COVID-19 and CA Department of Insurance – Public Notices

Essential Service Guidance

The United States Department of Homeland Security released guidance on essential critical infrastructure workers March 19th.  Insurance services are listed as essential within the section on financial services.  For more information, the guide is available here: https://www.cisa.gov/identifying-critical-infrastructure-during-covid-19.  California Insurance Commissioner Ricardo Lara issued further guidance on March 20th, that insurance services are included as essential services.  We know many of you are taking important precautions like working remotely, or closing your insurance offices to the public, while still continuing to provide great service to your clients, Commissioner Lara’s bulletin is available here: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/CDI-Essential-Services-Notice-Final.pdf.

Commissioner Lara did reiterate the importance of timely processing of payments as people shelter
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March 3rd Primary Results

Politically speaking, PIFC saw a strong showing in the March primary. This primary was unprecedented; the Legislature moved the primary to March 2020, in order to position California to impact the presidential election. That meant early candidate interviews and early funding decisions. Effective campaign activism aids in helping reasonable people get elected. If we leave elections to others, they will control election outcomes, and it is important we do not allow that to happen.

PIFPAC Board Members, staff, and member company representatives conducted several all-day candidate interview sessions in November 2019.  PIFC staff is extraordinarily grateful for the support of, and engagement in, this process by the member companies and PIFPAC
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On the Defense

The legislative bill introduction deadline was February 21, 2020, which means we now have an initial understanding of the “bad bills” related to wildfires and homeowners insurance the industry will face this year. However, there are also many placeholder bills (i.e., spot bills) that do not yet have substantive language, which may be amended in a manner that negatively affects the insurance industry. PIFC staff will monitor these spot bills to see what emerges.

In particular, PIFC has opposed AB 2367, authored by Assemblymember Lorena Gonzalez. Last year, she authored AB 5, which fundamentally changed the way independent contractors operate in California, but our advocates were able to communicate the
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Towing and the Gig Economy

PIFC staff is working on a bill that regulates towers and helps weed out bad actors by creating a licensing requirement.  We are also working with tech companies to make sure that bills impacting the mobility economy, like food-delivery apps, include a perspective from auto insurers.

Last, but certainly not least on the offensive side, PIFC staff continues to submit comments to the California Department of Justice as they create rules surrounding the California Consumer Privacy Act (CCPA) of 2018. Read our latest comments here.

Taking the Heat – Wildfires and Homeowner’s Insurance

On February 12th, Rex and our Senior Legislative Advocate Seren Taylor testified at an informational hearing for the Senate Insurance Committee, titled Wildfires and Homeowners Insurance: Availability in High Risk Communities. Testifying alongside Rex and Seren were representatives from the California Department of Insurance (CDI). While representatives from CDI tried to focus on the Insurance Commissioner’s town halls and people’s emotions regarding non-renewals, they did not have strong arguments, data, or any concrete solutions to offer.  Committee members seemed unimpressed with CDI and asked them a lot of questions focused on the lack of any meaningful statewide mitigation standards or data to support their effectiveness in reducing property damage
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2020 Election Cycle

Elections matter, which is why PIFC takes the 2020 election cycle, and all elections so seriously.  After all, it was the 1988 election with Proposition 103 that led to the organization of the insurance industry around a political cause, and the eventual founding of PIFC.  The building blocks of political success are relationships with those who are successfully elected.  The open seats PIFC is focused on allow opportunity to get to know the candidates, one of whom will be elected to the State Assembly or State Senate.  This is an opportunity for PIFC to get in at the ground level to establish a lasting relationship with the victorious candidate.  This
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Changing Seats

State legislative seats often end up changing more frequently than current 12 year term limits.  An open State Senate or Assembly seat generally results in trickle down changes through the political ranks in the region where the open seat is.  For example, insurance broker and PIFC supported, Ted Gaines served as California State Senator to District 1, until Mr. Gaines was elected to the State Board of Equalization.  Constituents in Senate District 1 elected Brian Dahle to the Senate Seat, vacating the Assembly District Seat he was serving in.  Assembly District 1 is a solidly Republican seat, one of the most conservative in California encompassing vast stretches of Northern California
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2020 Pro-Active Efforts

For 2020, there are several issues PIFC will be pro-actively involved in:

California Consumer Privacy Act (CCPA)
Climate Change
Mobility Economy

The issue of privacy regulation is still unresolved. Industry-supported legislation to harmonize the California Consumer Privacy Act (CCPA) with existing federal and state insurance privacy rules stalled in 2019. Before commencing another legislative effort in 2020, industry will have an opportunity to participate in the Attorney General’s (AG) CCPA rulemaking that should commence in fall, 2019. At the PIFC Planning Retreat, representatives of both the California Department of Insurance (CDI) and the AG’s offices will be present to discuss next steps. PIFC will actively engage with the AG and CDI on regulation development
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2020 Political Goals

On the political front, PIFC is preparing for the 2020 election cycle. It comes early next year; the Legislature moved the primary to March, 2020 in order to position California to impact the presidential election. This means early candidate interviews and early funding decisions. Effective campaign activism aids in helping reasonable people get elected. If we leave elections to others, they will control election outcomes, and it is important we do not allow that to happen.

PIFPAC Board Members, staff, and member company representatives conducted several all-day candidate interview sessions in November.  PIFC staff is extraordinarily grateful for the support of, and engagement in, this process by the member companies and
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2019 Recap

Overall, this was a strong year for defensive efforts. In 2018, the insurance industry withstood over a dozen “wildfire” bill proposals focused on homeowners insurance. As expected in 2019, many legislators wished to continue skirmishing. After putting down early scares in the Assembly and Senate, the 2019 legislative session ended with some acceptable, incremental reform.

Fortunately, none of the far-reaching proposals from the Governor’s Strike Team report, the SB 901 Commission report or the Insurance Commissioner’s last-minute “wish list” of insurance reforms were enacted into law. However, with the growing number of non-renewals and the scarcity of carriers accepting new business in high-fire risk communities, we should expect challenges in 2020.
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