IBA West Outlines 2001 California Legislative Successes

October 2, 2001

The end of the 2001 legislative session brought a number of legislative successes for independent agents and insurance brokers, including the passage of a bill designed to make technical corrections to last year’s agent-licensing law and the defeat of a privacy bill critics said could have hurt an already struggling California economy.

“Our top priority this year was to enact ‘clean-up’ legislation on AB 393, last year’s landmark producer licensing reform bill,” said ABL Lobbyist John Norwood, also explaining any attempts to undermine the original bill in the clean-up bill were prevented. The clean-up bill, SB 63, makes technical changes to AB 393 and has been signed by Governor Gray Davis.

AB 393 requires that anyone transacting insurance in the state be licensed by the California Department of Insurance. “The new legislation provides some technical ‘fine-tuning’ to the 27-page bill passed last year,” Norwood said. “AB 393 helps insure consumers will only purchase insurance from a qualified and licensed professional.”

As expected, privacy became a major issue in the 2001 Legislature. Thirty bills were introduced which would have added substantially to the privacy requirements of the federal Gramm-Leach-Bliley-Act. Analysts concluded the defeated bills could have hurt small business and made additional paperwork for agents and brokers.

IBA West and ABL also contributed to a successful effort at exempting agents from anti-telemarketing legislation. The bill, SB 773, creates a “do not call” list at the Department of Consumer Affairs that consumers can be added to at the cost of $1.

Companies can then be fined when placing calls to consumers on the list. Thanks in part to ABL efforts, the bill exempts calls to current customers and allows small companies to use the phone to attract new business.

Another victory for agents and brokers was the defeat of two measures that would have prohibited confidentiality of documents obtained in civil litigation. ABL Counsel Dietmar Grellmann explained that if the bill would have passed, an attorney could have obtained and made public a company’s business records simply by filing a lawsuit with unsubstantiated allegations.

Grellmann said many of the other bills considered this year including those regarding workers’ comp, privacy and document disclosure are likely to be considered again next year. The Governor has until Oct. 14 to sign or veto bills passed by the Legislature.

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