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Serious and Willful Misconduct Occurs When Employer Turns Mind To Risks Posed to Employee

The unpublished case of C. C. Myers, Inc. v. Workers’ Compensation Appeals Board and Lockwood, No. C067528 (January 26), arises out of an incident in which the claimant was injured when a co-worker drove an excavator over his foot.  The WCAB concluded Myers’ failure to provide a “spotter” to help direct movement of the excavator amounted to serious and willful misconduct under Labor Code Section 4553, entitling the claimant to a 50 percent increase in his recovery.  Myers objected, asserting that determination was not supported by substantial evidence.  The Third Appellate District affirmed.  The leading case on the issue is Mercer-Fraser Co. v. Industrial Accident Commission (1953) 40 Cal. 2nd 102, 117.  In overruling the Commission’s finding in the claimant’s favor, the Supreme Court developed an “actual knowledge, or that which in the law is esteemed to be the equivalent… coupled with a conscious failure to act to the end of averting injury” standard.  The Third Appellate District also relied heavily on Rogers Materials Co. v. Industrial Accident Commission (1965) 63 Cal. 2nd 717, disapproved on other grounds in LeVesque v. WCAB (1970) 1 Cal. 3rd 627, where the employer’s superintendent repeatedly observed the employee in close proximity to a revolving chain and did nothing more than warn him to be careful.  The employer here was on notice of the dangerous working condition and also “turned his mind” to the particular risk it posed by warning employees to be “alert” and “aware.”  The Court was also influenced by the tight schedule imposed on the construction project at issue and the lateness of the day when injury occurred.

January 27, 2012   Posted in: Blog  Comments Closed

Commissioner Folds On Former Commissioner’s Iranian Investment Disallowance Regulations

Commissioner Jones today announced the settlement of litigation concerning efforts to curtail insurer investments in companies doing business in Iran.

The terms of the settlement permit the Commissioner to maintain a public list of businesses involved in volatile sectors of the Iranian economy. As their financial statements already contain this information, insurers will no longer be required to file quarterly reports regarding their Iran-related investment activities nor will such investments be disallowed for purposes of determining financial solvency of the insurers. Under the terms of the settlement, the Commissioner retains the power to independently review and publicize the names of insurers with investments in Iran-related businesses.

“The resolution of this litigation is an important step forward for our efforts to make sure that the public, insurers, and investors are aware of companies doing business in the nuclear, military and energy sectors of Iran’s economy, particularly in light of the growing nuclear threat posed by Iran,” said Commissioner Jones. “The settlement preserves the Department’s ability to collect and publish information about insurer investments in companies doing business in Iran, while addressing issues raised about alleged conflicts with federal and state law.”

In November of 2010, Commissioner Jones’ predecessor, Steve Poizner, filed a lawsuit challenging a California Office of Administrative Law (OAL) determination that declared the Commissioner’s Iran efforts constituted an “underground regulation.  The following insurance trade associations intervened in the lawsuit and challenged the Commissioner’s Iran efforts: The American Council of Life Insurers, American Insurance Association, the Association of California Insurance Companies, the Association of California Life and Health Insurance Companies and the Personal Insurance Federation of California (Insurer Trade Associations).

As a result of the settlement of this litigation, the Commissioner will withdraw the lawsuit against OAL.The Insurer Trade Associations have agreed to withdraw their legal challenge to the Commissioner’s efforts to publicize insurer investments in companies engaged with Iran.

Since the Department of Insurance began publicizing information about insurance companies investing in companies doing business in Iran, significant numbers of insurance companies have ended these investments. The Commissioner’s list of 43 businesses engaged in the Iranian nuclear, military or energy sectors of Iran is available to the public.

January 27, 2012   Posted in: Blog  Comments Closed

History Of Portable Persistency Continues To Be Misstated In The Media

Somebody by the name of Will Evans has a piece today in California Watch, an internet publication “founded by the Center for Investigative Reporting,” rehearsing the history of Mercury chairman George Joseph’s seemingly endless efforts to promote portable persistency automobile insurance discounts.  The piece — what journalists term a “clip job” —  ploughs the usual ground on that issue, Mercury’s various run-ins with the Department of Insurance, and Joseph’s transactional approach to politics, but doesn’t reflect much in the way of “investigative reporting.”  And some of what it does recount suggests that the “Center” might want to examine what its progeny deems facts:  “This year’s ballot initiative,” Evans writes, ” would allow companies to base auto insurance rates on whether a customer had previously been insured. Under tough regulations passed by ballot initiative in 1988, companies can’t charge customers more simply because they had been uninsured; they also can’t charge less if customers had been insured.”

