California Legislative Session Positive on Insurance Issues

September 15, 2008

This year’s California legislative session has been a relatively positive one for property/casualty insurers and their customers, according to the Association of California Insurance Companies.

Legislators generally seem satisfied that the property/casualty markets are responding to consumers’ needs and expectations. Insurance Commissioner Steve Poizner has done a good job of encouraging competition among insurers while maintaining responsible regulatory oversight of insurer operations, ACIC said.

In the aftermath of the 2007 wildfires, it was believed that homeowners insurance would be the focus of much legislative attention this year. That didn’t happen, ACIC said. There were no widespread claims problems for three reasons:

First, the legislative changes that were enacted, with insurer support, after the 2003 wildfires helped claims handling, ACIC said. Second, Commissioner Poizner established a task force that developed clear guidelines for how claims were to be processed. And third, homeowners insurers are committed to providing their customers with excellent service.

Early in this year’s session, auto repair shops advocated the passage of bills that would have restricted the use of aftermarket repair parts (SB 1059) and would have prohibited an insurer from providing information to claimants about car repair options. The parts bill died. SB 1167, the repair information bill, was amended to require the insurance commissioner to create a task force. SB 1167 was passed by the Legislature in August.

Insurer representatives were successful in convincing lawmakers to reject bills that would have created a new system for regulating workers compensation insurance rates (AB 2692) and would have forced insurers and other businesses to undertake new tax withholding obligations (AB 1848).

Following are other key insurance-related bills in the 2008 session:
-AB 2956 resolves the longstanding controversy over determining whether a person is acting as an agent or a broker.

-ACIC is urging Gov. Arnold Schwarzenegger to sign bills (AB 844 and SB 691) aimed at thwarting the the growing problem of copper thefts. The association is also asking the governor to sign bills directed at encouraging safe driving (SB 28), preventing drunk driving (SB 1190 and SB 1388) and resolving lawsuits involving disability access (SB 1608).

-ACIC is urging the governor to veto a bill (SB 1319) that would expand the liability of insurers and other businesses under with the Unclaimed Property Law. And ACIC is asking for vetoes of bills that would confuse workers compensation apportionment determinations (SB 1115) and delay the conduct of workers compensation medical treatment utilization reviews (AB 2969).

Although the 2008 California legislative session is still proceeding, lawmakers have completed their work on bills that are not part of the state budget, which still has not passed.

Source: ACIC

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