American Property Casualty Insurance Association
  • Staff Contact: Nicole Mahrt-Ganley     
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  • November 1, 2016
  • Insurance Trades Argue CDI Overreached Its Authority Before California Supreme Court

    Regulatory overreach trend is driving up costs and hurting customer service

    SACRAMENTO -- The following statement is in response to today’s oral argument before the California Supreme Court in the case of ACIC v. Jones (Case No. S226529).  ACIC, the California voice of the Property Casualty Insurers Association of America and the Personal Insurance Federation of California (PIFC) see this case as an example of a growing trend where regulators overreach their mandates with data calls and regulations that go beyond their mission and authority.  This regulatory overreach trend is driving up costs for insurers and their customers in addition to impairing insurers’ ability to effectively serve their customers.

    ACIC and PIFC are asking the California Supreme Court to uphold the California Court of Appeal and trial court’s rulings that invalidated the California Department of Insurance regulation dictating the precise content and format of replacement-cost estimates for homeowner’s insurance.

    The 37-subpart regulation, which was adopted in 2010 and went into effect in 2011, established specific requirements governing 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 PIFC filed suit against the Department of Insurance in 2011 alleging that the Department lacked authority to promulgate the regulation.  The following statement can be attributed to Ted Boutrous, a partner and global co-chair of the litigation group at Gibson Dunn, who serves as counsel of record for ACIC and PIFC, along with his partner, Julian Poon, and Gene Livingston of Greenberg Traurig:

    “We were pleased to have an opportunity to highlight for the Court a number of important issues concerning the Insurance Commissioner’s overreaching his authority under the particular statutory provisions at issue in this case.” 

    PIFC is a California trade association representing seven property and casualty insurers that together write over 50 percent of auto and homeowners insurance sold in the state.

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  • ACIC, the California voice of the Property Casualty Insurers Association of America, represents 363 property casualty insurance companies doing business in California. These members write $20.2 billion in premium in California insuring 36 percent of the property casualty insurance sold in the state. California members write 44 percent of personal auto insurance, 29 percent of homeowners insurance, 33 percent of commercial lines business insurance and 40 percent of private workers compensation insurance sold in California.
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