Calif. Commissioner Reacts to Signing of AB 2044

California Insurance Commissioner Steve Poizner issued a statement following Gov. Arnold Schwarzenegger's signing of AB 2044 by Assemblyman Michael Duvall (R-Yorba Linda). The bill, sponsored by the Department of Insurance, establishes a citation program for minor violations of the Insurance Code.

"This bill creates a new way for the Department to enhance consumer protections and encourage producers to follow the letter of the law," said Poizner. "I want to thank Assemblyman Duvall for his hard work in making this bill a reality."

Poizner's office wrote a letter urging the Governor to sign the bill on Sept. 2. A copy of the letter is attached.

When dealing with producers who have committed minor violations of the Insurance Code, the Department has three options: take formal legal action, issue a verbal or written warning, or take no action. This provision allows the Department to issue citations and small, pre-determined fines. This would permit discipline that is more rigorous than a warning, but less time and cost consuming than a full-dress legal proceeding, and provides greater consumer protection than what the current, less flexible statutes offer. Minor violations include, but are not limited to, failure to display a producer license number in advertisements, failure to report a changed background status to the Department in a timely manner, and minor misstatements on a license application or renewal. The newly-established fines range from $200 to $500.