The Personal Insurance Federation of California (PIFC) opposes SB 850 by Senator Deborah Ortiz, a bill, notes PIFC, that will pile on more regulation to an already overly regulated insurance system in the state. Dan Dunmoyer, president of PIFC, stated that SB 850 could cause California to experience the same market restrictions as those in New Jersey.
“Years of prior approval on insurance rates and restrictions on each insurance policy form, raised New Jersey insurance rates to the highest in the nation and forced auto insurers out of the New Jersey marketplace. The New Jersey Legislature has finally recognized how over regulation has hurt consumers with restricted markets and high costs, and is considering reform legislation this year to correct the situation. A review of insurance markets nationwide show that many other states are moving to a more competitive system that allows for more insurers in the marketplace, greater availability of insurance and lower rates. Consumers do not need a New Jersey marketplace in California,” Dunmoyer stated.
Dunmoyer outlined key objections to SB 850:
·SB 850 would destroy competition in the insurance marketplace in California by placing too much authority into the hands of the insurance commissioner. Restricted markets always drive up costs to consumers.
·SB 850 authorizes the insurance commissioner to disapprove policy forms, changes and exclusions, or rescind a previously granted approval.
·The bill gives an overly broad grant of discretion to the regulator to determine policy provisions, uses undefined terms that are vague and ambiguous, and does not clearly articulate the scope of authority granted to the commissioner.
“Because of the vital role that insurance plays in California’s struggling economy, PIFC will continue to oppose legislation that is draconian and will hurt insurance consumers,” Dunmoyer concluded.
SB 850 passed May 9 in the Senate Insurance Committee.