SACRAMENTO, Calif. –September 18, 2007 - The passage of bills unmasking bad drivers, increasing funds for fraud investigations, providing financial security for earthquake insurance policies and making capital available to write more workers compensation insurance in California highlighted the Legislature’s productive 2007 regular session, according to Sam Sorich, president of the Association of California Insurance Companies (ACIC).
“The Legislature, which concluded its 2007 session last week, effectively addressed a number of key insurance issues that were supported by insurers and will benefit their customers – California’s consumers,” said Sorich.
One exception to the overall positive outcome of this year’s session was SB 93, which was approved by the Legislature just hours before it adjourned. The bill would prevent a jury from receiving evidence that a Medi-Cal recipient who is a plaintiff in a lawsuit had his or her medical bills paid by Medi-Cal. This ban on evidence would increase damage awards, which in turn would increase liability insurance rates for drivers, homeowners and businesses. ACIC is asking Gov. Arnold Schwarzenegger to veto SB 93.
Sorich noted that ACIC followed nearly 200 insurance-related bills in 2007 – the first half of the Legislature’s two-year session. Following are key, ACIC-supported bills that were approved this year and sent to the governor:
SB 645 by Assemblyman Mike Feuer (D-Van Nuys). This bill, already signed into law and effective Jan. 1, 2008, prevents motorists from attending traffic safety schools to mask serious traffic violations, such as hit-and-run, reckless driving and driving under the influence violations.
AB 1401 by Assemblyman Greg Aghazarian (R-Stockton). This bill would increase from $1,300 to $5,100 the annual assessment on each insurer to fund activities in the Department of Insurance’s Fraud Division. The bill would provide a substantial boost in resources for funding the fight against insurance fraud by, among other things, allowing the department to fill 22 vacant positions in its fraud unit. The bill is awaiting action by the governor.
SB 430 by Sen. Mike Machado (D-Linden). This bill would assure the California Earthquake Authority’s (CEA) fiscal strength by creating a $1.3 billion assessment on insurers that participate in the CEA. The new assessment would go into effect when an existing insurer assessment expires on Dec. 1, 2008. The CEA is a privately funded, government-run entity that provides earthquake coverage for participating insurers’ homeowners policyholders. The bill is awaiting action by the governor.
SB 316 by Assemblyman Leland Yee (D-San Francisco). The bill would eliminate an unnecessary and duplicative reserve requirement for workers compensation insurance. The repeal of this requirement will make capital available which will allow insurers to write more workers compensation insurance. The bill is awaiting action by the governor.
The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California. ACIC member companies write 41.8 percent of the property/casualty insurance in California, including 57.3 percent of personal auto insurance, 45.7 percent of commercial automobile insurance, 40 percent of homeowners insurance, 32.5 percent of business insurance and 43.4 percent of the private workers compensation insurance. PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association.