Calif. Blocks Bill to Boost Insurance Commissioner’s Penalty Powers

The California Senate Insurance Committee has blocked a restitution bill that would have given explicit authority to the state Insurance Commissioner to order restitution as part of an administrative enforcement action against an insurance company.

The insurance agent and broker community opposed Senate Bill 631, saying it would have given the commissioner “unprecedented new powers to punish broker-agents and other licensees ‘in all instances’ where he finds any violation of the California Insurance Code,’ according to Insurance Brokers and Agents of the West (IBA West).

But Sen. Noreen Evans, D-District 2, who sponsored the bill, said while existing law permits the commissioner to order restitution in some circumstances, Commissioner Dave Jones’ office believed that even when there are legal violations in which Californians are entitled to refunds or restitution, in many circumstances the commissioner had no specific authority to order refunds or restitution.