Senate Votes to Repeal Credit Insurance Law

The Senate voted Thursday to repeal a consumer credit insurance law that former Sen. Alan Robbins admitted taking a $12,200 bribe to help enact in 1985.

Approval of the repealer occurred with brief debate and only a pair of veiled references to the bribe and the long-running political corruption scandal that forced Robbins from office in November.

The bill by Assemblyman Lloyd G. Connelly (D-Sacramento) was approved 30 to 3 and returned to the Assembly, the final stop before it reaches Gov. Pete Wilson, who is expected to sign it.

The legislation would reinstate state regulation of credit life insurers who sell policies that pay off the balance of credit card and other installment payments up to $15,000 if the consumer dies or becomes disabled.

Consumers Union and other proponents of the bill contend that under a 1985 deregulation law written by Robbins, then-chairman of the Senate Insurance Committee, consumers have been charged $30 million in excess premiums.

The Robbins legislation, strongly supported by the credit life insurance industry, stripped the insurance commissioner of regulatory powers over credit life insurance and gave it to the Legislature, which never exercised the authority.

Typically, consumers making purchases up to $15,000 for such items as furniture, household appliances and other goods purchased over time by installment payments, are advised to protect themselves with credit insurance so the balances will be paid in case of death or disabling injury.

But Connelly and other opponents charge that the unregulated industry has hit consumers with exorbitant premiums since 1985.

Robbins was caught in the net of the FBI’s investigation of corruption in the Capitol and resigned his seat in November. Among other things, he said he took a $12,200 bribe from a now bankrupt Los Angeles-based insurance firm for his efforts to make his deregulation bill law.

A former executive of the company has denied any bribe payment to Robbins. The firm has not been charged in the case.