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WHAT DO THEY HAVE FOR US THIS YEAR? New California Insurance Laws for 2022

01.03.22 | INSIGHTS

By Andy Downs
Shareholder, San Francisco Office, 415.352.2716

California’s legislature meets every year for approximately nine months (December through August). That gives it ample opportunity to tinker with the statutes applicable to insurance. Most statutes take effect on January 1 of the following year. Some, including one discussed here, do not take effect until July 1. Here are some highlights of what California has given the insurance industry for 2022.

These highlights include changes to the minimum notice for notices of non-renewal and offers of renewal and the criminalization of knowingly false material statements in applying for insurance. Compared to many recent years, 2021 was a relatively quiet year on the property and casualty insurance front.

First, under the new version of California Insurance Code § 678, effective July 1, 2022, the notice period for offers of renewal and notices of non-renewal is subject to the same additional notice periods applicable to documents mail served in lawsuits – five days if mailed inside California, ten days if mailed outside California, and 20 days if mailed from another country. California Code of Civil Procedure § 1013. Because many insurers mail these notices from outside California, that means the 75-day notice of non-renewal period is really 85 days.

Second, while California has always had strong insurer favorable statutes regarding the concealment and misrepresentation of material facts in applying for insurance, there has never been any criminal sanction.  New California Insurance Code § 1871.10 changes that. Now, a knowingly false or fraudulent material statement or material misrepresentation for the purpose of obtaining or amending an insurance policy under any line regulated by the Department of Insurance is a misdemeanor. This means misrepresentations relating to policies providing lines of coverage not regulated by the Department, such as Ocean Marine, are not criminal.

In 2022, the California Legislature will be in session through August 31. Provided it passes a timely budget, the Legislature will be in recess from July 2 to August 1.

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