Tuesday, May 10, 2011

Legislation Enhancing Punitive Powers of California Insurance Commissioner Fails to Make its Way out of Committee

A bill recently introduced in the California legislature that would have provided specific authority to the state Insurance Commissioner to order restitution as an element of any administrative enforcement action against an insurance company has failed to make it out of committee.

The Insurance Brokers and Agents of the West (IBA West) had spoken out in opposition to the bill, stating it would have provided the commissioner with excessive power to punish any broker-agent or other insurance licensees whenever, in the commissioner's opinion, any violation of the state insurance code had taken place.

According to the bill's sponsor Sen. Noreen Evans, whose district encompasses several counties in the northern portion of the San Francisco Bay Area, the bill was needed due to the insurance commissioner in many cases presently lacking the specific authority necessary to order restitution or other financial compensation when violations of the state insurance code had been determined to have transpired.

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