Bill increases protection for homeowners impacted by wildfires

Recently the Daily Journal printed an article by Jon Eisenberg asserting that a bill my Department of Insurance is sponsoring would be bad for homeowners affected by wildfires. ("Senate Bill is bad for homeowners affected by wildfires," May 11). In the process Eisenberg attacks me and State Sen. Bill Dodd, the author of Senate Bill 1291.

Eisenberg has both his facts and law wrong. And in making his erroneous assertion, Eisenberg aligns himself with the large insurance companies vehemently fighting me in the State Capitol against enhanced consumer protections for wildfire survivors such as those in SB 1291.

First some context. Last year, California was hit with major natural disasters. Wildfires and the mudslides that followed took the lives of 69 people. Statewide, insurers received nearly 45,000 claims totaling more than $12.3 billion in insured losses for the wildfires. Damage from mudslides resulted in over 2,000 insurance claims and more than $421 million in insured losses. Fueled by climate change, significant annual wildfires unfortunately appear to be a part of California's present and future at a level and frequency not often seen in the past.

I have met numerous survivors of the wildfires and mudslides and heard their harrowing stories of unprecedented loss and despair. Senator Dodd's bill would significantly enhance consumer protections so that only claims adjusters who have gone through adequate training, education and background checks can be used by insurers to handle consumers' claims.

So-called independent insurance claims adjusters are not in fact "independent" because they contract with an insurance company. While my department worked closely with the survivors during the insurance claims process we found it necessary to notify all parties that some representations made by claims adjusters to consumers who had just traumatically lost everything were in conflict with California laws.

The inaccurate information provided by some claims adjusters was one of the factors that prompted the introduction of SB 1291 by Sen. Dodd. This bill responds to those issues and addresses a consumer protection shortcoming. While California typically has stronger consumer protections than other states, the licensing of independent insurance adjusters is one area where California's consumer protections are much weaker than the other 34 states that license independent insurance adjusters.

SB 1291 closes an existing gap in the current California adjuster licensing system. Specifically, California is the only state of the 35 states that license independent insurance adjusters that exempts independent insurance adjuster employees from the fingerprint-based background review and the education requirements that are a part of current licensing requirements -- education that some claims adjusters were sorely lacking in that they provided incorrect information to policyholders in the wake of the 2017 wildfires.

SB 1291 fixes flaws in the current licensing system by requiring individual licensure for independent claims adjusters instead of organizational licensure, to align California with most other states. My department estimates there are approximately 30,000 unlicensed claims adjusters who have not gone through the education and fingerprint-based background check. The new requirements in SB 1291 will prevent consumers from being put at risk during the handling of their claim by someone with a criminal record, particularly if the conviction is related to dishonesty or breach of trust. SB 1291 also ensures that independent claims adjusters are familiar with California's consumer protections.

But the actual facts of what happened to wildfire and mudslide-impacted Californians and the content of SB 1291 don't appear to interest Eisenberg much. He incorrectly asserts that SB 1291 "guts" the registration and supervision requirement for unlicensed out-of-state adjusters in a declared emergency. However, SB 1291 provides additional consumer protections by requiring each independent insurance adjuster to certify that they have read, and understand, California law. That's why Eisenberg spends more than half of his article attacking me personally and making baseless allegations. I stand firmly behind my strong pro-consumer actions in my seven plus years as California's elected insurance commissioner. I have fought for consumers each and every day I've had the privilege to be in office. As insurance commissioner I have not taken contributions from insurers. To suggest otherwise is preposterous and flies in the face of reality.

Eisenberg ended his missive with a plea to kill SB 1291, which is the exact same position that the Personal Insurance Federation of California, which represents insurance companies including State Farm, Allstate, Liberty Mutual, Progressive, Nationwide and Mercury, takes against the bill. So who is actually siding with the insurance industry on this issue? The record clearly indicates it is Eisenberg. I, along with Sen. Dodd and other legislators, am leading the fight to help survivors of last year's devastating fires. I am sponsoring a dozen bills to help fire survivors get treated fairly by their insurance companies.

SB 1291 is a proactive measure that requires all individuals to be licensed and go through a pre-licensing vetting process. That's just fairness, common sense and reasonable consumer protection. Claims adjusters and their employees will no longer be able to rely on an adjusting firm's license alone to adjust insurance claims in California, just like in 70 percent of states. This bill will increase the standards and threshold requirements for an individual to adjust insurance in California and provide the protection that Californians deserve. Those are the facts.