California Governor Signs Pet Insurance Bill Challenged By Consumer Group

Aug. 1--Gov. Gavin Newsom has signed a bill that consumer advocates say could make it harder for dog and cat owners to collect pet insurance benefits.

A spokesman announced the signing in a press release earlier this week and declined to comment on the governor's thinking in embracing the legislation.

Among other things, the bill calls on pet insurance policyholders to discuss grievances with their provider before filing a complaint with the California Department of Insurance.

The legislation was sponsored by Insurance Commissioner Ricardo Lara. A Lara spokesman said consumers may still file complaints whether or not they discuss their objections with insurers.

The San Diego Union-Tribune last month reported that Lara accepted and then returned thousands of dollars in campaign donations from a Texas homemaker who shares a home address with an insurance executive whose products include pet insurance.

Lara also accepted and returned tens of thousands of dollars from an insurance executive -- and his spouse -- who marketed a workers' compensation insurance product that had been labeled a "bait-and-switch" policy by a former state insurance commissioner.

Jamie Court of the Los Angeles advocacy group Consumer Watchdog, which urged Newsom to veto the legislation, said it is troubling that the governor would sign a bill that gives pet insurance policyholders the false impression that they have to deal with their insurance provider before seeking help from state regulators.

"The governor should have looked at the ethical failure behind the bill as a clue to its motive," Court said in a statement. "... The governor's pen should not be used to support legislation that is linked to a public corruption scandal."

State campaign disclosures show that Lara collected $7,800 from Darlene Graber of Leander, Texas, in April. Darlene Graber shares a home address with insurance executive Larry Graber, whose company sells pet insurance.

The same disclosures show Lara received more than $45,000 from donors related to the workers' compensation insurance company Applied Underwriters, a Nebraska company that is the subject of dozens of complaints pending before California regulators.

The Union-Tribune reported last month that Lara's office intervened four times in cases to the benefit of Applied Underwriters over companies which bought the policies.

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