Consumers Lose as Legislature Ignores Warnings and Puts State's Economy At Risk
10 September 1999
Dan Dunmoyer, President, Personal Insurance Federation, Says Special Interest Group Wins, Consumers Lose as Legislature Ignores Warnings and Puts State's Economy At Risk
SACRAMENTO, Calif.--Sept. 9, 1999--An historic event in California legislative chicanery took place on September 7, 1999 when the personal injury lawyers association commandeered both Houses of the Legislature. The lawyers ram-rodded AB 1309 by Assemblyman Jack Scott of Pasadena through both Houses. AB 1309 is an amended version of SB 1237 (Escutia), a bill that will raise California auto insurance rates for insured drivers, business owners and individuals with liability insurance 15%, according to Dan Dunmoyer, president of the Personal Insurance Federation of California (PIFC)."Small businesses, seniors on fixed incomes, auto owners and low-income families will take the brunt of this anti-consumer legislation that will reinstate a legal system that will allow third party lawsuits -- frivolous and/or fraudulent -- to be filed with respect to all liability insurance policies. The yearly insurance cost increase will be well over a billion dollars to California consumers," noted Dunmoyer.
"The personal injury lawyers labored during the Labor Day weekend and pieced together language for AB 1309, mocked it up, gave it to the leadership in both Houses, and then had the bill rammed through, first in the Senate Tuesday afternoon, and then through the Assembly Wednesday," Dunmoyer said.
"While these so-called amendments in AB 1309 have been characterized as an attempt to narrow the scope of third party lawsuits inherent in SB 1237, they certainly do not protect consumers from skyrocketing auto and business insurance costs," Dunmoyer said. "It's a win-lose situation. The personal injury lawyers will sue more and collect more while the consumers will only pay a lot more for insurance," he added.
"The bill did not go through totally unnoticed, however," Dunmoyer continued. "Early in the debate in the Senate it was noted that the mock up of AB 1309 had not even been handed out for review, let alone seen the light of day in any policy or fiscal committee in either House," Dunmoyer said.
"Assemblyman Joseph Dunn, D-Garden Grove, a personal injury lawyer, who's partner is the President of the Personal Injury Lawyers Association, touted how this bill will not raise rates, and that it substantially limits what was passed in SB 1237, failed to mention while AB 1309 was being debated that the personal injury lawyers had their own insurance companies (professional liability insurers) exempted from the bill. In other words, every insured person in this state is facing tremendous insurance rate hikes -- except personal injury lawyers. AB 1309 will also allow uninsured drivers and drunk drivers to benefit from this bill by filing third party lawsuits," Dunmoyer said.
"It is simply amazing that if the personal injury lawyers claim that this is a "balanced and fair" measure, why have neither the substantive changes made to SB 1237 and AB 1309 never been heard in any policy committee? The answer is simple, the truth about these measures cannot withstand close scrutiny," Dunmoyer said.
"The personal injury lawyers have crafted a very costly anti-consumer bill in AB 1309 -- and it will cost Californians dearly in the months and years ahead," Dunmoyer concluded. "PIFC and its member insurers that write approximately 50% of the 20 million insured autos in California are now weighing their options as to what steps will be taken to protect their millions of policyholders from exorbitant rate increases should the governor sign SB 1237 and AB 1309.