There’s not much truth to that one.  Prop. 103, stealing language used in at least a dozen other states, banned using “absence of insurance” only “in and of itself” as a rating factor.  Until temporary, unelected Harry Low’s short and unconscious tenure as Commissioner, that was commonly understood as that specific factor  — Prop. 103, it was recognized, did not ban rewarding either persistency with an insured’s current carrier or any other carrier because such persistency is a valid rating factor closely correlated to the risk of loss.  Indeed, Mercury switched from its previous use of loyalty persistency to portable persistency at the insistence of Harvey Rosenfield favorite Commissioner, John Garamendi, who then thought loyalty persistency gave current carriers an unfair advantage over their competitors.  Further, Low’s reversal of course, allowing only loyalty persistency, does not bar insurers from rating a customer on “whether [he or she] had been previously insured.”  It only restricts that qualifier to being insured with a current carrier which both Joseph, understandably, and Garamendi, in his prior guise, view as unfairly discriminatory.

Now it is true that Joseph himself deserves a heavy share of the blame for this continuing misunderstanding.  When the portable persistency discount he was using, at Garamendi’s command, during Low’s commissionership was challenged in the courts, he hoisted up what was unsurprisingly characterized as the white flag of surrender early on and settled the case.  That has tainted all his subsequent efforts to right the ship.   And the ham-handed 2010 Proposition 17 portable persistency initiative campaign was run on a misguided  ”flaw in the law” campaign theme that all but conceded — wrongly — that portable persistency in fact violates Prop. 103 as written.  Still, one would think anything as portentously labeled as the “Center for Investigative Reporting” might muster the energy to at least look into the basic facts of how and why we are at the present juncture rather than mindlessly repeat the plaintiffs’ lawyer claptrap which fueled the last decade’s litigation against Mercury and other insurers on this issue.

January 27, 2012   Posted in: Blog  Comments Closed

Minimum Earned Premium Language In CGL Policy Upheld By Fourth Appellate District

The unpublished case of McIntyre Framing, Inc. v. Interstate Fire & Casualty Company, No. E052666 (January 26), involved the enforceability of Interstate’s return premium term in a CGL policy issued to a contractor.  The “Minimum Earned Premium and Premium Audit Endorsement” section of the policy provided for a minimum 25 percent premium in the event of cancellation, regardless of the term of the policy.  The Endorsement further provided that if, at the time of cancellation, the earned premium is greater than 25 percent of the premium shown on the declarations page, then the premium refund will be 90 percent of the pro rata return.  Interstate contended it insured McIntyre, and therefore the projects at which the insurance coverage was aimed, for 245 days of the 365-day policy and thus provided insurance for 67.11 percent of the policy term.  Consequently, McIntyre was entitled to only 90 percent of the remaining 32.88 percent of premium money.  Division Two of the Fourth Appellate District, upholding the trial court’s summary judgment in Interstate’s favor, rested on Insurance Code Section 482.  It did not matter, as McIntyre contended, that the projects originally targeted for the insurance never got off the ground and that therefore, in its view, Interstate had assumed no risk.  An insurer, the appellate court held, earns premium under Section 482 simply by being exposed to potential risk.  The evidence reflected that McIntyre was doing business during the policy period, worked on construction projects, had an office, and had an employee.  McIntyre, for example, could have been sued for slander had it spoken ill of a competitor.  The policy was not restricted to any particular construction work; it applied to general business operations risks.  The Court also rejected various subsidiary claims such as that the policy language was ambiguous and unconscionable based on the same analysis.

January 26, 2012   Posted in: Blog  Comments Closed

Aetna Cooperating With Department Investigation of Lap-Band

The Department of Insurance, reports the Los Angeles Times, is investigating the business practices of Lap-Band surgery centers affiliated with the 1-800-GET-THIN advertising campaign, according to insurer Aetna, Inc.

The insurance giant said in a statement that it was cooperating with the Department’s law enforcement branch, which has the power to make arrests and pursue criminal charges, to “investigate alleged fraud against our members by the 1-800-GET-THIN … surgery centers.”

