Calif. Legislature, Gov. Take Positive Steps on Issues

The Association of California Insurance Companies (ACIC) has commended the Legislature and governor for taking positive, responsible steps this year on major insurance-related bills.

“During the recently concluded legislative session, our state leaders stepped forward and tackled the tough issues: overhauling California’s broken workers compensation system and crafting programs in the aftermath of last year’s fires that will help the victims of these fires and future fire victims,” said ACIC President Sam Sorich.

In April, the Legislature and governor approved significant workers compensation reforms. Although not fully implemented, they are already lowering rates and stabilizing California’s turbulent workers compensation insurance system.

“During the reform debate, it was suggested that state-mandated rate regulation be included as part of the overhaul package. To the governor and Legislature’s credit, the concept of strict rate regulation was rejected in order to give the new reforms a chance to succeed,” said Sorich.

The Legislature and governor also worked together in addressing issues that arose after last year’s devastating fires in Southern California.

Just recently, the governor signed into law three key bills: SB 1855 by Sen. Deirdre Alpert, D-San Diego; SB 64 by Sen. Jackie Speier, D-Hillsborough, and AB 2199 by Assemblywoman Christine Kehoe, D-San Diego. ACIC supported all three measures.

“These bills will help current and future fire victims through expanded mediation, greater policy information and extended periods for reconstruction,” said Sorich. The mediation and time-of-construction bills went into effect upon the governor’s signature in late August. The insurance policy bill becomes effective Jan. 1, 2005.

Another insurance-related bill passed by legislators this year, however, would hurt rather than help California policyholders. The measure, SB 494 by Sen. Martha Escutia (D-Whittier), was sent to the governor in the waning days of the session. The governor has until the end of September to act on the bill.

SB 494, sponsored by the plaintiff attorneys, focuses on fees charged by Medi-Cal providers. Medical care providers now agree to accept set fees for services to Medi-Cal patients. SB 494 would allow medical care providers to charge potentially higher fees for services to Medi-Cal patients who are plaintiffs in liability lawsuits. The bill affects all liability insurance, including homeowners, auto and commercial general liability.

“This bill, if allowed to become law, will affect the wallets of every Californian by increasing insurance rates to pay the additional medical care fees for Medi-Cal patients,” said Sorich, who noted that ACIC has asked the governor to veto SB 494.

“This bill is designed to line the pockets of trial lawyers, not help Medi-Cal patients,” said Sorich.