The following statement was issued by Sam Sorich, president of the Association of California Insurance Companies (ACIC), in conjunction with today’s Assembly Insurance Committee hearings.
“The Assembly Insurance Committee today is considering three so-called “pro-consumer” insurance bills that will in fact hurt most California homeowners by restricting availability and forcing insurers to charge rates that do not adequately reflect risks.
“The bills, erroneously wrapped under the guise of post-Southern California firestorm relief measures, are SB 1315, SB 1474 and SB 1323.
“In reality, they have nothing to do with last year’s horrifying fires.
On the other hand, bills that would help future disaster victims are gaining momentum as they move through the Legislature.” The four key bills are:
· SB 1855, which would require full disclosure of homeowner insurance coverages and costs. The bill would expand provisions now contained in state law that requires insurers to disclose and describe their policy coverages to customers.
· SB 64, which would establish a mediation program for disputes between policyholders and their insurers arising from claims resulting from a disaster that has been declared a state of emergency by the governor.
· AB 2199, which would set 12 months after the payment of actual cash value as the minimum time limit for the repair or rebuilding of damaged property covered by replacement cost policies. The minimum time limit would be set at 24 months for losses resulting from a state of emergency.
· AB 2962, which would require an insurer to renew a policy when the home is destroyed by a catastrophe.
The bills that would reportedly be harmful to California homeowners are:
· SB 1315, which would give the insurance commissioner the authority to approve homeowners insurance policy forms. This new power would extend to the policies that are currently in use. This bill is unconstitutional because it would allow the commissioner to tamper with an existing contract – the insurance policy. And, if enacted, it could leave some consumers without insurance coverage if the forms (policies) are altered mid-term by the commissioner.
· SB 1323, which would prohibit an insurer from using credit information for underwriting and rating of homeowners policies. This bill would hurt homeowners insurance availability and force insurers to charge rates that do not reflect the risk of loss.
· SB 1474, which would restrict an insurer’s ability to consider past claims when the insurer underwrites or rates a policy. This bill would force consumers who have good claims histories to pay more than they should for homeowners insurance.
Was this article valuable?
Here are more articles you may enjoy.