BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 171|
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UNFINISHED BUSINESS
Bill No: SB 171
Author: Escutia (D), et al
Amended: 8/16/99
Vote: 21
SENATE INSURANCE COMMITTEE : 6-3, 4/21/99
AYES: Speier, Escutia, Figueroa, Hughes, Schiff, Sher
NOES: Johnston, Leslie, Lewis
NOT VOTING: Johnson
SENATE APPROPRIATIONS COMMITTEE : 9-3, 5/27/99
AYES: Johnston, Alpert, Burton, Escutia, Johnson,
Karnette, McPherson, Perata, Vasconcellos
NOES: Kelley, Leslie, Mountjoy
NOT VOTING: Bowen
SENATE FLOOR : 24-12, 6/1/99
AYES: Alarcon, Alpert, Baca, Bowen, Burton, Costa, Dunn,
Escutia, Figueroa, Hayden, Hughes, Johnson, Johnston,
McPherson, Murray, O'Connell, Ortiz, Peace, Perata,
Polanco, Schiff, Sher, Speier, Vasconcellos
NOES: Brulte, Haynes, Kelley, Knight, Leslie, Lewis,
Monteith, Morrow, Mountjoy, Poochigian, Rainey, Wright
NOT VOTING: Chesbro, Johannessen, Karnette, Solis
ASSEMBLY FLOOR : 43-30, 8/23/99 - See last page for vote
SUBJECT : Automobile insurance: lifeline policies
SOURCE : Foundation for Taxpayer and Consumer Rights
CONTINUED
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DIGEST : This bill makes legislative findings and
declarations with respect to the need for lifeline auto
insurance policies for low-income drivers.
Assembly Amendments make the bill only legislative findings
and declarations which has the effect of making the bill go
into Conference Committee.
NOTE: Senate Appropriations Committee staff indicates this
bill, along with SB 527 (Speier) and SB 652 (Speier), will
be going to Conference.
ANALYSIS : Existing law:
1.Requires motorists to demonstrate financial
responsibility by one of various means, including an
automobile liability insurance policy.
2.Specifies minimum coverages for the policy of $15,000 for
bodily injury to, or death of, one person, $30,000 for
bodily injury to, or death of, all persons, and $5,000
for property damage (15/30/5).
3.Requires insurers to participate in a plan, known as the
assigned risk plan, to provide automobile liability
insurance to those otherwise unable to obtain it.
Background
On April 7, 1999, the Senate Rules Committee discussed a
request by the Senate Insurance Committee to hire an
actuary to assist in the evaluation of proposals regarding
low cost auto insurance. The Senate Rules Committee agreed
to hire an actuary, contracted through the Senate Office of
Research (SOR), and it directed that the staff of authors
of various auto insurance bills, the SOR, and the Senate
Rules Committee meet to make recommendations for the scope
of the actuary's work and the timing of the report.
The State Department of Insurance (DOI) recently estimated
that about 22% of all California drivers are uninsured.
While this rate was estimated to be down from 28% as of
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1996, the figure still represents several million who are
in violation of the law and unable to pay for the damages
they may cause while driving.
In 1998, the DOI also conducted a random sample telephone
study of persons who have uninsured vehicles. Among the
findings of this lengthy study, the DOI concluded that 58%
of the uninsured had an interest in a
"low-cost/low-coverage" (LCLC) policy, and that 45% of
those presently insured with minimum limits coverage would
also be interested in a LCLC policy. Of all drivers who
were uninsured and who said that insurance cost too much,
57% expressed an interest in a LCLC policy if the price was
reduced 10% from the price they believed was being charged
for insurance. On average, these persons estimated that
currently-available insurance would cost them about $597
for six month's coverage.
The report also indicated that, "Demographically, the
uninsured had a higher likelihood [than insured drivers] of
being a home renter, having an income of less than $20,000,
being in the 18 to 24 age group, having a high school or
less education, being male, being Hispanic or Black, and
having lived in their present home for a shorter period of
time." The report also indicated, however, that persons
who were "pure uninsured" (no vehicle in the house was
insured) were more likely to be female, not employed,
single, and to speak a language other than English in the
household, than were the "hybrid uninsured" (at least one
of two vehicles insured in house).
