Store Research

Senate Bill 658 (Escutia 2001)

Chapter 583, Statutes of 2001 - SB 658

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As enacted in 2001, Senate Bill 658 amended sections 790.034 and 2071 of, and added sections 790.031, 2071.1, and 10082.3 to the Insurance Code.  (See Exhibit #1j)  Senator Martha Escutia introduced the bill on February 23, 2001 at the request of the Foundation for Taxpayers and Consumer Rights.  (See Exhibits #1a and #5, page 1)  Those supporting Senate Bill 658 included the United Policyholders, Consumer Union, the Consumer Attorneys of California and Voters for Insurance Reform, among others.  (See Exhibit #13, page 5)  The Association of California Insurance Companies, the National Association of Independent Insurers and the Alliance of American Insurers opposed the legislation.  (Id., page 6)
The measure was heard in the Senate Committee on Insurance, the Senate Committee on Judiciary, and the Assembly Committee on Insurance where policy issues raised regarding the bill were considered.  (See Exhibits #2, #3, and #7)  The Assembly Committee on Appropriations examined the bill’s fiscal implications.  (See Exhibit #9)  Senate Bill 658 was amended on eight occasions, three times in the Senate and five times in the Assembly, before being approved by both Houses of the Legislature.  (See Exhibits #1b through #1i and #2)  Governor Gray Davis signed the bill on October 5th and the Secretary of State recorded it on October 7th as Chapter 583 of the Statutes of 2001.  (See Exhibits #1j and #2)

A digest of Senate Bill 658 was provided in the Unfinished Business analysis of the bill as last amended prepared by the Office of Senate Floor Analyses as follows:

. . . This bill requires an insurer to provide certain insureds with information relating to unfair methods of competition and deceptive acts or practices in the business of insurance in its initial response to a claim.  The bill modifies the standard form of fire insurance policy for this state relative to the obligations of the insured and insurer and to appraisals, adjusters, and loss requirements for a policy originated or renewed on and after January 1, 2002. The bill also requires that all conditions applicable to loss requirements, appraisals, and adjusters contained in standard form fire insurance policies apply to residential property insurance policies, policies providing coverage for loss or damage caused by earthquake, and basic residential earthquake insurance policies that are originated or renewed on and after January 1, 2002. Assembly Amendments provide for a Department of Insurance study and deletes from the Senate version provisions concerning subrogation which were controversial and makes clarifying changes to the Senate version.(See Exhibit #13, pages 1 and 2)