The state probe, says the Times, joins local and federal agencies investigating the businesses behind the ads that have become a fixture of Southern California airwaves and roadside billboards. The U.S. Food & Drug Administration, Los Angeles County Board of Supervisors and Congress are examining alleged misleading advertising and risks of the weight-loss surgery.

January 26, 2012   Posted in: Blog  Comments Closed

State Assembly Passes Various Health Insurance Mandates

January 26, 2012   Posted in: Blog  Comments Closed

“Medicare For All” Legislation Shows Signs of Dying In Senate

The Los Angeles Times is reporting that state lawmakers deadlocked today over a controversial measure, SB 810 (Leno-San Francisco), that would provide universal healthcare in California.

In a vote in which some Democrats did not participate, the Times writes, the measure received only 19 of the 21 votes needed for passage in the Senate, but was put over for another possible vote next week.

Senate president Darrell Steinberg (D-Sacramento) said later Thursday that the bill will “probably not” make it out of the Legislature by a deadline next week, according to the Times.

The proposed legislation is a vehicle “to raise the visibility of the issue,” Steinberg was quoted by the Times. “I don’t think that there is any reasonable prospect that in the short term a ‘Medicare for All’  bill will be signed in the country or in California. But that doesn’t mean it’s not important.”

January 26, 2012   Posted in: Blog  Comments Closed

Marsh Sees Firmer Pricing In Commercial Lines

Today’s Insurance Journal says U.S. commercial insurance rates are expected to climb across many lines of business in 2012, continuing a trend that began in the second half of 2011, according to a report by insurance broker Marsh.

Substantial catastrophe losses and reduced investment returns prompted many U.S. insurers to seek rate increases in 2011, most notably in the property market, Marsh said in its report, “Navigating the Risk and Insurance Landscape: U.S. Insurance Market Report 2012.”

Property insurance rate increases are expected to accelerate in 2012, especially for insureds with significant catastrophe exposures or loss histories, the report says.

March said there are also signs of rates firming in the primary and excess casualty insurance market. This is especially true for lead umbrella coverage, where participating insurers have been seeking mid- to high-single-digit rate increases across a wide range of industry groups due to unprecedented losses.

January 26, 2012   Posted in: Blog  Comments Closed

Trial Court Incorrectly Denied Appraisal Motion Based On Other Pending Issues Between Insurer and Insureds

In the unpublished case of Lalezarian, et al,  v. State Farm General Insurance Company, No. B228361 (January 25), Division Seven of the Second Appellate District reversed a trial court’s decision to deny plaintiffs’ motion to compel an appraisal with respect to wind and storm damage at their Beverly Hills home.  The appellate court agreed that the statutory appraisal process invoked under the Lalezarians’ policy is restricted to the amount of damages and is not the forum in which to resolve issues of coverage or policy interpretation.  See Doan v. State Farm General Insurance Co. (2011) 195 Cal. App. 4th 1082, 1094.  Therefore, to the extent the plaintiffs’ appraisal demand invoked issues beyond those provided for under Insurance Code Section 20711, it did not fall within authority mandating such appraisals.  However, the trial court erred in simply denying the plaintiffs’ motion to compel an appraisal based on the pendency of other issues.  Instead of denying the motion outright, it should have exercised its Code of Civil Procedure Section 1282.2 discretion to order the appraisal as mandated by both the Insurance Code and State Farm’s policy and then stayed those proceeding pending resolution of the disputed coverage and scope of loss issues.  The trial court’s decision on those issues, the appellate court went on, can then “inform the appraisal when it goes forward.”  See Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau (2011) 193 Cal. App. 4th 49, 57.

January 25, 2012   Posted in: Blog  Comments Closed

KB & W Projects Low Growth Particularly For WC And Personal Insurance Lines

In its report, “Premiums in 2012: Don’t Look at Insured Exposure Growth for Much Help,” Keefe, Bruyette & Woods says, “In 2012, we expect industry premium growth to approach the mid-single-digit range due primarily to positive rate momentum. We do not expect insured-exposure growth to contribute much to the premium base as economic fundamentals remain weak.”

In particular, KBW says it remains cautions on the premium-growth prospects for insurers that write business heavily dependent on the economy, such as monoline workers’ compensation writers, or more competitive lines of business, such as personal insurance.

