Governor Signs Quake Legislation, Associations Voice Disappointment

October 3, 2000

As crunch time approached for acting on legislation, SB 1899, considered one of several high-profile insurance measures of this year’s legislative session, received California Gov. Gray Davis’ signature.

Both the Association of California Insurance Companies (ACIC) and the Personal Insurance Federation of California (PIFC) were quick to comment on the negative effect the bill will have on California’s business economy.

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B 1899 allows victims of the Northridge earthquake additional time to file claims against insurance companies for their handling of damage claims from the 1994 temblor.

According to ACIC President Barry Carmody, the bill, which is set to take effect Jan. 1, 2001, will cost insurers more than $15 billion. Meanwhile, PIFC President Dan Dunmoyer said that now that this bill is a law, roughly 600,000 insurance claims made as a result of the 1994 Northridge earthquake could be re-opened even though 99.9 percent of those claims were satisfactorily settled.

According to the Assembly Insurance Committee Oversight Report, “there is absolutely no evidence to substantiate that insurers did not service Northridge quake claimants,” Dunmoyer said.

Gov. Davis had until Sept. 30 to sign or veto bills. Last week, the governor still had roughly 700 pieces of legislation awaiting a decision.

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