AB 481 To Go Before Calif. Senate Ins. Committee

June 27, 2000

Assembly Bill 481, scheduled to be heard before the Senate Insurance Committee on June 28, would require the Commissioner to include a restitution to policyholders in every settlement with the Department where the Commissioner has determined that the insurer failed to comply with fair claims settlement practices.

Restitution is not an appropriate remedy in every case, according to Sam Sorich, vice president and western regional manager for the National Association of Independent Insurers (NAII). In fact, AB 481, Sorich said, “would force the Commissioner to find losses and injuries where none exist.”

The bill would grant restitution to third-party claimants–something that Californians overwhelmingly rejected four months ago when they voted “no” on Propositions 30 and 31. According to the NAII, AB 481 disregards the voters’ decision that third-party bad faith lawsuits should not be allowed. The NAII will testify against the claims bill tomorrow at the hearing.

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