STATE OF = CALIFORNIA
DEPARTMENT OF=20 INSURANCE
45 Fremont Street, = 21st=20 Floor
San Francisco, = California=20 94105
SUBJECT OF HEARING
California Insurance Commissioner = Steve Poizner=20 will hold a public hearing to address the proposed amendments to = Sections 37, 44=20 and 54 of the California Automobile Assigned Risk Plan (CAARP) Plan of=20 Operations.
The Commissioner will consider the = proposed=20 addition pursuant to the authority vested in him by California Insurance = Code=20 Sections 11620 and 11624. Government Code Sections 11340.9(g) and = 11343(a)=20 apply to these proceeds.
HEARING DATE AND = LOCATION
Notice is hereby given that a public = hearing=20 will be held to permit all interested persons the opportunity to present = statements or arguments, orally or in writing, with respect to the = proposed=20 changes at the following date, time, and place:
Date and Time: September 10,=20 2008
10:00 a.m.
Location: California Department = of=20 Insurance
45 Fremont = Street
22nd Floor Hearing = Room
San Francisco, California=20 94105
ACCESS TO HEARING = ROOM
The facilities to be used for the = public hearing=20 are accessible to persons with mobility impairments. Persons with sight = or=20 hearing impairments are requested to notify the contact person (listed = below)=20 for this hearing in order to make special arrangements, if = necessary.
WRITTEN AND/OR ORAL COMMENTS: = AGENCY CONTACT=20 PERSON
All persons are invited to submit = written=20 comments to the Insurance Commissioner on the proposal prior to the = public=20 comment deadline. Comments should be addressed to the contact person for = this=20 proceeding:
Mike Riordan, Staff = Counsel
California Department of Insurance =
Rate Enforcement Bureau
45 Fremont Street, 21st = Floor
San Francisco, CA 94105
Telephone: (415) 538-4226
Facsimile: (415) = 904-5490
The backup agency contact = person for this=20 proceeding will be:
Sara Urakawa, Staff = Counsel
California Department of=20 Insurance
Rate Enforcement Bureau
45 Fremont Street, 21st = Floor
San Francisco, CA 94105
Telephone: (415) = 538-4121
Facsimile: (415) = 904-5490
All persons are invited to present = oral and/or=20 written testimony at the scheduled public hearing.
DEADLINE FOR WRITTEN = COMMENTS
All written materials, unless =
submitted at the=20
hearing, must be received by the Insurance Commissioner at the =
address=20
listed above no later than 5:00 p.m. on September 10, =
2008.
ADVOCACY OR WITNESS = FEES
Persons or groups representing the = interest of=20 consumers may be entitled to reasonable advocacy fees, witness fees, and = other=20 reasonable expenses, in accordance with the provisions of California = Code of=20 Regulations, Title 10, Sections 2662.1-2662.6 in connection with their=20 participation in this matter. Interested persons must submit a Petition = to=20 Participate, as specified in California Code of Regulations, Title 10, = Section=20 2661.4. The Petition to Participate must be submitted to the = Commissioner at the=20 Office of the Public Advisor at the following address:
California Department of = Insurance
Office of the Public = Advisor
300 Capitol Mall, Suite = 1700
Sacramento, CA 95814
Telephone: (916) = 492-3500
A copy of the Petition to Participate = must also=20 be submitted to the contact person for this hearing (listed above). For = further=20 information, please contact the Office of the Public Advisor.
INFORMATIVE DIGEST
SECTION 44
Under current Plan rules, the producer = must=20 either rate the policy and submit a deposit of 25% of the estimated = annual=20 premium or calculate the deposit based on the minimum deposit per = vehicle or=20 power unit, which ever is greater. Producers often do not rate the = policy and=20 base the deposit amount on the minimum premium deposit per vehicle or = power=20 unit. The current CAARP premium deposit amounts for CAIP risks have been = in=20 effect for more than 20 years. Therefore, deposit premiums based on a = per=20 vehicle or power unit are frequently inadequate, resulting in a premium=20 deficiency.
When processing the policy, the = servicing=20 carrier must immediately bill for any deposit deficiency and issue = filings on a=20 timely basis. Depending on the size of the deposit shortfall, a = cancellation=20 notice may be issued. In cases where commercial filings involve an = SR-22, the=20 cancellation date may be extended by the servicing carrier to permit = proper=20 cancellation of commercial filings. This may result in cancellation of = the CAIP=20 policy with an earned premium.
CARRP is proposing increasing the = minimum=20 premium deposit per vehicle or power unit for all classes of commercial = business=20 with the exception of private passenger automobiles. A separate premium = deposit=20 requirement is introduced for extra heavy trucks and truck = tractors.
SECTIONS 37 and 54
The Plan Office issues SR-22s for = private=20 passenger and commercial risks when the application is assigned. = However, the=20 Plan does not issue financial responsibility filings other than SR-22s = for=20 commercial risks. FHA, ICC, DOT, PUC, and DMV filings are made by the = assigned=20 servicing carrier. If the servicing carrier determines that a financial=20 responsibility filing must be issued after they receive the application = and=20 premium, they have five working days to make the filing. The time frame = is=20 applicable provided the application contains the information necessary = to=20 process the filing.
