Lockyer Delays Action on Quake Insurance Agency Bill

Action on a bill to create a state earthquake insurance agency was delayed Monday for at least a week and probably longer when state Senate President Pro Tem Bill Lockyer (D-Hayward) called for more hearings.

Lockyer objected last week to a closed-door compromise reached by three other legislative leaders, terming it too friendly to the insurance industry. He wrote to the three Senate members of a Senate-Assembly conference committee that has been struggling with the issue for months and asked them to seek more public comment and not vote this week.

Conference committee chairman Sen. Charles M. Calderon (D-Whittier), one of those who had worked out the compromise, reluctantly acceded to Lockyer’s request, although he said he believes that nothing new can be said about the bill to create a California Earthquake Authority.

Calderon said he would support an alternative to the authority if a better one is proposed, but he expressed doubt that it would be.

There were indications Monday that the delay may be for many weeks. Sen. Herschel Rosenthal (D-Los Angeles), another conference committee member and an authority opponent, said Lockyer has told him that he can call additional public hearings on the matter--even if it passes through the conference committee.

That could put resolution of the issue well past a monthlong legislative recess that begins July 12.

Many legislators have expressed reluctance to decide the issue, because they realize that the new authority would cut back substantially on the insurance protection that millions of California homeowners traditionally have had against earthquake damage.

But a spokesman for state Insurance Commissioner Chuck Quackenbush--who has strongly backed the authority--said Monday that coverage has already been cut back by most companies through the offering of a mini-policy authorized by the Legislature last year to replace regular policies.

“Consumers aren’t going to get any less coverage from the earthquake authority than they will get from the new mini-policies,” Deputy Insurance Commissioner Richard Wiebe said. “In fact, if the companies offer them at all, they will cost more and offer even less coverage.”

Consumer group representatives Monday continued to oppose the creation of the authority and called on the Legislature to let the private market take its course.

Insurance and real estate lobbyists, however, told conference committee members that an insurance availability crisis will only intensify without the authority. They said that the resulting inability to buy homeowners and earthquake coverage in the weeks ahead will adversely affect the housing market and the state’s economy.