SECTIONS 1857-1857.4 - California Statutes

INSURANCE CODE

SECTION 1857-1857.4

1857. (a) Every insurer or advisory organization and every group,
association, or other organization of insurers that engages in joint
underwriting or joint reinsurance shall maintain reasonable records,
of the type and kind reasonably adapted to its method of operation,
of its experience or the experience of its members and of the data,
statistics, or information collected or used by it in connection with
the rates, rating plans, rating systems, underwriting rules, policy
or bond forms, surveys, or inspections made or used by it so that
those records will be available at all reasonable times to enable the
commissioner to determine whether that organization, insurer, group,
or association, and, in the case of an insurer, every rate, rating
plan, and rating system made or used by it, complies with the
provisions of this chapter applicable to it. The maintenance of those
records in the office of an organization of which an insurer is a
member or subscriber shall be sufficient compliance with this section
for any insurer maintaining membership or subscribership in that
organization, to the extent that the insurer uses the rating plans,
rating systems, or underwriting rules of that organization. The
records shall be maintained in an office within this state or shall
be made available for examination or inspection within this state by
the commissioner at any time upon reasonable notice.
(b) There are established data advisory committees to assist the
commissioner in making special calls for one or more lines or types
of insurance to which this chapter applies that are commercial
insurance as defined in Section 675.5 and to make available the types
of reasonable records that subdivision (a) requires insurers, and
advisory organizations to maintain and make available. No data
advisory committee shall have any authority to veto, amend, or alter
any request for the reporting of records or information by the
commissioner, but shall only provide advice to the commissioner
relative to methods and efficiency in the collection of records and
information as set forth in subdivision (c).
(c) Each data advisory committee shall review all proposed
industrywide requests for records and information by the commissioner
at least one time but shall not review substantially the same
request made on a recurring or ad hoc basis in the future. No later
than 10 business days after receipt of each proposal, the data
advisory committee may advise the commissioner as to both of the
following:
(1) Whether the desired records and information are already
available in other forms or are being maintained by one or more
insurance advisory organizations that may be able to provide the
records and information to the commissioner on a more efficient and
cost-effective basis.
(2) Whether the format and contents of the proposal are likely to
elicit useful information and make recommendations as to changes in
the format or contents of the proposal.
If the data advisory committee cannot reach unanimous agreement on
its advice to the commissioner, any member may provide his or her
own advice. Any written advice to the commissioner by the advisory
committee and by individual members shall be submitted
simultaneously.
(d) Each data advisory committee shall consist of the following
members:
(1) The commissioner or his or her representative.
(2) A representative of the department's statistical unit.
(3) No more than three representatives from advisory organizations
operating under this article that maintain insurer records for the
lines or types of insurance that are the subject of the call.
(4) Three representatives from various sizes of insurers chosen by
the commissioner that underwrite diverse risks for the lines or
types of insurance that are subject to the call.
(5) At least one but not more than two qualified consumer
representatives chosen by the commissioner. As used in this section,
"qualified consumer representative" means a person who has experience
with the collection, use, and analysis of insurance data and who can
show that he or she represents the interests of consumers as
demonstrated by, but not limited to, a history of that type of
representation in administrative, legislative, or judicial
proceedings.
Any group, association, or insurer that represents persons
described in paragraphs (1) to (5), inclusive, may submit to the
commissioner the names of those persons for consideration of
appointment to the advisory committee.
(e) Each data advisory committee shall meet telephonically.
Members of an advisory committee shall receive no compensation.
(f) An insurer may fulfill any obligation to maintain, record, or
report information under Article 6.5 (commencing with Section 1857.7)
by reporting records required by subdivision (a) to an advisory
organization that maintains the insurer's records with those records
of other insurers and reports the aggregate records of insurers to
the department according to reasonable schedules approved by the
commissioner. The aggregate reports shall be made available by the
commissioner for public inspection at the department, but shall not
disclose the information of an individual insured, insurer, or
insurer group.
(g) Upon a request made by any person to the commissioner in
conjunction with an insurer's pending rate application, the advisory
organization shall, within five business days, send to the
commissioner the information in its possession regarding the
individual insurer that Article 6.5 (commencing with Section 1857.7)
specifically requires to be submitted with those filings. The
information sent to the commissioner under this subdivision shall be
available for public inspection at the department.
(h) Except as otherwise permitted or required by this section, no
advisory organization shall provide an individual insurer's
information to any other insurer, person, or organization, other than
rates, rating systems, and rating plans that have been filed with
the commissioner and are available for public inspection at the
department.
(i) The commissioner may adopt rules necessary to implement this
section.
(j) Nothing in subdivisions (b) to (i), inclusive, shall be
construed to affect any of the following:
(1) Any authority granted to the commissioner under this code to
obtain aggregate or individual insurer data or policy records from
advisory organizations or insurers.
(2) Any industrywide data reporting requirements and standards
that might exist in this chapter.
(3) The right of any person under any provision of this code,
including Section 1861.07, to obtain and inspect at the department
the aggregate or individual records of insurers maintained by
advisory organizations.

1857.1. The commissioner shall, at least once every five years, and
may as often as may be reasonable and necessary, make or cause to be
made an examination of each licensed rating organization, and he
may, as often as may be reasonable and necessary, make or cause to be
made an examination of any advisory organization or group,
association or other organization of insurers which engages in joint
underwriting or joint reinsurance.
In lieu of any such examination the commissioner may accept the
report of an examination made by the insurance supervisory official
of another state.
In examining any organization, group or association pursuant to
this section the commissioner shall ascertain whether such
organization, group or association, and, in the case of a rating
organization, any rate or rating system made or used by it, complies
with the requirements and standards of this chapter applicable to it.

1857.2. The commissioner may, at any reasonable time, make or cause
to be made an examination of every admitted insurer transacting any
class of insurance to which the provisions of this chapter are
applicable to ascertain whether such insurer and every rate and
rating system used by it for every such class of insurance complies
with the requirements and standards of this chapter applicable
thereto. Such examination shall not be a part of a periodic general
examination participated in by representatives of more than one
state.

1857.3. The officers, managers, agents and employees of any such
organization, group, association or insurer may be examined at any
time under oath and shall exhibit all books, records, accounts,
documents or agreements governing its method of operation, together
with all data, statistics and information of every kind and character
collected or considered by such organization, group, association or
insurer in the conduct of the operations to which such examination
relates.

1857.4. The reasonable cost of any examination authorized by this
article shall be paid by the organization, group, association or
insurer to be examined.