BILL NUMBER: AB 1453	CHAPTERED  10/10/99

	CHAPTER   796
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 7, 1999
	PASSED THE SENATE   SEPTEMBER 3, 1999
	AMENDED IN SENATE   JUNE 23, 1999
	AMENDED IN SENATE   JUNE 14, 1999

INTRODUCED BY   Committee on Insurance (Scott (Chair), Oller (Vice
Chair), Calderon, Cox, Floyd, Gallegos, Havice, Keeley, Leonard, and
Wayne)

                        FEBRUARY 26, 1999

   An act to amend Sections 10089.70 and 10089.84 of the Insurance
Code, and to amend Section 3 of Chapter 899 of the Statutes of 1995,
relating to earthquake insurance, making an appropriation therefor,
and declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1453, Committee on Insurance.  Earthquake insurance:
mediation:  retrofit program.
   (1) Existing law, until January 1, 2000, requires the Department
of Insurance to establish a pilot program for the mediation of the
disputes between insured complainants and insurers arising out of the
Northridge Earthquake of 1994 or any subsequent earthquake.
   This bill would extend this termination date until January 1,
2005.   It would require the Insurance Commissioner to report to the
Governor and the Legislature by August 1, 2004, on whether the pilot
program should be extended and on other specified matters.
   (2) Existing law, until July 1, 2000, requires the Department of
Insurance to provide grants and loans to help pay for the
retrofitting of high-risk residential dwellings owned or occupied by
low- and moderate-income households.  Existing law appropriated
$4,400,000 from the California Residential Earthquake Recovery Fund
to the Department of Insurance to fund both the grant and loan
program and its administration by the department.
   This bill would appropriate an additional $3,400,000 for the
program and its administration and would extend the authorization to
expend the moneys appropriated for the program and the existence of
the program itself until July 1, 2003.
   (3) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10089.70 of the Insurance Code is amended to
read:
   10089.70.  The department shall establish a program for the
mediation of the disputes between insured complainants and insurers
arising out of the Northridge Earthquake of 1994 or any subsequent
earthquake.  The program shall apply only to personal lines of
insurance related to residential coverage.  The goal of the program
shall be to favorably resolve a statistically significant number of
disputes sent to mediation under the program.  This chapter does not
apply to any dispute that turns on a question of major insurance
coverage or a purely legal interpretation, or disputes involving the
actions of an agent or broker in which the insurer is not alleged to
have been responsible for the conduct, or any complaint the
commissioner finds to be frivolous, or any dispute in which a party
is alleged to have committed fraud.
  SEC. 2.  Section 10089.84 of the Insurance Code is amended to read:

   10089.84.  This chapter shall remain in effect until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2005, deletes or extends
that date.  Any case referred to mediation by the department prior to
January 1, 2005, shall be mediated under this chapter whether or not
the mediation has been completed prior to January 1, 2005.  No later
than August 1,  2004, the commissioner shall report to the Governor
and the Legislature on whether the pilot program should be extended,
expanded, terminated, or otherwise modified and shall include
specific findings regarding the use of the program by insureds and
insurers.
  SEC. 3.  Section 3 of Chapter 899 of the Statutes of 1995 is
amended to read:
  Sec. 3.  The sum of four million four hundred thousand dollars
($4,400,000) is appropriated from the California Residential
Earthquake Recovery Fund to the Department of Insurance for the
program established pursuant to this act.  During the second half of
the 1995-96 fiscal year, the Department of Insurance may use up to
one hundred fifty-nine thousand dollars ($159,000) for costs of
initial implementation and administration of the program.  During the
1996-97 and 1997-98 fiscal years, no more than two hundred thousand
dollars ($200,000) per fiscal year may be used by the department to
administer this program.  Thereafter, no more than two hundred
sixty-five thousand dollars ($265,000) per fiscal year may be used by
the department to administer the program.
   Money appropriated by this section shall be available for
expenditure until July 1, 2003.  On and after that date, the program
established by Chapter 899 of the Statutes of 1995 shall no longer be
operative.
  SEC. 4.  The sum of three million four hundred thousand dollars
($3,400,000) is appropriated from the California Residential
Earthquake Recovery Fund to the Department of Insurance for the
program established pursuant to Chapter 899 of the Statutes of 1995.
Money appropriated by this section shall be available for
expenditure until July 1, 2003.
  SEC. 5.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to facilitate the issuance of grants and loans to provide
protection to homeowners from earthquake loss and injury through
retrofitting of homes in areas with a high risk of earthquake, and to
continue an earthquake mediation program, it is necessary that this
act take effect immediately.