The Association of California Insurance Companies (ACIC) said it is disappointed by this week’s Court of Appeal ruling that struck down a 2003 state law that allows insurers to discount auto insurance premiums, according to ACIC President Sam Sorich.
Sorich noted that SB 841, which was passed overwhelmingly by votes of 34-1 in the Senate and 56-13 in the Assembly, allows auto insurers to give discounts to drivers previously insured by any insurer. SB 841 allows drivers to keep their discounts when they change insurance carriers.
An existing Department of Insurance regulation only allows discounts for the period a driver is insured by his or her current insurer.
“The legislature in passing SB 841 tried to make insurance more affordable by expanding discounts and encouraging more competition among insurance companies,” said Sorich, noting ACIC is a party in the lawsuit.
“We are concerned that the court ruling will remove the discount and at the same time discourage drivers from shopping around for their insurance because they can only receive a discount by remaining with their current insurance company.”
Sorich noted that ACIC intervened in the lawsuit (Foundation for Taxpayer and Consumer Rights v. Garamendi) “because we believe consumers deserve fair discounts and the ability of insurers to offer a variety of discounts helps to keep California’s insurance market vital and competitive.”
He said ACIC is now studying the court ruling and will make a decision whether to appeal to the state Supreme Court at a later date.