SAN FRANCISCO (KGO) — The deadline for Gov. Gavin Newsom to sign a record number of bills before the end of the session has passed. 7 On Your Side delves into why a number of bills aimed at holding insurance companies accountable failed and why their funding was delayed to the vote.
7 On Your Side Investigates tracked dozens of insurance bills debated or voted on this Congress. Our analysis found a clear conflict between the bills that passed and the bills that failed: money and insurance company interests.
California insurance crisis
It has reached a breaking point, forcing a record number of consumers to enroll in the state’s last insurer, the California Fair Plan.
It’s called that for a reason.
A closer look at the law shows that the state’s plan promises to “ensure stability…availability…and fair distribution.”
“We pay more than half of our mortgage with insurance,” said Gigi Bannister, a retired firefighter who was also rejected by Farmers.
“My premiums went up 1,000 percent,” said Bruce Breslow, a California consumer who had his Farmers Insurance policy withdrawn. “The insurance company we worked for for 20 years made us quit!”
The president of advocacy group Consumer Watchdog says the situation is only going to get worse.
Read more: California Insurance Commissioner reveals plan to address insurance crisis, activists find ‘many loopholes’
“They’re not coming back! State Farm said they don’t need to insure another policyholder,” Consumer Watchdog President Jamie Cote said.
Instead, consumers face California Fair Plan wraparound policies that offer high rates and limited coverage.
At least seven of the state’s insurance companies, which account for 85% of the market, have either withdrawn from California or restricted their ability to issue new policies. According to the state, 1,000 consumers are forced to participate in the California Fair Plan every day.
Insurance policies from emergency medical providers in the state increased by 22% last year alone and more than doubled since the service began in 2019.
“There’s nothing stopping insurance companies from raising rates,” Cote said.
It’s no secret that the problem is getting worse. The question is, what are the people we elect doing about it?
Insurance claim tracking
7 On Your Side’s research tracked at least 32 insurance bills debated in the Insurance Committees of this Congress and Senate.
For example, of the several bills passed, all had support from insurance companies or benefited the California Department of Insurance through procedural or technical changes to insurance companies.
One of the only pieces of legislation to address the insurance crisis that was passed was SB 505, authored by Sen. Susan Rubio (D-San Gabriel Valley), which would reduce the California Fair Plan through a “clearing house program.” The aim is to reduce the number of insurance policies.
“We’re going to be sending more insurance back into the licensed market,” Sen. Rubio said.
“This is not a threat to the insurance industry, which is why it was passed,” said Carmen Barber, executive director of Consumer Watchdog.
Meanwhile, five other bills aimed at lowering insurance costs and increasing transparency for consumers all failed. Most were met with opposition from the insurance industry.
More: ‘$4 million is a lot’: Questions arise after California bill requiring insurance companies to consider housing hardening failures
“We respectfully disagree,” said Laura Curtis, president of the Property Casualty Insurance Association of America. “It just puts an additional burden on insurance companies.”
SB 1229 would have required insurance companies to disclose to applicants whether AI is being used to make decisions about applications and claims. Failed.
“Furthermore, insurers are particularly concerned about the potential scope of disclosure and the additional strain on their business models,” said Alison Adley, president of the Personal Insurance Federation of California.
“So complaints from the insurance industry that consumer protection is too burdensome are just code for ‘we don’t want to provide that information,'” Barber said.
State Sen. Bill Dodd (D-Napa), who authored another AI bill passed this session, said, “We need to understand what companies are doing with our information and how they make decisions.” “We should expect them to let us know what’s going on.”
Sen. Anna Caballero (D-Merced), who represents parts of the Central Valley, voted against the bill.
Stephanie Sierra: “Why did you vote against this bill?”
Sen. Anna Caballero: “My area is rural and agricultural, and people have low salaries. And one of the biggest concerns they have is not being able to buy a home because they need insurance. And I’m very careful because anything that’s going to happen could cause disruption to the insurance industry right now.”
Sierra: “Consumer advocates say the purpose of this bill is to increase transparency for consumers. Do you agree that that was the goal?”
Senator Caballero: “Well, you’re asking me to remind you of what happened in the hearing a few months ago… It’s good to have transparency, but transparency Even if there is transparency, it won’t do you any good.” There are no insurance companies left to insure you. ”
Sierra: “What do you say to critics who say some of these decisions are too generous to insurance company profits?”
