Amended  IN  Senate  July 02, 2019
Amended  IN  Assembly  April 11, 2019
Amended  IN  Assembly  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1602

Introduced by Assembly Member Low

February 22, 2019

An act to amend Section 1764 of, and to add Chapter 4 (commencing with Section 12130) to Part 4 of Division 2 of of, the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1602, as amended, Low. Use of firearm insurance.
Existing law requires the Department of Insurance, headed by the Insurance Commissioner, to regulate specific classes of insurance, including liability, burglary, and legal insurance. Existing law prohibits an insurer from transacting any class of insurance that is not authorized by its charter. Under existing law, a surplus line broker is guilty of a crime if the broker issues evidence of insurance in violation of state law, as specified.
This bill would, on and after January 1, 2020, prohibit an insurance policy from covering a loss related to the use of a firearm, except for loss of, or damage to, property related to the use of a firearm. The bill would exclude an automobile insurance policy, a homeowners’ insurance policy policy, or a commercial insurance policy from that prohibition, if specified criteria are met. The bill would authorize an insurer to issue or renew a commercial policy that insures a licensed firearms dealer against liability for, among other things, injury to or death of a person as a result of the theft, sale, lease, or transfer of a firearm or ammunition. The bill would also prohibit a surplus line broker from issuing evidence of insurance for a loss related to the use of a firearm for a home state insured, or causing or purporting to cause a nonadmitted insurer to insure a loss related to the use of a firearm. Because a violation of this provision by a surplus line broker would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1764 of the Insurance Code is amended to read:

1764.
 (a) A licensed surplus line broker may issue evidence of insurance for a home state insured, including binders, covernotes, and certificates evidencing the placement of insurance with an eligible nonadmitted insurer, and with prior written authority, may issue policies of the insurer.
(b) Certificates may be issued pursuant to subdivision (a) or (b) of Section 1764.2. The certificates shall be in the name of the surplus line broker and not in the name of the nonadmitted insurer, shall be signed by the surplus line broker, and shall contain all of the matters specified in Insurance Code Section 381.
(c) Policies may only be issued pursuant to subdivision (a) of Section 1764.2. The policies shall contain all of the matters specified in Section 381 and shall be countersigned by the surplus line broker.
(d) A surplus line broker shall not issue evidence of insurance for a home state insured, or cause or purport to cause a risk to be insured by a nonadmitted insurer, if the risk is prohibited by Section 12130.

SECTION 1.SEC. 2.

 Chapter 4 (commencing with Section 12130) is added to Part 4 of Division 2 of the Insurance Code, to read:
CHAPTER  4. Firearm Insurance

12130.
 (a) A policy of insurance issued or renewed on or after January 1, 2020, shall not cover a loss related to the use of a firearm, except for loss of, or damage to, property.
(b) (1) Subdivision (a) does not apply to a any of the following:
(A) An automobile insurance policy that covers the risks described in Section 116, without an exclusion of loss resulting from accident or physical injury or death of a natural person as described in subdivision (a) of Section 116.
(B) A homeowners’ insurance policy or other insurance policy that covers the risks described in subdivision (a) of Section 675, a 675.
(C) A commercial insurance policy that covers the risks described in subdivision (b) of Section 675.5, or an 675.5.
(D) An umbrella liability, excess liability, or excess property insurance policy described in subdivision (b) of Section 676.6.
(2)  Notwithstanding subdivision (a), an insurer may issue or renew a policy of commercial insurance for a licensed firearms dealer that insures against liability for loss of or damage to property and for injury to or death of a person as a result of the theft, sale, lease, or transfer or offering for sale, lease, or transfer of a firearm or ammunition, or any other operations of the business and business premises.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.