ACIC Opposes Arbitration And Utilization Review Bills

Sacramento, CA - Following is ACIC's weekly Bill Roundup news release which lists insurance-related bills scheduled for legislative action and/or other measures acted upon by lawmakers.   If you have any questions or comments, please contact Bill Packer, media relations, or Sam Sorich, president of the Association of California Insurance Companies.

Bills Heard the Week of June 14

Assembly Public Safety Committee – June 15

SB 1087 (Alquist) Identity Theft: Restitution.  SB 1087 would authorize restitution for expenses, for a reasonable period of time, incurred by a victim of identity theft for the costs of repairing the victim's credit.  The bill passed the committee 7-0 and was sent to the Assembly floor.  ACIC supports the bill.

Assembly Health Committee – June 15

AJR 42 (Solorio) Medicare Secondary Payer Enhancement Act of 2010. AJR 42 would request Congress and the President of the United States to enact the Medicare Secondary Payer Enhancement Act of 2010.   The resolution passed the committee with a unanimous vote.  ACIC supports the resolution.

Senate Banking, Finance and Insurance Committee – June 16

AB 919 (Nava) Corporations: Political Activities: Objections.  AB 919 would have required corporations that make political contributions to refund a pro rata share of the dollar value of the contributions to any objecting shareholder and further would provide for a civil cause of action (including attorney fees) against any corporation that violates the bill's provisions.  The bill failed passage.  ACIC opposed the bill.

AB 2490 (Jones) Workers Compensation Insurance: Disputes: Arbitration.  AB 2490 would impose requirements on any agreement between an employer and a workers compensation insurer concerning resolution of disputes including, but not limited to, an arbitration clause arising out of a workers compensation policy or endorsement. The bill would require the agreement: (1) be part of the form or endorsement filed with a licensed rating organization and subject to approval by the insurance commissioner, (2) include a choice of law provision that identifies California law as the law to be used to resolve any dispute that arises in California and (3) contain a choice of forum provision that identifies California as the proper venue for any proceeding regarding a dispute that arises in California.  AB 2490 specifies that failure to observe these requirements would render the dispute resolution agreement void and unenforceable.  The bill passed the committee 7-2 and was sent to the Senate Judiciary Committee.  ACIC opposes the bill.

AB 2781 (Assembly Committee on Insurance) Insurance: Guarantee Association.  AB 2781 would delete an order of receivership as a qualification for being an insolvent insurer.  The bill also would extend the California Insurance Guarantee Association's existing bond authority relating to workers compensation claims until Jan. 1, 2013.  The bill passed the committee 9-0 and was sent to the Senate Appropriations Committee.  ACIC supports the bill.

AB 2782 (Assembly Committee on Insurance) Agent Licensing Omnibus Bill.  AB 2782, sponsored by the Department of Insurance, would make a number of changes to the agent licensing laws, including deleting the authority for a fire and casualty licensee to sell any coverage that a personal lines licensee is authorized to transact.  The bill would divide the fire and casualty broker-agent license into two insurance license types:  property broker-agent licenses and casualty broker-agent licenses.  AB 2782 would designate the number of hours required for ethics training in prelicensing study.  The bill would retain the requirement that an investment company in which a domestic insurer may make excess funds investments be domiciled in the United States, but would delete the requirement that all assets be held in the United States.  The bill passed the committee 9-0 and was sent to the Senate Appropriations Committee.  ACIC supports the bill.

Bills to be Heard the Week of June 21

Senate Business, Professions & Economic Development Committee – June 21

AB 2111 (Smyth) Service Contracts.  AB 2111 would clarify the requirements to provide a pro rata refund to any consumer who purchases a vehicle service contract and subsequently decides to cancel it.  ACIC supports the bill.

Assembly Business, Professions and Consumer Protection Committee – June 22

SB 350 (Yee) Motor Vehicle Insurance: Automobile Repairs: Restraint Systems.     SB 350 would codify the existing regulation which prohibits the use of non-original equipment manufacturer aftermarket crash parts unless the insurer warrants that those parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance.   The bill also would require parts supplied by auto body repair shops to contain information identifying the manufacturer.  ACIC opposes the bill.

Assembly Health Committee – June 22

SB 880 (Yee) Public Safety: Snow Sport Helmets.   SB 880 would mandate the use of helmets for children under the age of 18 who ski or snowboard.  ACIC supports the bill.

Senate Labor and Industrial Relations Committee – June 23

AB 933 (Fong) Workers Compensation: Utilization Review.   AB 933 would require a physician who conducts a utilization review of workers compensation medical treatment to be licensed in California.  The bill would also require re-approval of a medical provider network plan every three years and would require the administrative director to require that procedures be established to ensure that a list of the medical providers is accurate and updated semiannually.  Finally, the bill would expressly provide that specified items are elements of a claim file that affect the employer's premium.  ACIC opposes the bill.

About ACIC

The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California. ACIC member companies write 41.8 percent of the property/casualty insurance in California, including 57.3 percent of personal auto insurance, 45.7 percent of commercial automobile insurance, 40 percent of homeowners insurance, 32.5 percent of business insurance and 43.4 percent of the private workers compensation insurance.  PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association.

Source: Association of California Insurance Companies

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