Insurance for Day Care

Kenneth Reich’s article “Severe Lack of Home Day-Care Insurance Told” (Part I, Nov. 10) shows the insurance industry’s lack of willingness to look at the real problem facing home child-care providers seeking to purchase liability insurance: availability.

The lack of liability insurance for home day-care providers has forced many providers to close their doors. Closure of home day-care centers compounds the already severe child-care space shortage facing California. Our state has 1.4 million children in need of some day care, yet there are only 617,000 slots available.

Those parents that place their children with uninsured home-care providers sign waivers which remove the provider from any liability. If their child is hurt while under the provider’s supervision, then the parent assumes full personal and medical responsibility. For a working parent without any health coverage, these costs could be devastating.

Ever since the McMartin Preschool sexual abuse scandal hit the papers, the insurance industry--with prodding from the California Legislature--organized a Market Assistance Plan. Twenty-one insurance providers volunteered to offer liability coverage to those who applied. The problem with MAP, however, is that the underwriting rules written by the insurance companies were so stringent that 66% of the 3,300 applicants were denied.

Upon reviewing MAP’s progress last April, William Metzgar, director of Aetna’s Commercial Insurance Division, concluded that MAP was a failure.

In fact, Metzgar stated in a letter to the California Insurance Department that “some companies were clearly busy quoting, but either the price or the conditions of the quote was to scare the customer away. One has to wonder if that wasn’t the intent.” Since the inception of MAP, nine insurance companies have withdrawn from the program, further limiting availability.

Sen. John Seymour (R-Anaheim) and I both authored measures this past legislative session which would have created a Joint Underwriting Assn. to help child-care providers obtain liability insurance. With a JUA, all insurance carriers licensed in California would have to provide child-care liability insurance. Due to strong lobbying efforts by the insurance industry, our measures have been stalled in the Legislature.

We can only hope that members of the Insurance Commission will decide that a JUA is necessary in order for child-care providers to obtain some coverage.

DOMINIC L. CORTESE

Chairman, Assembly Select

Committee on Child Care

D-San Jose