January 25, 2012   Posted in: Blog  Comments Closed

Commercial P & C Rates Rise 2.8 Percent

Commercial property/casualty rates increased an average of 2.8% during the fourth quarter of 2011 compared with the same period a year earlier, the Council of Insurance Agents & Brokers said in its quarterly survey released Tuesday and reported on in Business Insurance.

“It’s clear from the data that the market continued its upward momentum in the fourth quarter,” Ken A. Crerar, president and CEO of the Washington-based council, said in a statement. “Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”

January 25, 2012   Posted in: Blog  Comments Closed

Disputed Issues of Fact As To Meaning of Tender Agreement Precluded Summary Adjudication Between Insurers

In the unpublished case of National Fire Insurance Company of Hartford v. Great American Insurance Co., No. B225270 (January 24), tainted onions sold to a restaurant chain led to the injury or death of hundreds from Hepatitis A.  National Fire and Great American are the primary and excess insurers of the wholesaler which marketed the onions, Castellini Company.  National Fire foresaw that its limits would be exhausted by the indemnity claims against Castellini.  It therefore tendered its policy limits to Great American in an effort to relieve itself of its duties of defense and indemnification.  Following an exchange of e-mails in which the terms of the tender agreement were discussed, Great American responded: “Agreed.”  The core issue on appeal was the meaning of the tender agreement — whether or not it covered not just Castellini, but other parties who were named as additional insureds in National Fire’s policy.  National Fire and Great American both sought summary adjudication below of National Fire’s assertion that it should be indemnified for $3.5 million it paid in settlement to a third carrier, American Guarantee Insurance Company, which had settled third-party claims.  The trial court granted summary adjudication to American Guarantee on all but one cause of action contained in National Fire’s cross-complaint, agreeing that National Fire had settled its own potential liability and not a third party claim against an insured.  The trial court subsequently dismissed the remaining cause of action at Great American’s request.

Division Six of the the Second Appellate District reversed, holding that issues of material fact existed as to the parties’ intent in entering into the tender agreement.  At first it requested supplemental briefing on the ability of a primary insurer to shift its obligation to an excess insurer and thereby relieve itself of both a defense and indemnity obligation.  See Chubb/Pacific Indemnity Group v. Insurance Company of North America (1987) 188 Cal. App. 3rd 691; see also AICCO v. Insurance Company of North America (2001) 90 Cal. App. 4th 579.  However, it ultimately found that the case at hand did not implicate these issues at this stage in the case.  Instead, the Court rested on what it found to be the disputed meaning of several terms in the tender agreement, including the meaning of “the Chi Chi’s claims.”  Both parties submitted parol evidence on these disputes.  According to National Fire, the tender agreement and its payment to Great American exhausted its policy limits for the Chi Chi’s claims, thereby exhausting its obligations.  Great American, in turn, contended that by entering into the agreement it never intended to assume liability for anything more than claims arising against Castellini.  The Court found a resolution of this dispute depended on issues of credibility appropriate for a jury.  See Wolf v. Walt Disney Pictures and Television (2008) 162 Cal. App. 4th 1107, 1127.

January 24, 2012   Posted in: Blog  Comments Closed

Recession Has Driven Rise In California WC Indemnity Costs, Says WCRI

The recent recession may have driven an increase in workers compensation indemnity costs in California, according to the Workers Compensation Research Institute.

Indemnity costs climbed an average of 7% per year between 2007 and 2009, despite little change in the average weekly wage of injured California workers during that time, the Cambridge, Mass.-based WCRI said in a report released Monday and reported on in yesterday’s Business Insurance.  These findings appear to conflict with those of the Integrated Benefits Institute study reported on in our August 30 blog post.

January 24, 2012   Posted in: Blog  Comments Closed

S & P Projects No Good News Ahead For Workers’ Compensation Insurers

Standard & Poor’s Ratings Services, says yesterday’s PropertyCasualty360.com, warns that signs are pointing to more unprofitable years for the U.S. workers’ compensation insurance market and downgrades could be in the future if there is no improvement.

In its report released today titled “For The U.S. Property & Casualty Industry, Making Workers’ Compensation Profitable May Be Mission Impossible,” S&P says high unemployment in the United States, a sluggish economic recovery, potential for higher inflation on future claims payments, adverse reserve developments, and a volatile investment environment with historically low-investment yields could add up to many years of unprofitability for the workers’ comp industry.

