California’s Governor Record ‘Solid’ on Insurance Legislation

Gov. Jerry Brown saw over a dozen bills related in some way to insurance come across his desk, with a bill to approve driverless cars, a bill to overhaul California’s workers’ compensation system among them.

He’s signed or vetoed most of the bills he’ll take up this year, but it’s hard to say definitively whether Brown was a friend of foe to the insurance industry.

But you can say he’s been mostly on solid ground with the industry.

“I think over the last two years he’s had a pretty solid record with the insurance industry,” said Mark Sektnan, president of the Association of California Insurance Companies.

Last year Brown vetoed several insurance bills related to workers’ compensation, saying he wanted to see more comprehensive reform of the state’s massive system for injured workers, earning him praise from a pair of California pro-business groups focused on workers’ comp.

The groups, the California Coalition on Workers’ Compensation and the Workers’ Compensation Action Network, gave Brown a perfect record on pieces of workers’ comp-related legislation that reached his desk that they wanted him to sign, and those bills they wished him to veto.

This year brought a lighter than usual load of insurance-related bills to Brown’s desk, thanks in part to several bills being defeated by the industry.

“There really aren’t a lot of insurance bills in play,” Sektnan said. “Most of the big bills that we were opposed to we stopped in the legislature.”

Most of Brown’s energy may have been focused on Senate Bill 863, which promises to increase benefits for injured workers by nearly $750 million a year, and reduce workers’ comp premiums for employers.

The bill was passed on the last day of regular session after a personal appeal from Brown. He signed the bill two weeks ago.

Brown also recently signed Assembly Bill 1708, which will allow drivers to show proof of insurance through via a smart phone or other electronic device.

“With California being the home of Silicon Valley it makes sense that we can use technology that was made here to show proof of insurance,” Sektnan said.

This week he signed a law that lets self-driving cars onto public roads. Brown rode to the signing ceremony at Google Inc. headquarters in the passenger seat of a vehicle that steered itself, a Prius modified by Google.

Brown on Tuesday vetoed Senate Bill 750, which would have denied owners of BMWs, Mini Coopers and select other vehicle brands the ability to have their car keys quickly and conveniently replaced if they were lost, stolen or broken, a bill that was opposed by the Automobile Club of Southern California.

“We applaud Gov. Brown for doing the right thing by consumers,” said Steve Finnegan, the Auto Club’s government affairs manager. “If SB 750 had become law, these select few car manufacturers would have been permanently exempted from a California law that has enabled thousands of car owners to obtain replacement car keys as soon as they are needed.”

However Brown wasn’t perfect –in the the eyes of Sektnan, at least.

Brown signed Assembly Bill 2160, which declares the assets of insurance companies to be non-admitted if they are from companies that do business directly or indirectly with Iran.

Two years ago the state developed list of companies they believed are doing business with Iran.

“These are not direct investments, they are indirect, and it’s difficult for an insurer to determine what a company is taking their money and investing it into,” Sektnan.

For example two companies on the list are Royal Dutch Shell and Siemens, and it’s difficult to know what such massive international corporations are doing with their investments, he added.

Other insurance related legislation Brown has signed includes:

AB 1708 allows insurers to issue written verification of coverage to the insured via a mobile electronic device upon the request of the insured.

AB 1854 makes it a misdemeanor for a person to install, reinstall and rewire a vehicle’s computer system or air bag system so that it falsely indicates the system is in proper working condition.

AB 1888 allows, under limited circumstances, a licensed commercial driver to attend traffic school.

AB 1971 increases the maximum fine for junk and second-hand dealers who knowingly purchase metals used in transportation or public utility services from $250 to $1,000.

AB 2084 changes the definition of industrial insured by increasing the number of employees an industrial insured is required to have to 50 and by increasing the industrial insured’s aggregate annual premiums for insurance for all risks other than workers’ compensation and health coverage to no less than $50,000.

AB 1558 extends existing law that provides that neither a public agency that operates flood control and water conservation facilities nor its employees shall be liable for injuries caused by the condition or use of unlined flood control channels or adjacent groundwater recharge spreading grounds under prescribed conditions.

AB 53 requires each admitted insurer with gross annual revenues exceeding $100,000,000 to report to the commissioner its procurement efforts for women, minority, and disabled veteran business enterprises.

AB 1631 eliminates the sunset of the law that permits persons admitted to the bar of any other state to represent a party in an arbitration proceeding in this state or to render legal services in this state in connection with an arbitration proceeding in another state.

AB 1875 limits a deposition of any person to one day of seven hours, subject to the court’s discretion.

AB 2160 prohibits any indirect investment, in the amount of $20,000,000 or more in companies operating in the energy sector of Iran, or to the military sector of Iran, of a domestic insurer from being treated as an admitted asset on the financial statements the domestic insurer files with the Insurance Commissioner. The bill specifies use of the list of companies developed by the Department of General Services.

AB 2274 allows courts to dismiss meritless lawsuits that were filed only for the purpose of harassment or delay. This bill also closes a loophole in which vexatious litigants could avoid closer judicial scrutiny of their meritless lawsuits.

AB 2372 requires that the requesting attorney or party appearing in propria persona, upon the written request of a deposition officer who will obtain a final judgment for payment of services, provide to the deposition officer an address that can be used to effectuate personal service for the purpose of an order of examination.

AB 2406 requires the Department of Insurance to post on its website all requests for a finding of eligibility to seek compensation and all findings of eligibility.

AB 1454 includes doctors of audiology who meet specified requirements among the medical professionals who are appointed by the administrative director as a qualified medical evaluator. The bill expands the definition of “physician” to include licensed audiologists.

AB 2219 eliminates the sunset on the provision requiring a contractor with a C-39 roofing classification to have workers’ compensation insurance and the provision that requires an insurer who issues a workers’ compensation insurance policy to a roofing contractor holding a C-39 to perform an annual payroll audit for the contractor.

AB 2301 makes technical, substantive changes to existing law establishing the State Insurance Guarantee Association to provide coverage against losses arising from the failure of an insolvent property, casualty, or workers’ compensation insurer to discharge its obligations under its insurance policies. The bill also revises the definition of covered claims to require that the claim be presented as a claim to the liquidator in the state of domicile of the insolvent insurer or to the association.

SB 1216 conforms to California law with recent changes in federal law and the National Association of Insurance Commissioners (NAIC) model law regarding the regulation of reinsurance.

SB 1448 provides a consolidated hearing before the commissioner and commissioners from other states on insurer mergers and acquisition, requiring any controlling person of a domestic insurer seeking to divest its controlling interest to file a notice of its proposed divestiture, and requires that the ultimate controlling person of every insurer to file an annual enterprise risk report. The bill implements the NAIC Model Holding Company Act.