American Property Casualty Insurance Association
  • Staff Contact: Clare Fitzgerald     
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  • April 13, 2015
  • ACIC Applauds California Appellate Court Ruling Voiding Insurance Regulation on Replacement-Cost Estimates
  • SACRAMENTO -- The Association of California Insurance Companies (ACIC) commends the California Court of Appeal, First Division, for upholding the Superior Court ruling that invalidated the California Department of Insurance regulation dictating the content of replacement-cost estimates for homeowner’s insurance.

    The regulation, which was adopted in 2010 and went into effect in 2011, established specific requirements for replacement-cost estimates and decreed that any estimate not conforming to those requirements be deemed a misleading communication in violation of the Unfair Insurance Practices Act. ACIC and the Personal Insurance Federation of California filed suit against the Department of Insurance in 2011 alleging that the Department lacked authority to promulgate the regulation.

    “We are pleased that the Court of Appeal agreed with the trial court’s decision that the Department of Insurance exceeded its authority in its attempt to regulate the format and content of replacement-cost estimates,” said Mark Sektnan, ACIC president. “Insurers work to help policyholders understand their homeowner’s insurance coverage and coverage limitations, and consumer complaints on replacement-cost estimates are very few and far between. This regulation created unnecessary compliance costs and could have created greater confusion.”

  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $195 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 28 percent of the homeowners market, 33 percent of the commercial property and liability market and 35 percent of the private workers compensation market.
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