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SENATE BILL 1273 (SCOTT – 2004)

CHAPTER 730, STATUTES OF 2004

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Insurance Code section 780, 781, and 782 were amended with the passage of Senate Bill 1273 of 2004.  (See Exhibit #1e)  Senate member Scott introduced this measure relating to insurance fraud on February 13, 2004.  (See Exhibit #1a)  The California Department of Insurance sponsored the measure.  (See Exhibits #3a, page 1; #12, document ARC-2; and #13, page 1)

Senate Bill 1273 was assigned to both the Senate and Assembly Committees on Public Safety and the Assembly Committee on Insurance where policy issues raised by the bill were considered.  (See Exhibits #3, #7 and #9)  The fiscal ramifications of the bill were considered by both the Senate and Assembly Committees on Appropriations.  (See Exhibits #2 and #10)  Three amendments were made to Senate Bill 1273.  (See Exhibits #1b through #1d and #2)  Subsequent to legislative approval, Governor Arnold Schwarzenegger signed Senate Bill 1273 on September 24, 2004 and it was recorded by the Secretary of State on that day as Chapter 730 of the Statutes of 2004.  (See Exhibit #1e)
 

The Office of Senate Floor Analyses’ Unfinished Business analysis summarized Senate Bill 1273, as last amended on June 16, 2004, as follows:

This bill (1) prohibits an insurer, agent or broker from making or using a statement that is known, or should have been known, to be a misrepresentation of the terms, benefits, or dividends of an insurance policy, and prohibits a person from making a statement that is known, or should have been known, to be a misrepresentation for the purpose of inducing another person or policyholder to take certain actions, and (2) increases the maximum penalty for such misrepresentation to up to one year and/or a fine of up to $25,000, and provides that when the loss to the victim exceeds $10,000, the maximum fine is three times the amount of that loss.
(See Exhibit #13)