Insurance.

The California Assembly Committee on Insurance proposes substantial changes to insurance regulations through amendments spanning licensing requirements, claims processing, and consumer protections. The legislation expands automatic license denial provisions to include bail and insurance adjuster applications while broadening background reporting requirements for licensees to encompass administrative actions regarding unlicensed professional activities.

The bill modifies claims processing timelines and introduces stronger consumer safeguards, requiring insurers to reimburse uncontested health insurance claims within 30 calendar days or face interest penalties of 15 percent annually. Insurers must automatically include accrued interest in claim payments without requiring policyholder requests. The legislation also extends blanket insurance coverage options to include volunteers working with educational institutions, sports teams, and other eligible organizations.

To enhance transparency in insurance marketing, the bill prohibits advertising accelerated death benefits as long-term care coverage and mandates specific disclosures about the nature of these benefits. Insurers must submit advertising materials to the Insurance Commissioner for review before dissemination. The legislation also refines vehicle service contract regulations, clarifying definitions and coverage parameters while establishing certification requirements for incidental indemnity benefits.

The amendments strengthen enforcement mechanisms by modifying court jurisdiction requirements for insurance fraud cases and establishing structured civil penalties. The bill preserves existing protections for employees who participate in fraud investigations or legal actions against insurers. These changes take effect upon enactment, with certain provisions regarding claims processing timelines phasing in by January 2026.