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Home My WebLink AboutCC Res 2858 1979-02-12 I I I , d RESOLUTION NUMBER ~l?~~ A RESOLUTION OF THE SEAL BEACH CITY COUNCIL OPPOSING ANY CHANGES IN THE PRESENT METHOD OF RATING AUTO INSURANCE AS REQUESTED BY THE AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA. WHEREAS, the cost of automobile insurance has escalated sharply in recent years, approximating 56% during the years 1975 through 1978; and WHEREAS, this increase has resulted in much public concern and efforts by public officials and others to contain or reduce the increased costs; and the City and County of Los Angeles initiated legal action in 1977 challenging the practice of automobile insurers whereby different rates are charged in different geographical areas designated rating territories; and WHEREAS, the California Legislature is considering legislation to prohibit the practice of charging varying rates by territory; and WHEREAS, WHEREAS, the California Legislature has requested the Department of Insurance to study territorial rating practices of insurers and report its recommendation to the Legislature by July 1, 1979; and WHEREAS, the Department of Insurance has requested comment from the public and elected representatives of the public on behalf of their constituencies; and WHEREAS, the Department of Insurance has ordered automobile insurers to justify territorial boundaries and insurance rate differentials by maintaining claims loss data by geographical area and adjusting rates when loss experience justifies such adjustments; and WHEREAS, upon analysis, the City of Seal Beach has concluded that abolishing territories will not reduce the overall cost of insurance to motorists, but will merely result in a reallocation of costs from higher-rated territories to lower-rated territories, creating a subsidy by one group of insureds for another; and WHEREAS, data provided by insurers indicates that residents of Seal Beach are in a lower-rated territory, and would be burdened with higher premiums for automobile insurance should territories be abolished and a statewide average rate substituted therefore; and WHEREAS, data received from some insurers indicates that a typical insured residing in the City of Seal Beach would have premiums increased 17 percent by such action; and I I I .. .. Resolution Number ~~~c:? WHEREAS, territorial rating recognizes that insurer losses vary from area-to-area, reflecting accident frequency, accident severity, theft and vandalism frequency, medical and vehicle repair costs, and a variety of other factors; and WHEREAS, upon analysis, territorial rating is an equitable method of allocating insurance costs among insureds throughout the state. NOW, THEREFORE BE IT RESOLVED, that the City of Seal Beach urges the Department of Insurance to recommend to the Legislature that the procedures for maintaining loss data and for allocating costs among insureds heretofore adopted by the Department and incorporated in its Bulletin 78-5 followed by all automobile insurers to assure that an equitable territorial rating system be maintained;. and BE IT FURTHER RESOLVED, that a copy of this resolution be provided to Insurance Commissioner Wesley J. Kinder for inclusion in the hearing record, and to Assemblyman Dennis Mangers and Senator John Schmitz for thier information. PASSED, APPROVED and ADOPTED by