January 24, 2012   Posted in: Blog  Comments Closed

Dismissal Of ERISA Claim For Lack Of Standing Is Not Dismissal For Lack Of Subject Matter Jurisdiction

In the case of Leeson v. Transamerica Disability Income Plan, No. 10-35380 (January 23), Leeson challenged the termination of his long-term disability benefits.  The district court, applying the abuse of discretion standard, upheld the Plan’s decision.  Leeson appealed.  In a prior determination, the Ninth Circuit ordered the district court to review the termination decision de novo.  On remand, Transamerica then filed a motion to dismiss, arguing, for the first time, Leeson did not have statutory standing as a plan participant to file suit under ERISA and therefore the court lacked subject matter jurisdiction.  Relying on Curtis v. Nevada Bonding Corp. (9th Cir. 1995) 53 F 3rd 1023, 1027, the district court agreed.  Leeson appealed again.  Curtis held that a district court lacked jurisdiction to consider an ERISA claim where a former employee “had neither a reasonable expectation of returning to covered employment nor a colorable claim to vested benefits.”  Leeson argued that under ERISA “a dismissal for lack of statutory standing is properly viewed as a dismissal for failure to state a claim rather than a dismissal for lack of subject matter jurisdiction.  See Vaughn v. Bay Environmental Management, Inc. (9th Cir. 2009) 567 F. 3rd 1021, 1024.  Leeson therefore contended that because he alleged a colorable claim for benefits, the district court had subject matter jurisdiction to address the merits of his case on remand.

The Ninth Circuit agreed that Vaughn controls.  Whether Leeson is a participant for purposes of ERISA is a substantive element of his claim, not a prerequisite to subject matter jurisdiction.  The Supreme Court held in Arbaugh v. Y & H Corp. (2006) 546 U.S. 500, 506 that “when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.”  To the extent Curtis held otherwise, therefore, it has no “precedential effect” because it is the type of “drive-by jurisdictional ruling[]” the Supreme Court has since rejected.  See Arbaugh at p. 511.  The Court therefore vacated the dismissal and remanded for further proceedings.  The Court also held that Leeson would not be foreclosed on remand from arguing that principles of estoppel and waiver prevent Transamerica from challenging his eligibility as a plan participant based on the Plan’s initial consideration of his claim and that Transamerica is foreclosed from raising an entirely new eligibility argument when it had not done so initially in response to his claim at the administrative stage.

January 23, 2012   Posted in: Blog  Comments Closed

Conning Sees 3-4 Percent Premium Growth In P & C Lines In 2012 And 104 Percent Combined Ratio

Property/casualty insurers are facing a difficult environment in 2012, according to a forecast from analysts at Conning Research & Consulting, today’s Insurance Journal reports.

The difficult environment will include volatility in the economy, the underwriting cycle, and catastrophe management, combined with low investment yields, said the quarterly Property/Casualty Forecast & Analysis from Conning Research & Consulting.

Conning said it sees premium growth at between three to four percent.

Clint Harris, analyst at Conning, said the expected industry combined ratio of 104 percent for 2012 should improve slightly in 2013 “as the commercial lines rate environment improves and overall inflation remains modest.”

January 23, 2012   Posted in: Blog  Comments Closed

Forbes Rates Vehicles For Passenger Safety

The Audi A6, the BMW 5 Series, the Infiniti EX 35, the Infiniti M37/M56, and the Mercedes-Benz E-Class top Forbes magazine’s list of the safest 2012 automobiles based on factors including frontal-crash and side-impact tests and safety systems warning of imminent collisions and lane departures.

January 23, 2012   Posted in: Blog  Comments Closed

Stifel Nicolaus Sees Commercial Lines Rates Going Up 10 Percent

Commercial lines rate increases for 2012 could head as high as 10 percent if a handful of negative pressures continue to affect insurers’ earnings, a financial analyst suggests.

Meyer Shields, an analyst with Stifel Nicolaus, says the combination of global natural and man-made catastrophe losses along with loss-cost inflation from 2011 catastrophes, insurers’ merger and acquisition activity, RMS Version 11 catastrophe model revision, and worsening core underwriting results is “setting the stage for significant mid-2012 rate increases” of around 10 percent on commercial lines business.

