A hastily drafted bill that would have prohibited the withdrawal of insurance coverage to victims of fire disasters this summer was defeated early Saturday after intense insurance industry lobbying and a last-minute administrative action admittedly designed to upstage it.
The bill by Assemblywoman Gwen Moore (D-Los Angeles) was approved Friday night by the Senate on a 27 to 4 vote, but fell far short of the 54 votes required for approval in the Assembly.
After the bill’s defeat early Saturday, Assembly Speaker Willie Brown (D-San Francisco) angrily vowed legislative retaliation against the insurance industry next year.
Shortly after the bill suddenly emerged in Sacramento last week, state Insurance Commissioner Bruce Bunner guaranteed coverage to fire-ravaged neighborhoods of Los Angeles County by declaring Baldwin Hills, View Park, Windsor Park and Ladera Heights high-risk areas where all 650 property and casualty companies must share risks and profits under a pool arrangement.
But Moore said Bunner’s administrative action--the first boundary change in 10 years under the pool plan that was begun after the 1965 Watts riot--would not help victims of brush fires in San Diego, Ventura, San Luis Obispo, Santa Clara, Santa Cruz and Monterey counties, where Gov. George Deukmejian had also declared disasters.
Actually, the City of San Diego--including the Normal Heights area, where 64 homes were destroyed in a tragic brush fire on June 30--was already covered under the high-risk pool arrangement known as the California FAIR Plan. But heavy brush areas outside the San Diego city limits are not.
However, neither backers nor opponents of the bill were certain of the situation in San Diego County during legislative debate Friday night.
After the worst brush-fire season in the state’s history, Assistant Insurance Commissioner Richard Roth said insurance companies canceled and refused to renew numerous policies. Roth said most were in the Baldwin Hills area, where three people were killed and 48 homes were destroyed in the July 2 inferno.
But Roth said the state Department of Insurance opposed Moore’s bill because the department can order coverage to be extended to any area with a simple administrative declaration.
He said that the addition of the new high-risk areas was decided after department officials learned that Moore had begun pushing her newly devised bill.
Moore’s bill said that insurance companies can not pull out “solely because a disaster is declared.”
“It is an extremely limited bill,” said Moore, who represents the Baldwin Hills area.
“When the insurance companies finish studying this later tonight,” said Sen. Alan Robbins (D-Van Nuys) during the earlier Senate debate, “they will realize that this bill is not a problem.”
But Clay Jackson of the Assn. of California Insurance Companies said, “I don’t know what this is all about and, quite frankly, neither does . . . anyone else.
“It occurs to me that is why you hold hearings on these things. People can come up and testify, and then you don’t have all this confusion,” Jackson added.
Jackson and other insurance industry lobbyists cornered legislators wherever they could to seek “no” votes and suggested various tactics that could be employed to scuttle the bill.
Moore’s bill, which was co-sponsored by Assemblywoman Lucy Killea (D-San Diego) and Assemblyman Larry Stirling (R-San Diego), was never scrutinized in a legislative committee hearing.
When three senators and three Assembly members met in a conference committee Wednesday to iron out differences on a bill regarding Public Utilities Commission administrative hearings on the trucking industry, all the provisions of that bill were stricken and replaced with the bill about insurance coverage.
“I wasn’t trying to sneak it through,” Moore said. “It is just that there was a serious problem in my district and I needed a vehicle.”
Stirling said problems providing coverage to disaster areas are symptomatic of an “across-the-board insurance crisis” and a “collective deep-pockets mentality.”