California Legislative Round Up

The following is an update on some of the key property/casualty insurance-related bills pending in the California Assembly and Senate. Measures that garner approval will be considered next in the second house. Measures that were not approved by the deadline are considered two-year bills, meaning they generally will be available for consideration next year.

Bills that Passed their Houses of Origin:

Senate Bills Sent to the Assembly:
SB 46 (Alarcon) Workers’ Compensation Insurance. SB 46 would establish a new system for regulating workers’ compensation insurance rates. A three-person commission would be responsible for setting pure premium rates, experience modifications and expense multipliers. Any insurer that does not want to use the commission’s rate and expenses would have to seek the commission’s prior approval. SB 46 is now pending in the Assembly. ACIC opposes the bill.

SB 422 (Simitian) Small Claims Court: Jurisdiction.SB 422 would increase the jurisdiction of the small claims court from demands not exceeding $5,000 to demands not exceeding $7,500. SB 422 is now pending in the Assembly. ACIC opposes the bill.

SB 150 (Escutia) Insurance: Adverse Underwriting Decisions. SB 150 would change notification requirements for adverse underwriting decisions made by insurers. Rather than supplying reasons for the decision to insureds who submit a written request, SB 150 would require notification in all instances. SB 150 would also require homeowners insurers to submit specified information to claims databases, in order for the databases to be used for underwriting or rating. SB 150 is now pending in the Assembly. ACIC opposes the bill.

SB 603 (Ortiz) Insurance: Credit Ratings. SB 603 would prohibit an insurer from using credit ratings, credit reports, credit scoring models or credit information to underwrite or rate automobile and property insurance policies. SB 603 is now pending in the Assembly. ACIC opposes the bill.

SB 815 (Ortiz) Service of Process. SB 815 would allow plaintiffs to serve a defendant’s insurance company in lieu of publication of the summons where personal service cannot be achieved with reasonable diligence. SB 815 is now pending in the Assembly. ACIC opposes the bill.

Assembly Bills Sent to the Senate:
AB 1132 (Torrico) Vehicle: Impounding: Liens. AB 1132 would limit lien-sale preparation charges in situations where a vehicle has been removed to a garage at the direction of a peace officer. AB 1132 is now pending in the Senate. ACIC is watching the bill.

AB 1183 (Vargas) Insurance Fraud. AB 1183 would extend the existing Jan. 1, 2007, sunset on the obligation of insurers to pay an annual fee of thirty cents for each vehicle insured. AB 1183 is now pending in the Senate. ACIC opposes the bill.

AB 1325 (Vargas) Motor Vehicle Speed Contest. AB 1325 would increase the minimum jail time for a person convicted of engaging in a motor vehicle speed contest from one day to five days. AB 1325 is now pending in the Senate. ACIC supports the bill.

AB 1459 (Canciamilla) Small Claims Court: Jurisdiction. AB 1459 would increase the jurisdiction of the small claims court over cases involving the recovery of money from $5,000 to $15,000. AB 1459 is now pending in the Senate. ACIC opposes the bill.

Measures Deemed Two-Year Bills
AB 528 (Frommer) Civil Actions: Public Health. AB 528 would authorize any person with a “beneficial interest in the outcome” to file a lawsuit to enforce specified California environmental and health laws. Similar in structure to Business & Professions Code Section 17200 (prior to its amendment by Proposition 64), the bill would enable private persons who had suffered no harm to commence the lawsuits to enforce multiple environmental and healthlaws. The need for AB 528, as stated in itsfindings and declarations, is that public agency enforcement of environmental laws has been “severely reduced” because of “severe fiscal crises that have faced California governments at all levels….” Laws that would be enforceable in such actions include the California Constitution, provisions in the Fish & Game, Food and Agricultural, Government, Health & Safety, Public Resources and WaterCodes and regulations adopted pursuant thereto. Harm “to the public health” that would be actionable under AB 528 would include risk that is “threatened, repeated, or ongoing.” ACIC is part of abroad-based coalition, including Proposition 64 supporters, that is actively opposing the bill. In effect, the bill would circumvent Proposition 64. AB 528 remains in the Assembly. ACIC opposes the bill.

AB 1700 (Pavley) Secrecy Agreements: Public Danger. AB 1700 is basically a re-introduction of bills introduced (and defeated)previously to prohibit the use of confidential settlements in cases involving “public dangers.” AB 1700 remains in the Assembly. ACIC opposes the bill.