AIA Opposing Calif. Regulation on Proof-of-Insurance Cards

The California Department of Insurance (Department) lacks the statutory authority to mandate a single format for proof-of-insurance cards, according to the American Insurance Association (AIA). AIA formally expressed its opposition to the proposed regulation in a letter to the Department.

Under the proposed regulation, all insurance companies would be required to change the cards they currently provide to policyholders as proof of insurance. Insurers would be required to use a single form mandated by the Department. California law requires all drivers to provide proof-of-insurance coverage when they register their vehicles.

“This regulation goes beyond the Department’s authority to regulate how insurers provide proof of insurance to their policyholders,” Bill Gausewitz, AIA assistant vice president, western region, said. “The California Vehicle Code gives the Department authority to approve the form each insurer provides to policyholders. The code also specifies what information must be included on the card. However, the law does not give the Department authority to mandate that all insurance companies use a single form.”

“This regulation will have an adverse effect on all insurers writing personal automobile insurance in California,” Gausewitz continued. “The Department will end up micromanaging insurers by stipulating the layout and size of the cards, and even the weight of the paper. The authority to approve a form does not give the Department the authority to design a form or dictate format.

“Consumers would be the biggest losers under these regulations. Even if the Department had the authority to require a specific format for the card, it would still be a bad idea. Most insurers now give their policyholders a proof of insurance card that is either wallet size or three by five inches. The cards are usually small and easily carried. This proposal requires every driver to get a 3.5- by 8.5-inch card. Try putting that in your wallet,” Gausewitz added.

Topics California Carriers Legislation