CAIP servicing carriers requested = clarification=20 of the time frame for issuance of financial responsibility filings such = as FHA,=20 ICC, DOT, PUC, and DMV filings. In accordance with Plan rules, servicing = carriers must issue all financial responsibility filings including = SR-22s within=20 five working days of receipt of the commercial application and deposit. = However=20 the servicing carrier performance standard in Commercial Automobile = Part,=20 Section 54 does not provide a specific reference to the issuance of FHA, = ICC,=20 DOT PUC, and DMV filings.
Performance standards for servicing = carrier=20 issuance of commercial financial responsibility filings such as FHA, = ICC, DOT,=20 PUC, and DMV filings, are revised to clarify that the servicing carrier = must=20 make the filings within five working days after receipt of the = application and=20 the deposit, provided all information necessary is provided in the=20 application.
COMPARABLE FEDERAL = LAW
There are no comparable existing = federal=20 regulations or statutes.
LOCAL MANDATE = DETERMINATION
The Insurance Commissioner has = initially=20 determined that the proposal will not result in any new program mandates = on=20 local agencies or school districts.
MANDATES ON LOCAL AGENCIES OR = SCHOOL=20 DISTRICTS OR COSTS WHICH MUST BE REIMBURSED PURSUANT TO GOVERNMENT CODE = SECTIONS=20 17500 THROUGH 17630
The Insurance Commissioner has = initially=20 determined that the proposal will not result in any cost or significant = savings=20 to any local agency or school district for which Part 7 (commencing with = Section=20 17500) of Division 4 of the Government Code would require reimbursement, = or in=20 other nondiscretionary costs or savings to local agencies.
COST OR SAVINGS TO ANY STATE = AGENCY; FEDERAL=20 FUNDING
The Commissioner has determined that = the=20 proposed regulation will result in no cost or savings to any state = agency and no=20 cost or savings in federal funding to the state.
SIGNIFICANT STATEWIDE ADVERSE = ECONOMIC IMPACT=20 ON BUSINESSES AND THE ABILITY OF CALIFORNIA BUSINESSES TO COMPETE=20
The Commissioner has initially = determined that=20 the proposal will not have a significant statewide adverse economic = impact=20 directly affecting businesses, including the ability of California = businesses to=20 compete with businesses in other states. This proposal will have no = effect on=20 the creation or elimination of jobs in California, the creation of new=20 businesses, the elimination of existing businesses in California, or the = expansion of businesses in California.
COST IMPACT ON PRIVATE PERSONS OR=20 ENTITIES
Truckers who are placed by CAARP for = coverage=20 may see an increase in their deposit amount. However this amount would = have been=20 made when the servicing carrier billed for the shortfall.
IMPACT ON HOUSING = COSTS
The Insurance Commissioner has = initially=20 determined that the proposal will not affect housing costs.
IMPACT ON SMALL = BUSINESS
The matter proposed herein will affect = insurance=20 companies and therefore will not affect small business. (Gov. Code = Section=20 11342.610(b)(2)).
SPECIFIC TECHNOLOGIES OR=20 EQUIPMENT
The proposal would not mandate the use = of=20 specific technologies or equipment.
ALTERNATIVES
The Insurance Commissioner must = determine that=20 no reasonable alternative considered by the agency, or that has = otherwise been=20 identified and brought to the attention of the agency, would be more = effective=20 in carrying out the purpose for which the action is proposed or would be = as=20 effective and less burdensome to affected private persons than the = proposed=20 action.
PLAIN ENGLISH
The proposed changes describing = CAARP's=20 proposals are in plain English.
TEXT AND INITIAL STATEMENT OF = REASONS=20
The Department has prepared an Initial = Statement=20 of Reasons addressing the proposed amendments in addition to the = Informative=20 Digest included in this notice. The Initial Statement of Reasons and = this Notice=20 of Proposed Action are available for inspection or copying, and will be = provided=20 at no charge upon request to the contact person listed above. The file = for this=20 proceeding, which includes a copy of the express terms of the proposed=20 regulations, the statement of reasons, the information upon which the = proposed=20 action is based, and any supplemental information, including any = reports,=20 documentation and other materials related to the proposed action that is = contained in the rulemaking file, are on file with the Commissioner and=20 available for review as set forth below.
FINAL STATEMENT OF = REASONS
A final statement of reasons will be = prepared at=20 the conclusion of this proceeding. Upon written or e-mail request to the = contact=20 person listed above, the final statement of reasons will be made=20 available for inspection and copying once it has been prepared. A copy = of the=20 final statement of reasons will also be posted on the Department's web = site.=20
ACCESS TO RULEMAKING = FILE
Any interested person may inspect a = copy of or=20 direct questions about CAARP's proposed amendments, the statement of = reasons,=20 and any supplemental information contained in the rulemaking file by = contacting=20 the contact person listed above. By prior appointment, the = rulemaking=20 file is available for inspection at 45 Fremont Street, 21st = Floor,=20 San Francisco, California 94105, between the hours of 9:00 a.m. and 4:30 = p.m.=20 Monday through Friday.
AUTOMATIC MAILING
A copy of this Notice, including the = Informative=20 Digest is being sent to all persons on the Insurance Commissioner's = mailing=20 list.
AVAILABILITY OF DOCUMENTS ON THE = INTERNET=20
The Initial Statement of Reasons, =
proposed text,=20
and this Notice of Proposed Action will be published online and may be =
accessed=20
through the Department's website at
AVAILABILITY OF MODIFIED TEXT OF=20 REGULATIONS
STEVE = POIZNER
Insurance=20 Commissioner
3
Dated: __6/20______, 2008=20 By:___/s/________________________
Mike Riordan
Staff=20 Counsel