the City Council of th~Ctty of Seal Beach, at a meeting thereof held on the /.,,?I!I day of~~... ~! ' Nineteen Hundred and Seventy-nine. ) AYES' CO"'i1m.J;,~ ~~ J:-t t l~ CO""'il""~ ABSENT: Councilmen . NOES: Mayor ATTEST: ~ .. RESOLUTION "'0. dtf'~?' A RESOLUTION OF THE SEAL BEACH CITY COUNCIL OPPOSING ANY CHANGES IN THE PRESENT METHOV OF RATING AUTO INSUR- ANCE AS REQUESTEV BY THE AUTOMOBI LE CLUB OF SOUTHERN CALIFORNIA. I WHEREAS, the c.o"t 06 automob.i.f.e. .iYUluJLa.nc.e ha..6 uc.al'.ated "h.a.Ir.ply .in ILe.c.eYLt ye.aM, appMJUma..ting 56% duJL.i.ng the. ye.aM 1975 thlLough 1978; and WHEREAS, th.u. .inc.JLe.a.h e. ha..6 Jtu uUe.d .in much public. c.o nc.e.JLn and e.660m by public. 066.i.c..i.al6 and otheJL6 to c.onta..i.n OIL Jte.duc.e. the. .inc.JLelMl e.d c.o"u j and WHEREAS, the. CUy and County 06 Lo" Ange..f.u .il1U.<.a.ted .te.gal. ac..tion .in 1977 c.ha.Ue.ng.ing the. pttac..tic.e. 06 automob.i.f.e. .iYUlUJr.eJL6 whcvr.e.by cii.66cvr.e.nt lULtu Me. c.ha.Jtged .in cU.66cvr.e.nt ge.oglLapfUc.al. MelMl du.ignate.d JLa..ting tfl/lJLUoJLi.u; and WHEREAS, the. CaU60JLn.i.a. Le.g.u.WUILe. .u. c.oYUl.ide.Jt.i.ng .te.g.u..f.a.t.i.on to plLofUbU the. plLac..tic.e. 06 c.hMg.ing vMy.ing lULtu by teNLUoJuj; and WHEREAS, The. caU60Jtn1.a Le.g.u.WUlLe. hlMl Jtequute.d the Ve.paM:me.nt o 6 I YUl UlLanc.e. to "tudy teNLUoJL.i..a1. JLa..ting pttac..tic.u 0 6 .i.n6UJr.eJt.6 and ILe.polLt Lt6 ILe.c.ommenda..tioYUl to the. Leg.u.WUlLe by lu.f.y 1, 1979; and WHEREAS, the. VepalLtme.nt 06 IYUlUILanc.e. hlMl ILe.quuted c.omment 6JtOm the. pub.uc. and e..f.e.c.ted Jte.plLuenta..tivu 06 the. public. on I be.ha..f.6 06 the..i.JL c.oYUl.utuenc..i.u; and WHEREAS , the. Ve.paM:meYLt 06 I YUlUlLanc.e. ha..6 oMe.JLed automob.i.f.e. .i.n6U1LeJL6 to j Uh.ti6Y tfl/lJLUoJL.i..a1. boundaJUu and .iYUlUlLanc.e Jtate cU.66e.JLe.ntial.6 by ma..i.YLta..i.lu.ng c.i.a..i.mI> .to"" data. by ge.ogJtapfUc.a..f. Me.a. and adj Uh.ting lULtu when to"" e.xpeJLi.e.nc.e j Uh.ti6.i.U "uc.h adjUhtment.6; and WHEREAS, upo n anal.y".u., the CUy 0 6 Seal. B ea.c.h hlMl c.o nc..f.ude.d that abo!.u.fUng teNLUoJLi.u will. not ILe.duce. the. ovcvr.a.U. c.o"t 06 .i.n6U1Lanc.e. to motowu, but will. mcvr.e..f.y JtuuU -i.n a ILe.aU.oc.a..tion 06 c.o":U 61LOm fUghcvr.-lULte.d teNLUoJLi.u to .toWe.JL-lULte.d tfl/lJLUoJLi.u, c.JLea..ting a "ub".i.dy by one glLOup 06 .i.n6U1Ledl> 60Jt anothcvr.; and WHEREAS , data plLov.ided by .iYUlUILeJL6 .incU.c.a.tu that ILu.ident.6 06 Seal. Be.a.c.h Me. .in a .towcvr.-lULted tfl/lJLUOJty, and would be. bUILde.ne.d w.Uh fUghcvr. plLe.m.i.um6 60Jt automob.i.f.e .iYUluJLa.nc.e. "hould teNLi.- toJLi.u be. abo!.u.he.d and a "tatew.i.de. aVe.JLa.ge. lULte. "ub".ututed the.JLe.60Jt; and WHEREAS, data. ILe.c.uve.d 6JtOm "ome .iYUlUJr.eJL6 .incii.c.a.tu that a typ-i.c.aI'. .iYUlUILed ILu.icU.ng .in the. City 06 Seal. Be.a.c.h would have pJte.m.i.um6 h1c/LetUl ed 17 pcvr.c.e.YLt by "uc.h ac..tion; and I WHEREAS, teNLUoJL.i..a1. Jta..ting ILec.ogn.i.~u that .iYUlUILe.JL to""u vaJuj 6JtOm Me.a.-to-Me.a., ILe6te.c..ting ac.c..i.de.nt 6Jte.quenc.y, ac.c..i.deYLt "e.veJvi;ty, the.6-t; and vanda..f..u.m 6Jte.que.nc.y, me.cii.c.al. and vefUc..f.e. Jte.prUJr. c.o"u, and a vcvUe.ty 06 othcvr. 6ac.t01UJ; and WHEREAS , upon an.a.!y".u., tfl/lJLUoJL.i..a1. JLa.t.i.ng .u. an equUab.te. me.thod 06 aU.oc.a..ting .iYUlUlLanc.e. c.o"u among .i.n6U1Le.dI> thAoughout the "tate;