On February 17, 1999, the DOI released a report on the
annual premium price paid by good drivers for 15/30/5
coverage in the 40 zip codes with the highest uninsured
rates, based upon data from five of the top ten insurers in
California. The DOI based its report on actual annual
premiums paid by good drivers as of the end of 1998, drawn
from DOI data gathered from insurers under the authority of
the Commissioner.
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In Los Angeles (22 of the 40 zip codes), the report
indicated that the 50th percentile price paid by consumers
varied from a low of $458 in zip 90022 to a high of $961
paid by consumers in zip code 90005. The low vs. high
range for the 10th percentile purchasers in the study
varied from a low of $218 in zip code 90022 (10% paid this
price or less in this zip code) to a high of $452 in zip
code 90005 (10% paid this price or less in zip code 90005).
The low vs. high range for the 90th percentile prices in
the study indicated that 90% of all consumers paid $660 or
less in zip code 90021, while at the high end of this range
$1,796 or less was paid by 90% of all consumers in zip code
90005.
Related Legislation
SB 519, SB 527, SB 944, SB 1213, and AB 976.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/23/99)
The Foundation for Taxpayer and Consumer Rights (source)
The Attorney General's Office
Oakland Tribune
Sacramento Bee
San Jose Mercury News
Pasadena Star News
ACORN (Association of Community Organizations for Reform
Now)
Alexandria House Homeless Shelter
Americans for Democratic Action
CALPIRG
Consumer Action
Consumer's Union
Feminist Majority-Kathy Spillar, National Coordinator
First African Methodist Episcopalian Church
HERE (Hotel Employees and Restaurant Employees), Local 814
Hollywood Urban Project
Jobs for a Future
LA Alliance for a New Economy
Proyecto Pastroal at Delores Mission
SEIU (Service Employees International Union), Local 660 and
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Local 1877
Southern Christian Leadership Conference
Alliance of American Insurers
Insurance Agents and Brokers Legislative Council
Association of California Insurance Companies
Professional Insurance Agents of California and Nevada
OPPOSITION : (Verified 8/23/99)
This bill was amended to state legislative findings. No
opposition has been registered on this current version.
ARGUMENTS IN SUPPORT : According to the author and the
Foundation for Taxpayer and Consumer Rights, sponsors of
this bill, California is an urbanized state in which public
transit is limited and often expensive, thus making driving
essential. The purpose of this bill is to create an
affordable, lifeline insurance policy that allows eligible
low-income, very good and good drivers to meet their
essential driving and household needs, while also complying
with California's financial responsibility law.
ARGUMENTS IN OPPOSITION :
ASSEMBLY FLOOR : 43-30, 8/23/99
AYES: Alquist, Aroner, Bock, Cardenas, Cedillo, Corbett,
Correa, Davis, Ducheny, Dutra, Firebaugh, Floyd,
Gallegos, Havice, Hertzberg, Honda, Jackson, Keeley,
Knox, Kuehl, Lempert, Longville, Lowenthal, Machado,
Mazzoni, Migden, Nakano, Papan, Romero, Scott, Shelley,
Soto, Steinberg, Strom-Martin, Thomson, Torlakson,
Vincent, Washington, Wayne, Wesson, Wildman, Wright,
Villaraigosa
NOES: Aanestad, Ackerman, Baldwin, Bates, Battin, Baugh,
Brewer, Briggs, Campbell, Cardoza, Cunneen, Dickerson,
Frusetta, Granlund, House, Kaloogian, Leach, Leonard,
Maddox, Maldonado, Margett, McClintock, Olberg, Oller,
Robert Pacheco, Pescetti, Runner, Strickland, Thompson,
Zettel
NOT VOTING: Ashburn, Calderon, Cox, Florez, Rod Pacheco,
Reyes, Wiggins
DLW:jk 8/23/99 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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