Battle Over Financial Privacy Dominates Final Days of Calif. Legislative Session

For the second year in a row, the California Assembly defeated a measure to restrict the information flow within financial services companies, said the American Insurance Association (AIA).

Privacy
“Once again, financial privacy dominated the debate until the very end of the session,” said Bill Gausewitz, AIA assistant vice president, western region. “The effort to restrict information sharing is not over. The financial services industry will have to wrangle with this issue again in 2003.”

SB 773, authored by Senator Jackie Speier (D), was defeated on the final day of the 2002 session by a vote of 34-36 in the Assembly. This bill would have created an opt-in system for information sharing with unaffiliated third parties and an opt-out system for information sharing among affiliated companies or entities operating under joint marketing agreements. Forty-one votes were necessary for passage.

Construction Defects
“Following years of debate, the Legislature approved a bill to give builders the right to repair construction defects,” said Mark Sektnan, AIA assistant vice president, western region. “This is a victory for homeowners and builders. Homeowners will have their houses fixed and builders will avoid costly litigation. While more work ahead is needed to repair the construction liability insurance market, this is a great start.”

SB 800, authored by Senate President Pro Tem John Burton (D) and Assembly Speaker Herb Wesson (D) establishes specific definitions of construction defects. This reform will give homeowners a standard of expectations for the construction of their home. These functionality standards will provide builders, subcontractors, designers and insurers with clear definition of what constitutes a defect.

The bill requires homeowners to give notice to their builder if they discover defects. Once notified, builders will then have the right to repair any alleged defect within a specified amount of time. Homeowners will have the right to pursue litigation if the repairs are not made or are found to be inadequate.

Civil Justice Changes
The Legislature also approved a bill to extend the statute of limitations on personal injury suits and extend the time for plaintiffs to respond to summary judgment motions.

“At the last minute, the plaintiff’s bar went to the Legislature with their wish list,” said Gausewitz. “Trial lawyers initially sought a wide array of civil justice changes but that was reduced to two issues.

“Extending the time to file personal injury lawsuits will make it more difficult for defendants to collect testimony from witnesses, increase the opportunities for fraud and raise the price of premiums because claims will be kept open longer,” Gausewitz explained.

SB 688, authored by Senate President Pro Tem John Burton (D), extends the statute of limitations for filing personal injury and wrongful death actions to two years from one year.

The bill will also extend the time respondents have to react to summary judgment motions to 75 days from 30 days.

Governor Gray Davis (D) has until September 30 to sign or veto these measures, which, if enacted, would take effect Jan. 1, 2003.

Topics California Homeowners Construction