Senator Caballero: “Well, I think it’s like I said. I think it’s a balancing act.”
A 7 On Your Side investigation revealed that Sen. Caballero has received more than $1 million from the financial, insurance and real estate industries since he was elected to the state House in 2006. This is the highest salary among her colleagues on the Senate Insurance Committee, according to the newspaper. An analysis of data compiled by the nonprofit watchdog group Follow the Money.
Sierra: “Have you ever felt the influence of the insurance industry?”
Senator Caballero: “I vote for what is in the best interest of the people in my district. And I have always represented the agricultural, rural worker community. And I believe that is a good thing. I’m very proud of the fact that there are issues that they are concerned about.
7 On Your Side reported that Senate Caballero was the only senator absent from the vote on AB 970, a bill aimed at creating a series of pilot projects to reduce coverage gaps in areas at high risk of fire and flooding. I discovered that he was a member of Congress.
“California’s most vulnerable communities are suffering disproportionately from the impacts of climate change, and this bill aims to correct this by closing the insurance protection gap,” said bill author Ruth. said Rep. Rivas (D-San Fernando Valley).
AB 970 passed both the House and Senate with overwhelming support, but was vetoed by Governor Gavin Newsom. He cited budget constraints.
According to a statement in his veto message, Newsom said: “While I support the authors’ goal of expanding insurance options in communities currently underinsured for climate risks, this bill would create significant state reimbursement obligations and millions of dollars in “This would create new cost pressures of scale and should be considered in the annual budget process.” ”
North Bay Sen. Bill Dodd was a co-author of AB 970.
More information: Allstate homeowners insurance rates increase by 34% on average, California’s largest increase in three years
“Certainly, the governor has consistently vetoed bills that have some kind of cost to our state, to our state budget,” said Sen. Dodd (D-Napa). “That being said, I hope he can be creative enough to budget this in next year’s budget. We have almost $3 billion in our fire protection budget.”
Records show the governor has received at least $10,101,048 from the financial, insurance and real estate industries since taking office in 2003, according to Follow the Money. This represents 62% of the total amount he received during his tenure.
Meanwhile, two other bills that would require insurance companies to factor in mitigation efforts passed their respective committees. SB 1060 also passed on a floor vote, 28-8.
State Sen. Josh Becker (D-Menlo Park) withdrew it, citing “a lack of votes.”
According to Follow the Money, Mr. Becker received $417,697 from the finance, insurance and real estate industries. Senator Caballero was also absent from the vote.
“Frankly, by the time it got to Congress, Mr. Becker’s bill was significantly watered down in response to industry complaints,” said Consumer Watchdog’s Carmen Barber.
follow the money
The seven members of the Senate Insurance Committee received a total of at least $3,509,320 while in office, according to a 7 On Your Side analysis of a report filed by Follow the Money.
Four of them, including North Bay Sen. Bill Dodd, received more than $500,000.
Sen. Caballero received the most, at least $1,021,317.
“The insurance companies may want to push us one way or another, but we have to do what we think is best for the market as a whole,” Sen. Dodd told ABC7’s Stephanie Sierra. “I don’t think money has anything to do with my vote.”
More: 17,000 Liberty Mutual customers in California lose fire insurance policies: Here’s what you need to know
Meanwhile, the 15 members who make up the Assembly Insurance Committee received a total of at least $6,058,653. Six of them received more than $500,000.
Rep. Blanca Rubio (D-Baldwin Park) received the most, at least $1,011,333.
“Will the influence of large campaign contributions from industry cause voters to question? Absolutely,” Barber said. “Because it’s hard to believe that large sums of money in campaign funds won’t act in favor of industry. And the public has a right to ask those questions.”
Another bill (AB1844) aimed at increasing transparency by adding more members to the California Fair Plan steering committee failed to pass this session and is stuck in committee.
Check out more stories and videos from 7 On Your Side.
The 7OYS Consumer Hotline is a free consumer mediation service serving people in the San Francisco Bay Area. We assist individuals with consumer-related issues. We cannot assist with cases involving corporate litigation, family law, criminal matters, landlord-tenant disputes, labor issues, or medical issues. Check out our frequently asked questions here. As part of our process of assisting you, you will need to contact the company/agency you are writing for. If you do not want us to contact you, please contact us immediately as this will affect our ability to respond. Due to the high volume of emails we receive, please allow 3-5 business days for a response.
Copyright © 2024 KGO-TV. All rights reserved.