Governor Gray Davis has signed legislation sponsored by the Foundations for Taxpayer and Consumer Rights (FTCR) to make publicly available state market conduct exams of insurer misconduct in claims handling conducted by California Department of Insurance. SB 1805 (Escutia) is a reform springing from the scandal engulfing Insurance Commissioner Chuck Quackenbush, that ultimately led to his resignation.

Also signed by Governor Davis was SB 1899 (Burton), which allows Northridge earthquake claims to be refiled in wake of the evidence produced by the Insurance-gate scandal.

“This law sheds light on insurance companies that will no longer be able to hide behind the wall of secrecy at the Department of Insurance,” said Doug Heller, a consumer advocate with FTCR. “This is only the beginning of reforms needed to protect the public from misconduct by insurers. The legislature will have a chance next year to approve other bills to prevent the pernicious abuses of the Quackenbush era from being repeated.”

“Governor Davis has rightly pulled back the curtain shrouding state evidence of insurer misconduct that has wrongfully been kept secret from the public,” said Jamie Court, executive director of FTCR. “Policyholders deserve to know about state evidence of insurer abuses. The package passed today will help prevent the malfeasance of Mr. Quackenbush‘s tenure from being revisited on Californians, but more reforms will be needed to ward against future corruption of the insurance commissioner’s post and low-balling by the industry. Today’s laws are a good beginning and Governor Davis deserves praise for doing what was right for the public rather than what is best for the insurance industry.”