Alliance Files Amicus Brief in

February 20, 2001

The Alliance of American Insurers, based in Downers Grove, Ill., along with several other insurance groups, filed an amicus curiae brief Feb. 15 with the California Court of Appeal in Basich v. Allstate Insurance Co.

The Alliance argues that SB 1899, which took effect this year and re-opened claims arising from the 1994 Northridge Earthquake, is an invitation for fraud or “non-meritous” claims. In its brief, the Alliance contends that SB 1899 violates the contract clauses of the U.S. and California constitutions by impairing insurance policies and settlement agreements.

The case arises from a claim of loss submitted to Allstate following the Northridge quake by the owner of a three-unit residential rental property. Shortly after the lawsuit was filed in March 1997, Allstate paid the full policy limits for damage to the property.

The owner then pursued his claims for bad faith based on Allstate’s alleged delay in investigating and paying the claims.

Following opening statements, the trial court granted Allstate’s motion for non-suit, finding the remaining tort claim was barred by the policy’s one-year contractual limitations period.

The Alliance also contends that SB 1899 violates due process by destroying vested contract rights, and isn’t applicable in the Allstate case or any other case in which judgement was entered before Jan. 1, 2001.

Joining the Alliance in the brief is the National Association of Independent Insurers, the Association of California Insurance Companies, the Personal Insurance Federation of California and Century National Insurance Co.

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