January 23, 2012   Posted in: Blog  Comments Closed

Sacramento Bee Reflects On George Joseph-Harvey Rosenfield Rivalry

Sacramento Bee political writer Dan Morain has today an interesting piece reflecting on the decades-old rivalry between Mercury Insurance’s George Joseph and Proposition 103 sponsor Harvey Rosenfield.  Some key excerpts:   “From the courts to the Capitol to the ballot, insurance magnate George Joseph and attorney Harvey Rosenfield, who wrote the 1988 initiative that regulated auto insurance have been butting heads for a quarter century.

“They assure me it’s not personal.

“‘We’re superheroes for consumers,’ Rosenfield said, aware that the line might be a little vainglorious. He stopped short of calling himself Capitain America. But he does view himself as ‘fighting greed and lawbreaking,’ especially by Mercury.

“‘There isn’t an insurance CEO who hasn’t considered me their enemy,’  Rosenfield said. ‘George Joseph is just one of these guys.’

“Joseph dismissed the notion that he is pursing the initiative because of greed. Rather, he noted, he had to lay off 450 people in 2008 and 2009, and is looking to expand Mercury’s market share.

“‘I’m 90 years old,’ the billionaire told me. ‘I wear the same suits I wore 20 years ago. I give away tens of million of dollars each year. But when I had to lay 450 people off, that did bother me. I want this company to grow.’

“Mercury and Joseph, meanwhile, have become a major Sacramento lobby presence and lavish donor, doling out $32.2 million to California campaigns since 2000.

“Like many high-end donors, Mercury is promiscuous, giving to politicians of both parties, occasionally timed to key actions and votes.

“In August 2003, for example, Gov. Gray Davis signed legislation giving Mercury its way with portable persistency. A month later, Mercury contributed $200,000 to the failed effort to beat back the Davis recall.

“Evidently, Joseph did not mourn Davis’ departure for long. Within three months, Mercury had given $160,000 to Davis’ replacement, Arnold Schwarzenegger.

“The issue of portable persistency might have ended with Davis’ signature. But Consumer Watchdog sued and convinced a judge that the legislation violated Proposition 103.

“There are differences between the two versions. But the main one is the campaign team. The yes-campaign will be the first statewide effort managed by the campaign arm of Aaron Read & Associates.

“Among the top lobby shops in town, Aaron Read represents several unions, including law enforcement unions whose endorsements are coveted in any campaign. Terry McHale, the Read partner who will be overseeing the campaign, said the new and improved version could appeal to some of those influential clients.

“Whether Consumer Watchdog’s counter-initiative qualifies or not, Rosenfield and the other guys at Consumer Watchdog have shown an ability to win campaigns without large sums of money.

“They led the successful campaign against Proposition 17 [the current portable initiative's predecessor] on a relative pittance, $1.3 million. My guess is that Rosenfield will win again.

“Voters generally don’t like being asked the same question twice. And the electorate is always skeptical when a single donor provides the bulk of the money for an initiative.

“Moneyed interests and ideologues long ago learned that they could rent space on California ballots as they attempt to buy laws. In this instance, it seems, old rivals are taking that a step further, invoking direct democracy to settle scores, not that it’s personal.”

January 22, 2012   Posted in: Blog  Comments Closed

Pollution Statute Of Limitations Extension Fails In Assembly Judiciary Committee

AB 1207 (Furutani-Los Angeles) failed passage in the Assembly Judiciary Committee. It would have expanded the statute of limitations for lawsuits against property owners, developers, contractors, architects, engineers and other service providers alleging that property was exposed to a pollutant or hazardous substance.

January 20, 2012   Posted in: Blog  Comments Closed

Insurance Journal Reviews Commissioner’s First Year In Office

Today’s Insurance Journal carries an evaluation of Commissioner Jones’ first year in office.  The reviews on Jones from the industry are mixed, says the Journal, and many insurance associations and executives shy away from discussing the state’s top insurance decision maker in a candid light. Some in the industry, the Journal goes on, say Jones has been highly focused on healthcare reform, but that he has done little in areas like property/casualty so far. There are some expectations, the Journal reports, that Jones this year will expand his interest beyond healthcare—for better or worse.

