California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 4.7 - Private Passenger Automobile Rating Factors › Article 4 - Good Driver Discount Policy › Section 2632.14.3 - Letter of Refusal for Good Driver

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) As used in Insurance Code section
				  658,
				  "refuses to accept an applicant" means a failure or refusal, either by an
				  insurer or any of its appointed agents, to allow an applicant for a Good Driver
				  discount policy, as defined in Insurance Code section
				  1861.025,
				  to complete an application for insurance, or to respond to a telephone inquiry
				  about obtaining insurance coverage within three business days of receipt of the
				  inquiry. It also means any attempt or act on the part of an insurer or any of
				  its appointed agents to dissuade an applicant for a Good Driver discount policy
				  from completing an application for insurance, other than statements which
				  inform the applicant about how the applicant can obtain insurance on more
				  advantageous terms from another insurer.
(b) As used in Insurance Code section
				  658,
				  "refuses to issue a good driver discount policy" includes an insurer's failure
				  or refusal to bind coverage within fifteen business days of the date of
				  receipt, by the insurer or any of its appointed agents, of the insurer's
				  application completed by or on behalf of the applicant. The
				  fifteen-business-day time period shall begin from the date either the insurer
				  or any of its appointed agents receives the completed application, whichever
				  date is earliest. The fifteenth day of the fifteen-business-day time period
				  shall be deemed the date on which the insurer "refuses to issue a good driver
				  discount policy."
(c) When an
				  insurer's appointed agent refuses to accept an applicant for a Good Driver
				  discount policy or refuses to issue a Good Driver discount policy when written
				  application has been made by a Good Driver, that agent shall provide the
				  written statement required by Insurance Code section
				  658
				  explaining the reason for the refusal.
(d) As used in Insurance Code section
				  658, the
				  requirements that an insurer "shall furnish the applicant for insurance a
				  written statement within 10 days of the refusal" means that the insurer or
				  agent shall provide the written statement to the applicant by personal delivery
				  within ten calendar days of the refusal date, or if the written statement is
				  provided by mail, shall mail the written statement to the applicant by first
				  class U.S. mail postage prepaid within ten calendar days of the refusal
				  date.
(e) As used in Insurance Code
				  section
				  658, the
				  requirement that the written statement explain the "reason or reasons relied
				  upon for denying insurance coverage" means that the written statement shall set
				  forth in detail all of the facts on which the refusal is based. Mere conclusory
				  statements unsupported by a statement of facts pertaining to the particular
				  applicant shall be insufficient to satisfy the requirements of the
				  statute.
(f) Every applicant who
				  meets the criteria for purchase of a Good Driver discount policy shall be
				  provided, at the time the applicant first inquires about obtaining an
				  automobile liability policy from the insurer or any of its appointed agents,
				  with the following statement:
An insurer which refuses to provide coverage to an
					 applicant who is a "Good Driver" must provide the applicant with a written
					 statement of the reasons it denied coverage. In general, under California law a
					 Good Driver is a person who has not had more than one violation point or more
					 than one at-fault accident resulting in only property damage in the last three
					 years.
Every such applicant inquiring about coverage in person or
					 by mail shall be provided with a written copy of the statement, which shall
					 appear in at least ten-point type. Every such applicant inquiring about
					 coverage by telephone shall be provided with the statement by
					 telephone.
(g) This section
				  shall apply to applications for private passenger automobile insurance
				  only.
(h) This section shall apply
				  only to persons qualified to purchase a Good Driver Discount policy as defined
				  in Insurance Code section
				  1861.025.
1. New
					 section filed 4-5-94; operative 5-5-94 (Register 94, No. 14).
2.
					 Change without regulatory effect amending subsections (a) and (f) filed
					 7-14-2021 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2021, No. 29). Filing deadline specified in Government
					 Code section
					 11349.3(a)
					 extended 60 calendar days pursuant to Executive Order
					 N-40-20.
Note: Authority cited: Sections
						12921 and
						12926,
						Insurance Code; CSAA v. Garamendi (1992) 6 Cal.App.4th 1409. Reference:
						Sections
						658,
						1861.02 and
						1861.025,
						Insurance Code.