California Senate Considers Bill That Would Relax State's Anti-Steering Law
June 11, 2009

The California Senate read a bill that would ease the state’s anti-steering law for the first time last week. The bill, which has already passed the state’s Assembly, is designed to “provide that nothing in existing law restricts the ability of an insurer to explain benefits the insurer provides as part of the claims process.”

A.B. 1200 would amend the state's insurance law, which prohibits insurers from suggesting an automotive repair facility unless requested by the claimant, or if the claimant has been informed in writing of the right to select an automotive repair facility, so that it would now contain the following additional language:

Nothing in this section restricts the ability of an insurer to explain benefits the insurer provides as part of the claims process.

The bill is currently in the Senate's committee on rules.

The bill has received much support from several insurance groups, including the Personal Insurance Federation of California, the Association of California Insurance Companies, Farmers Insurance, National Association of Mutual Insurance Companies (NAMIC), the Pacific Association of Domestic Insurance Companies (PADIC) and State Farm, who argue that existing laws are being used "to withhold information from customers about their auto repair options," according the Assembly insurance committee's analysis of the bill.

However, the bill also has seen much opposition from automotive groups. In addition, U.S. Congresswoman Jackie Speier (D-Calif.), who sponsored the state's existing anti-steering law as a member of the California assembly, has spoken out against it via a letter to the California insurance commissioner, in which she says "the bill would allow insurers to continue to make sales pitches to consumers long after the consumer has decided to select his/her own shop."

CLICK HERE for full text of bill.

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