BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2161|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
CONSENT
Bill No: AB 2161
Author: Quirk (D)
Amended: 4/13/16 in Assembly
Vote: 21
SENATE INSURANCE COMMITTEE: 8-0, 6/22/16
AYES: Roth, Gaines, Berryhill, Glazer, Hall, Hernandez,
Mitchell, Wieckowski
NO VOTE RECORDED: Liu
ASSEMBLY FLOOR: 78-0, 5/12/16 (Consent) - See last page for
vote
SUBJECT: Parking lots: design: insurance discount
SOURCE: Author
DIGEST: This bill allows an insurer to consider the
installation of vehicle barriers as a safety measure for
purposes of providing or offering a discount on the property
owner's commercial property insurance; and requires any such
discounts to be determined to be actuarially sound and approved
by the Insurance Commissioner (IC) prior to their use.
ANALYSIS:
Existing law:
1)Requires specified insurance rates to be approved by the IC
prior to their use under the Insurance Rate Reduction and
Reform Act (Proposition 103, as approved by the voters in
AB 2161
Page 2
1988) (Prop. 103).
2)Specifies that no rate shall be approved or remain in effect
which is excessive, inadequate, unfairly discriminatory or
otherwise in violation of statute.
3)Provides that the insurer has the burden of proving that a
requested rate change is justified.
4)Requires a rate change application to include specified
information including, but not limited to premiums written,
premiums earned, unearned premiums, the dollar amount of
claims paid, the number of outstanding claims, losses incurred
as a percentage of premiums earned, and expenses incurred
including loss adjustment expense, commission and brokerage
expense, other acquisition expense and general expense.
5)Establishes the California Building Standards Commission
(CBSC) within the Department of General Services, and requires
any building standards adopted or proposed by state agencies
to be submitted to, and approved by, the CBSC prior to
codification into the California Standards Code.
6)Requires the CBSC to adopt, approve, codify and publish
building standards providing the minimum standards for the
design and construction of state buildings, as specified.
This bill:
1)Allows an insurer to consider the installation of vehicle
barriers as a safety measure for purposes of providing or
offering a discount on the property owner's commercial
property insurance.
AB 2161
Page 3
2)Requires any discounts to be determined to be actuarially
sound and approved by the IC prior to their use.
3)Defines a vehicle barrier for this purpose as a device that
meets the vehicle impact protection standards as provided by
the State Fire Marshal and adopted by the CBSC and that is
installed to protect persons located within, in, or on the
property of, buildings from collisions into those buildings by
motor vehicles.
Background
According to the author, vehicle-into-building crashes have been
reported to occur as many as 60 times per day, with more than
3,600 pedestrians, store patrons, and employees seriously
injured each year, nationwide. Sometimes called "storefront
crashes," these accidents are often caused by driver error.
Most of these accidents can be prevented with simple and
inexpensive steps, including the installation of vehicle
barriers that can be taken in either the design phase or as part
of a retrofit.
According to the Texas A&M Transportation Institute (TTI),
simple, preventative measures can protect pedestrians, store
employees, and patrons from being injured or killed when
accidents occur. In recognition of the safety risks posed by
errant vehicles and the increasingly important use of protective
barriers as a way to prevent or minimize the damages from these
types of accidents, the American Society for Testing and
Materials International, an international standards development
organization, in conjunction with the researchers at TTI,
recently approved a test standard, known as the Test Method for
Low Speed Barriers for Errant Vehicles, to set parameters for
bollards, barriers, and other devices most often seen protecting
storefronts and high-traffic pedestrian areas to help
standardize the use of protective barriers. Prior to the
adoption of this standard, there was no objective way to
evaluate the effectiveness of vertical pipes, decorative
AB 2161
Page 4
planters, and other devices that could serve to protect a
business from damages caused by a vehicle-into-building
collision.
Although this bill draws attention to the safety aspects of
vehicle barriers, insurers already consider the condition and
safety features of a commercial property when writing a
commercial insurance policy. Prop. 103, however, generally
requires historical loss-based actuarial data to justify a
discount in insurance premiums paid by an insured. The
development of standards and ability to evaluate barrier
effectiveness provided by this bill may make it easier for
insurers to assess the extent to which their risk and exposure
is reduced as a result of the installation of such barriers, and
provide an actuarial justification in a rate filing subject to
IC prior approval so a discount specific to vehicle barriers
could be offered.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/27/16)
Personal Insurance Federation of California
OPPOSITION: (Verified6/27/16)
None received
ARGUMENTS IN SUPPORT: The Personal Insurance Federation of
California supports AB 2161 because it could help prevent damage
and injury in storefront crashes by encouraging adoption of
protective barrier standards and authorize an insurer to
consider the barriers as a safety measure eligible for
AB 2161
Page 5
discounted building insurance rates.
ASSEMBLY FLOOR: 78-0, 5/12/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon,
Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Burke, Jones-Sawyer
Prepared by:Erin Ryan / INS. / (916) 651-4110
6/29/16 15:45:39
**** END ****