The department shall adopt an accounting system, as recommended by the State Auditor in Report No. 93030, that will allow the department to accurately identify costs by the regulatory activities and to link the costs to fees collected for those regulatory activities.
Powers and DutiesFee Oversight
Section § 12990
This law requires the department to set up an accounting system as advised by the State Auditor. The system should clearly track costs associated with regulatory activities and connect these costs to the fees collected from those activities.
accounting system State Auditor cost identification
Section § 12991
This law says that starting from October 1, 1995, the insurance department can't charge certain fees unless those fees are set up following the rules in Sections 12992 and 12993.
On and after October 1, 1995, the department may not levy any fee or fees under Section 736 or 12979 unless the fees are created in compliance with Sections 12992 and 12993.
insurance department fees Section 736 Section 12979
Section § 12992
This law requires the department to determine the real cost of conducting insurance examinations and then set the fees for those exams based on that cost. Additionally, for specific administrative tasks and operations under a certain insurance-related article, the department must also calculate the actual costs incurred and set fees accordingly. The idea is to ensure that fees reflect true costs rather than being arbitrary.
(a)CA Insurance Code § 12992(a) The department shall determine the actual cost of providing each examination as authorized under Section 730 and following. The department shall then set each fee levied under Section 736 to be based on the actual cost of providing the examination.
(b)CA Insurance Code § 12992(b) The department shall determine the actual administrative and operational costs arising from the provisions of Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1. The department shall then set the fees assessed under Section 12979 to be based on the actual administrative and operational costs arising from the provisions of Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1.
insurance examination fees cost determination admin fees
Section § 12993
This law requires the department to share the fee schedule and the reasoning behind those fees, which are tied to the real cost of regulatory activities, with several key state bodies. These include the Department of Finance, the Legislative Analyst, and the insurance committees in each legislative house.
The department shall provide the schedule of fees created under Section 12992, as well as the justification that the fees are based on the actual cost of the regulatory activity, to the Department of Finance, the Legislative Analyst, and the insurance committees in each house of the Legislature.
schedule of fees regulatory activity costs Department of Finance
Section § 12994
This law requires that by October 1, 1995, the department must publish a list of all the fees set under certain sections. These fees need to be calculated based on specific rules. By January 15, 1996, an official audit must be done to check if these fees follow the rules.
On or before October 1, 1995, the department shall publish a schedule of all fees levied under Sections 736 and 12979. The fees shall be calculated in accordance with Sections 12992 and 12993. On or before January 15, 1996, the Bureau of State Audits shall complete an audit of the schedule of fees created by this section. The audit shall determine if the fees are in compliance with Section 12992.
fee schedule compliance audit bureau of state audits
Section § 12995
This section outlines the rules for late charges on unpaid departmental bills or assessments related to insurance that remain unpaid 45 days after the invoice date. If a bill is unpaid, a monthly late fee of 1.5% will be applied unless the department decides to waive or modify it. Bills must be sent out within five days of the invoice date, and if sent late, payment is due 45 days from the postmark date. Insurers can contest bills by notifying the department in writing before the due date, and late charges won't apply to the contested portion during review. The commissioner has 30 days to decide on contested billings and notify the insurer. Late charges will be sent to the General Fund, and this rule doesn't apply to the Insurance Department Schedule of Fees and Charges.
(a)CA Insurance Code § 12995(a) Notwithstanding any other provision of this code, all uncontested departmental billings for services or assessments authorized herein, which are not paid within 45 days of the invoice date, shall be subject to a late charge, unless waived or modified by the department. The late charge shall be 11/2 percent per month of the balance due. This late charge shall be compounded monthly.
(b)CA Insurance Code § 12995(b) Billings from the department shall be postmarked within five working days of the invoice date. If the billing is postmarked more than five working days after the invoice date, the insurer shall be given 45 days from the date of the postmark to pay the amount due. In those instances where a billing is postmarked more than five working days after the invoice date, the insurer is required to submit the postmarked envelope with payment to avoid a late charge.
(c)CA Insurance Code § 12995(c) Payments shall be postmarked by the due date to avoid a late charge. Except as provided in subdivision (d), contested billings for which the original amount is paid to the department after the 45 day period shall be subject to the late charge, unless waived or modified by the department. The insurer shall provide written notice of the contested billing and shall set forth the basis for the contestability in writing to the department prior to the due date.
(d)CA Insurance Code § 12995(d) Late charges shall be tolled for the portion of the billing that is contested by an insurer. The commissioner shall consider the material submitted by the insurer and reach a decision on the contested billing within 30 days of receiving written notification that a billing is being contested. The commissioner’s written decision on contested amounts shall be final and written notification, including a revised amount, if any, shall be provided indicating the basis for the decision. This written notification shall also include an invoice date from which an insurer shall be given 30 days to remit payment. This section shall not preclude an insurer from filing a petition for writ of mandate in accordance with the provisions of the Code of Civil Procedure.
(e)CA Insurance Code § 12995(e) All late charges collected pursuant to this section shall be deposited into the General Fund.
(f)CA Insurance Code § 12995(f) This section shall not apply to the Insurance Department Schedule of Fees and Charges pursuant to Section 12978.
uncontested departmental billings late charge 1.5% monthly charge
