Calif. Assembly Fails to Pass SB 1925; Takes No Action on SB 1899

July 7, 2000

On July 5, the Assembly Insurance Committee failed to pass Senate Bill 1925. In its original form, the bill would have required insurers to provide earthquake insurance to policyholders at any time, even if they recently declined it.

The current, amended version of the bill now only applies to insurers who are members of the California Earthquake Authority (CEA). Under SB 1925, those insurers would have to offer earthquake insurance to policyholders every year at policy renewal. Current law requires an offer every other year.

During Wednesday’s hearing, testimony was given that most CEA members currently extend earthquake coverage whenever a policyholder requests it.

In other action, the Assembly recessed Thursday without taking action on SB 1899, which has already passed the Senate. This bill would reopen (for one year from the enactment) claims related to the 1994 Northridge earthquake which are now barred because the existing statute of limitations has expired.

SB 1899 has been amended to only apply to claimants who have had previous contact with their insurer. The bill excludes those claimants who have reached a final court settlement with their insurer or a written agreement with their insurer in which the policyholder had legal representation.

Despite the changes, the National Association of Independent Insurers (NAII) continues to oppose SB 1899 because it would reopen cases long ago settled in good faith between insurers and their customers simply because the policyholder did not have an attorney. NAII also opposes the bill because it disregards clear policy language that requires policyholders to file claims within the one-year statute of limitations. The Legislature is scheduled to reconvene on Aug. 7.

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