“The first year has been focused almost exclusively health insurance,” the Journal quotes Association of California Insurance Companies President Mark Sektnan. However, Sektnan also said ACIC has worked well with Jones, and says the Commissioner and his staff have communicated effectively and openly with him and his staff.

Others, according to the Journal article, have complained of a lack of communication and openness from Jones and his staff, and there have been complaints that Jones caters too much to consumer advocates, such as Santa Monica, Calif.-based Consumer Watchdog, which is working to qualify a bill for the 2012 California ballot that would bring prior approval to health care. “I would assume Consumer Watchdog has a pretty strong relationship with him,” Sektnan said to the Journal adding that “we also have a pretty good relationship with him.”

Steve Young, general counsel with IBA West, said the position of Commissioner, because it’s an elected one, is one that often tends to indulge to consumer groups like Consumer Watchdog. “I think a lot of commissioners have viewed them as someone to sort of cater too,” the Journal quotes Young. “I haven’t seen any evidence to see that (Jones caters to them) any more or any less than any other commissioner. In fact, Young added, “I think Jones has been a pretty formidable commissioner so far, and I think he has the potential to be an effective commissioner for a bunch of reasons.”

January 20, 2012   Posted in: Blog  Comments Closed

Leno Health Care Legislation Clears Senate Appropriations Committee

The Los Angeles Times reports that a bill providing for universal healthcare system in California was approved in committee today and sent to the Senate floor.  However, the Times says, even some Democratic supporters have voiced skepticism that such a system will be available anytime soon.

The Senate Appropriations Committee passed the California Universal Health Care Act by a 6-2 vote. Sen. Mark Leno (San Francisco) said his SB 810 is necessary to provide Californians access to affordable medical care.

January 19, 2012   Posted in: Blog  Comments Closed

Auto-Home Multi-Policy Discounts Declining Force In Purchase Decisions

Home and auto insurance buyers were less interested in home-auto package discounts in 2011 than the year prior, and more aware of competitive premium rates, a new study says, according to an article in yesterday’s IFAwebnews.com.

In 2011, 48% of surveyed homeowners said they took advantage of a home-auto package discount, compared to 54% the year prior, according to the HomeInsurance.com survey.

January 19, 2012   Posted in: Blog  Comments Closed

Policy-Shopping On The Rise

The rate at which U.S. insurance customers go policy-shopping has risen steadily since 2008 and currently stands at 35 percent,  says Aite Group in a study reported on in yesterday’s Insurance Networking News.

But how respondents’ shop for auto insurance varies. Thirty-five percent said they seek quotes at least annually, including 7 percent who do so even more frequently. Another 39 percent of respondents have not sought quotes in the past five years (although this group also includes some who have come of driving age more recently than that), while 25 percent seek quotes every two to five years.

Of respondents who sought quotes over the past five years, Insurance Networking News says 51 percent purchased auto insurance from the quoting carrier. This result clearly illustrates the incentive for carriers to entice greater numbers of consumers to seek quotes, notes the report, and helps explain extensive carrier advertising campaigns aimed at doing just that. Aite Group says that improving conversion rates could be a matter of expediting the entire quote process via use of data-process technologies such as information pre-fill.

However, the increasing rate (35 percent) of consumers shopping annually for auto insurance, combined with the relatively strong (51 percent) quote conversion rate, implies a problematic 18 percent annual “switching” rate between insurance carriers, the report also advises.

January 19, 2012   Posted in: Blog  Comments Closed

Portable Persistency Discount Qualifies For November Ballot

The Sacramento Bee reports that Mercury General chairman George Joseph will get a second chance at asking voters to allow insurers to use a motorist’s coverage history with other companies when setting rates.

Secretary of State Debra Bowen announced today, writes the Bee, that the proposed auto insurance pricing initiative has qualified for the November 2012 ballot. Proponents had submitted more than 800,000 voter signatures to election officials late last year.

The measure, backed by the American Agents Alliance but personally financed almost entirely by Joseph, is similar to Proposition 17, the failed June 2010 measure bankrolled by Mercury itself. Supporters, who say the change would allow companies to extend existing loyalty discounts to new customers who want to switch carriers, have modified this version to mollify concerns about rates for members of the military and the unemployed.

Critics, chiefly Harvey Rosenfield’s Consumer Watchdog, say the change would result in increased rates for motorists who experience a lapse in coverage.

January 18, 2012   Posted in: Blog  Comments Closed

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