the Insurance Commissioner to order restitution from persons who sell insurance without the necessary license from the Department of Insurance, including “extended vehicle warranties” sold illegally through robocalls and misappropriation of consumers’ and businesses’ premiums, among other insurance scams.

SB 1242 bolsters anti-insurance fraud efforts essential to protecting consumers from unnecessary economic loss by further clarifying agent-broker anti-fraud education requirements as well as the process by which alleged fraud is reported to the Department of Insurance, in addition to other consumer protection proposals.

New laws that will take effect in July 2023 include:

AB 2205 requires health insurers and health plans offering coverage through Covered California to report annually to the Department of Insurance and the Department of Managed Health Care the total amount of abortion funds. This new law will require transparency and disclosure from health carriers to regulators regarding the amount of separate abortion premium payments that are being collected from policyholders and distributed as claims.

AB 2043 requires all bail fugitive recovery agents, commonly known as “bounty hunters,” to be licensed by the Department of Insurance to ensure that appropriate education and training requirements are met prior to licensure and that all applicants successfully pass fingerprint-based background checks, obtain an appointment from a licensed bail agent or surety insurer, and maintain a minimum $1 million liability insurance policy so that harmed consumers have an avenue to collect damages.

In addition to these new laws, in October, Commissioner Lara enforced the nation’s first wildfire safety regulation to help drive down the cost of insurance for Californians at risk of wildfires, further protecting vulnerable consumers across the state. Commissioner Lara’s regulation is the first in the nation requiring insurance companies to provide discounts to consumers under the Safer from Wildfires framework created by the Department of Insurance in partnership with state emergency preparedness agencies. Under the new regulation, insurance companies are required to make new rate filings including wildfire safety discounts and comply with new transparency measures starting in April 2023.