Calif. Commissioner Calls Court Ruling on Auto Regs a Victory

August 17, 2006

On Wednesday afternoon, the 3rd District Court of Appeal in Sacramento, Calif., refused to overturn a Superior Court ruling that required insurers to comply with the new auto rating regulations.

“Once again the courts have ruled that insurers must comply with the will of voters who decided in 1988 that how safely you drive is more important than where you live in the pricing of auto insurance,” said the Commissioner John Garamendi in a statement he released after the ruling.

“We are disappointed with the ruling, but to my knowledge, all of PIFC’s members will abide by the requirements and file their auto factor plans at 9 a.m. tomorrow,” said E. Jerry Davies, director of communications for the Personal Insurance Federation of California.

PIFC was joined by the American Insurance Association (AIA) in filing the lawsuit and appeal. Over the past several weeks, the state’s insurance associations have been fighting the decision to implement the new regulations because they believe the new regulations will unfairly raise rates for the majority of drivers. They said giving more weight to a driver’s safety record, number of years driven and annual miles driven than any other rating factors would create rates that are not based on actuarial data, and therefore would be against the law.

Now that the appeal has been denied, insurers must submit new rating plans that comply with the regulations this week.

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