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Legislative Update: New requirement for California brokers and agents in 2023

Legislative Update is an occasional feature from our Public & Government Affairs team, who provide news on recent legislation and explain how it affects brokers and the dental insurance industry.

This year’s California legislative session has wrapped up. While it produced several bills that impact the insurance industry, Senate Bill 1242 is of particular interest to brokers and agents.

How California Senate Bill 1242 affects brokers

If you’re licensed in California, here’s what this bill means for you in 2023.

  • Fraud education. Starting March 1, 2023, the continuing education requirements for brokers and agents licensed by the California Department of Insurance will include one hour of study on insurance fraud.
  • Suspected fraud form. There are new requirements for when you, as a broker or agent, suspect or know that a fraudulent application is being made. You must submit an electronic form within the California Department of Insurance Fraud Division’s Consumer Fraud Reporting Portal before placing an insurance application with an insurer. The form must be submitted within 60 days after the determination that the application appears to be fraudulent. The Fraud Division will review each report and investigate as necessary.
  • Fraud reporting. After an insurance application has been placed with an insurer, agents and brokers who suspect or know that fraud has been perpetrated must report that information directly to the insurer’s special investigative unit (SIU). You must also furnish all papers, documents, reports or other facts or evidence to the insurer and to the California Department of Insurance upon request, and must assist and cooperate with the Department.

Other California legislative news

In addition to SB 1242, the California Department of Managed Health Care and the California Department of Insurance have finalized the  Summary of Dental Benefits and Coverage Disclosure (SDBC) Matrix. The matrix, the result of Senate Bill 1008, originally passed in 2018, includes a variety of information to help consumers assess their options and understand their plan. Dental insurers must make the matrix available to groups and enrollees.

Both SB 1242 and the SDBC matrix will be effective by January 1, 2023.