Release: Senator Noreen Evans introduces legislation to give Insurance Commissioner greater consumer protection tools

Release: Senator Noreen Evans introduces legislation to give Insurance Commissioner greater consumer protection tools
March 1, 2011
Contact: Christopher Moore | 916.651.4002

SACRAMENTO – Senator Noreen Evans has introduced Senate Bill 631, legislation that helps protect consumers from the “David and Goliath” dynamics that can occur when a consumer seeks repayment of monetary losses or out-of-pocket costs associated with wrongful insurance company conduct.  Specifically, the bill grants explicit authority to the State Insurance Commissioner to order restitution as part of an administrative enforcement action against an insurance company.

“The status quo allows insurance companies to violate the law and then simply nudge consumers away from regaining the monetary losses they experienced,” said Senator Evans. “Restitution-granting authority already exists in several other state departments. SB 631 extends this same authority to the Insurance Commissioner and simultaneously provides built-in safeguard for all parties.”

“The Department of Insurance is required by law to protect consumers against misconduct from insurers,” Insurance Commissioner Dave Jones said. “However, the Insurance Commissioner does not have the authority to order insurers to restore out-of-pocket expenses or money wrongfully obtained due to insurer misconduct. This needs to change, and it needs to change now.”

Insurance consumers occasionally suffer monetary losses at the hands of their insurance providers. For example, they may be charged a higher premium than is allowed or receive less money than they are entitled to on a claim.  Currently, when an insurer breaks the law and causes monetary damages to a consumer, the only path to remedy for consumers is to sue insurers in court, which is time-consuming, expensive, and further burdens our courts.  SB 631 would remove this burden from wronged consumers and provide a clear path to reclaiming their monetary losses.

As much as this bill helps consumers, it also provides safeguards for insurers should they disagree with the restitution order by the Insurance Commissioner because under SB 631 insurers may still seek a judicial appeal and go to court. Additionally, should a consumer wish to directly pursue judicial action against an insurer, rather than receiving restitution through the Insurance Commissioner, Evans’ legislation still allows them to do so.

State Senator Noreen Evans represents the Second Senatorial District, including all or portions of the Counties of Humboldt, Lake, Mendocino, Napa, Solano, and Sonoma. She is Chair of the Senate Committee on Judiciary and the Legislative Women’s Caucus.

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