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SENATE BILL 1293 (ZENOVICH – 1973)
CHAPTER 1130, STATUTES OF 1973 SB 1293
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Numerous provisions of the Insurance Code relating to title insurance were affected in 1973 following the legislative passage of Senate Bill 1293. (See Exhibit #1e) The bill was introduced by Senator George Zenovich on May 3, 1973 at the request of the California Land Title Association. (See Exhibits #1a and #3, page 3)
Senate Bill 1293 was heard in the Senate by the Committee on Insurance and Financial Institutions and the Committee on Finance. (See Exhibits #2 and #3) In the Assembly, the bill was considered by the Committee on Finance and Insurance and the Committee on Ways and Means. (See Exhibits #2 and #7) Following three amendments, one in the Senate and two in the Assembly, Senate Bill 1293 was approved by the Legislature. (See Exhibits #1b through #1d and #2) Governor Ronald Reagan approved the bill on October 2, 1973, and it was recorded by the Secretary of State on that date as Chapter 1130, Statutes of 1973. (See Exhibits #1e and #2)
The Enrolled Bill Memorandum to the Governor prepared by the Legislative Secretary described the measure as follows: “SB 1293 revises provisions for licensing and regulation of underwritten title companies by the Insurance Commissioner.” (See Exhibit #9, document PE-2)
In his letter to the Governor urging approval of the bill, Senator Zenovich explained that he introduced Senate Bill 1293 at the request of the California Land Title Association and that the bill “substantially increases the regulatory power of the Department of Insurance over the business of Title Insurance in this state.” (See Exhibit #9, document PE-16) Senator Zenovich then summarized the bill as follows:
Under existing law the provisions of the Insurance Code governing Title Insurance do not grant specific statutory authority to the Insurance Commissioner to regulate rates of Title Insurers, Underwritten Title Companies or Controlled Escrow Companies. Regulatory power in this area is derived from the provisions of the Insurance Code governing insurers generally.
Senate Bill 1293 establishes a McBride-Grunsky (Sections 1850-1860.3, Insurance Code) pattern of rate regulation for the business of Title Insurance. The Commissioner is thereby granted specific statutory authority to order termination of rates which are found to be excessive, inadequate or unfairly discriminatory. The bill incorporates without substantive change the provisions of Senate Bill 293 (Senator Bradley), a Department of Insurance sponsored measure, designed to increase the financial prerequisites
for doing business as an underwritten title company and also increasing the annual license fee for such companies from fifty ($50) to one hundred ($100) dollars.
(See Exhibit #9, document PE-16)
A document in the author’s legislative bill file entitled “Explanation of Senate Bill 1293,” dated September 16, 1973, noted that this legislation was the “end product of the first of a two-phase effort by the title insurance industry to completely revise and update existing regulatory laws governing the conduct of its business in California.” (See Exhibit #8, document A‑13) This same document also provided the following comment regarding the bill’s objectives:
The principal objectives of the industry's phase one effort were to establish a system of rate regulation far more vigorous than existing law for the primary purpose of providing the public via the office of the Insurance Commissioner with industry‑wide financial experience data in such a form that both the Insurance Commissioner and the public would be able to make reasoned judgments concerning the charges currently made to the public for title insurance and other related services. Phase one was further directed to the establishment of a consistent pattern of rate regulation involving the entire title insurance industry; i.e., title insurers, under‑written title companies, and controlled escrow companies. Phase one also included an industry effort to respond to the Insurance Commissioner's expressed desire to upgrade the financial prerequisites to licensing of an underwritten title company.
(See Exhibit #8, document A-13)