ACIC Views California Legislative Agenda

ACIC president Jeffrey Fuller said yesterday that the workers' comp issue will not be a focus for his group now that the last of its workers compensation carrier members–Majestic Insurance Co. — has left the organization.

"It's becoming an economic issue for a lot of these insurance companies" because many of them belong to several trade groups, he said.

Mr. Fuller said that the workers compensation carriers that left the ACIC are all members of the national trade group Alliance of American Insurers.

He said one measure that does concern ACIC is Senate Bill 11, which addresses the confidentiality of certain writings and prohibits certain agreements.

The legislation, introduced in December 2000, is based on the premise that any "secrecy agreement" that prohibits disclosure to the public or to public safety agencies of evidence of defective products or environmental hazards is "injurious to the health, safety and well-being" of Californians.

Mr. Fuller noted that the bill has moved out of the Senate and is currently in the Assembly and that it is likely to remain a "live" bill for the rest of the year.

Concerning privacy legislation, Mr. Fuller said there is "a significant possibility" that the governor will propose a privacy bill, which will "receive a lot of attention and support."

In the area of personal lines, mold damage coverage is likely to receive increased attention, he said.

Janine Gibford, ACIC's lobbyist and personal lines advocate said ACIC expects to see California legislation proposed that would make revisions in the law similar to the regulatory changes ordered by the Texas insurance commissioner, which set a new framework for mold damage coverage in certain homeowners' insurance policies.

Ms. Gibford observed that some California homeowners insurance companies are already starting "to file for mold coverages [with the state regulator], either putting a limit on it or excluding it completely."

Another area that the ACIC will be monitoring is the state's low-cost automobile insurance pilot program, which was initiated a couple of years ago.

Ms. Gibford said both chambers of the legislature have expressed a desire to "tweak" the program "to make it more appealing to the target population, such as by increasing the poverty level or the value of the vehicle."

Automobile policy rate regulation is another topic of great interest to the ACIC, said Mr. Fuller.

"We've been informed by the department that they're actually making some changes," said Ms. Gibford. It is her understanding that the Department plans to simplify the form for rate filing by clarifying its language.

However, the department also has talked about making changes in the 16 optional rating factors allowed by state law, she added. "We don't know what those changes might be ?[but] we don't anticipate anything being removed or added at this point," Ms. Gibford said.

The recent resignation of David Knowles as chief executive officer of the California Earthquake Authority may usher in other changes at the CEA, said Mr. Fuller, adding that many of those changes would have to come from the legislature.

Ms. Gibford believes that at the moment the CEA will see only changes in management. "Until there are more finite answers about what could happen to the tax-exempt status of the CEA, no one is prepared or willing to make any aggressive move to actually change the CEA in any form at this time," she stated.