Reason to Complain

Under current law, the California insurance commissioner is authorized to hold public hearings on rate complaints, but only one hearing has been held since 1948, according to a critical report from the Little Hoover Commission. Automobile owners who live in “undesirable” zip-code areas and pay steep insurance bills have ample reason to complain. Their complaints deserve a hearing.

Assembly Bill 1687, sponsored by Assemblywoman Gwen Moore (D-Los Angeles), would require the commissioner to conduct timely public hearings in response to reasonable complaints. This is the least that the Legislature can do.

The measure, which is expected to be debated in the state Senate today, also would stiffen penalties. The commissioner now can levy fines of $50 to $30,000, but no fine has ever been levied for excessive rates, the Little Hoover Commission said. The legislation would authorize fines of $1,000 to $250,000. Larger fines, if imposed, would provide a more realistic deterrent to overcharges and other violations.

Other insurance-reform legislation has run into strong opposition in the Legislature, but AB 1687 has the backing of the Assn. of California Insurance Companies and the California Trial Lawyers Assn. The Department of Insurance has opposed it, however, telling Moore’s office that “the present system has worked very well for the last 40 years.” The system has worked very well for the last 40 years for whom?

Auto insurance, though barely available and not very affordable in some areas, is mandatory in California. AB 1687 would establish a mandatory complaint process with teeth to enforce it. The governor and the Legislature should approve the measure and end years of no public hearings and no fines. California’s motorists deserve no less.