Calif. Bill Extends Quake Claims

Saturday, August 26th 2000, 12:00 am
By: News On 6

SACRAMENTO, Calif. (AP) — Legislation that could give thousands of victims of the 1994 Northridge earthquake another chance to file damage claims is on its way to the governor.

The bill, approved 21-7 Friday by the California Senate, was prompted by a scandal this spring involving then-Insurance Commissioner Chuck Quackenbush.

Lawmakers discovered that Quackenbush let a half-dozen insurers accused of mishandling the earthquake claims escape the possibility of billions of dollars in fines by giving money to a fund he created.

His department then dropped its pursuit of alleged claims violations.

The bill would give many property owners who say their insurance companies failed to compensate them for damage from the massive quake another year to file claims, starting Jan. 1.

Gov. Gray Davis hadn't decided whether he would sign the bill, spokesman Roger Salazar said.

Under current law, claims had to have been filed within a year of the earthquake.

The measure would not cover property owners who failed to contact their insurers about potential quake damage before the start of this year.

Senate Insurance Committee Chairwoman Jackie Speier said her panel heard from ``over 100 people who had been ripped off one way or the other by one insurance company or another.''

Opponents suggested the bill was premature.

Sen. Ray Haynes, R-Riverside, said it might be better to give the new state insurance commissioner, Harry Low, authorization to reopen claims where there was evidence an insurer mishandled a case.

Low succeeded Quackenbush, who resigned under threat of impeachment.

Instead of running the risk of up to $3 billion in fines, the insurers agreed to pay $19 million to nonprofit foundations set up by Quackenbush. Part of that money was used for TV ads that critics say benefited Quackenbush politically.

Insurance industry groups argue the bill is unconstitutional because it would violate insurance contracts that include a one-year statute of limitation on claims.

Insurers say more than 600,000 claims were filed after the quake and more than $15.3 billion has been paid to settle those claims.