IABAC, october 29, 2010

The Producer’s Advocate A real advocate for agents and brokers in California’s tough economic & regulatory environment !

Newsletter, Volume 6 October 29, 2010

This is a message from Mike Villines to the Producer’s Advocate Readers, in his campaign to be California’s Insurance Commissioner:

Greetings!

I am in the home stretch of my campaign to be California’s Insurance Commissioner and I need your help to bring me across the finish line! With only few days to go before the General Election I have begun my TV and mail program and am working hard to stay on the air and in voter’s mailboxes through election day. In order to do this through the final stretch of my campaign, I need your help! In order to get my message out and defeat my opponent, Dave Jones, I need to raise as much money as possible between today and Election Day to communicate to the people of California!

Villines: “I will promote a more competitive insurance market, helping to create more jobs”

OP ED: Media fails to reveal both sides of CA Insurance Commissioner’s Contest

By Joe Jimenez, President of IABAC

T Without help from my friends I won’t be able to stop my opponent who believes: we should repeal ALL of the workers compensation reforms we achieved in 2004: that Obamacare is a good “first step” on the way to single payer-government run universal healthcare; and most alarming, receives the majority of his money from trial lawyers and public employee unions.

As Insurance Commissioner, I will promote a more competitive insurance

Tuesday November 2, 2010

is Election Day Let your voice be heard...

GET OUT AND VOTE!

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market helping to create more jobs, a more efficient Department of Insurance which will save consumers more money, affordable insurance for individuals and businesses, more competition and choice in the insurance markets, faster approval of new and innovative insurance products, keeping workers compensation prices low and cracking down on insurance fraud.

As the November General election fast approaches it is a critical time for us to look at what is important for our families, our businesses, and our way of life. I am asking you to join my campaign through a financial contribution and helping me reach my fundraising goals!

he race for Insurance Commissioner in California is heating up with Election Day less than a week away. Some in the state media are anxiously pointing out political contributions to Republican candidate Mike Villines, while virtually ignoring more notable contributions to Democrat, Dave Jones.

On October 18, 2010, the Insurance Journal printed a story written by Don Thompson criticizing Villines for receiving contributions to his campaign from the business community.

The story however, failed to sufficiently highlight who is contributing to Democrat Dave Jones’ campaign and how much. According to the Civil Justice Association of California (CJAC) , Jones is the next largest recipient, after gubernatorial candidate, Jerry Brown to receive money from trial lawyers throughout the state and country.

Thank you so much, Mike Villines

Joe Jimenez, CSIS Insurance, CEO of the Insurance Agents and Brokers Association of California (IABAC).

Trial Lawyers Give Most Cash to Brown, Jones, and Harris in Third Quarter, CJAC Reports SACRAMENTO - With the primary elections over, California plaintiffs’ lawyers focused their political contributions on candidates for statewide office during the three months ending on September 30, an analysis of state political contribution records shows.

During the reporting period, individual personal injury lawyers and other trial attorneys, their family members, law firms, and political action committees gave $686,500 to candidates for statewide office and another $39,800 to legislative incumbents and candidates for a total of $726,300, according to a Civil Justice Association of California analysis of data collected by the Secretary of State’s office.

By far the most trial lawyer money went to Jerry Brown, the Democrat running for Governor against Republican Meg Whitman. Brown received $391,500 from plaintiffs’ lawyers, while Whitman received $750.

Since the current election cycle began on January 1, 2009, trial lawyers have given more than $1.1 million to Brown, about 3 percent of his total contributions from all sources.

The next largest recipient of trial lawyer cash was Dave Jones, the Democratic nominee for Insurance Commissioner. Jones received $177,700, while his Republican challenger, Mike Villines, received no contributions from personal injury attorneys. To date, plaintiffs’ lawyers have given Jones $448,900, which is 13 percent of the total he has raised.

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Attorney General candidate Kamala Harris, who in the past three months received $81,200 from trial lawyers. In all, Harris has received $166,000 from trial lawyers, or 3 percent of her total.

Her Republican opponent, Steve Cooley, received $34,300 from trial lawyers, bringing his total from personal injury lawyers to $64,000, or 2 percent of his total.

“These lawyers are among the largest contributors to political candidates in California,” noted CJAC President John H. Sullivan.

“While political contributions are a legitimate part of our freedom to communicate and select government representatives, the public should be informed when a powerful special interest is conducting a massive program to elect representatives whom it believes will further its own narrow agenda.

“And if past elections are an indication of what’s to come, we can expect a flood of trial lawyer money in the last few weeks before the election.”

Sullivan noted that most contribution tracking only looks at plaintiff lawyer political action committees and therefore drastically undercounts the dollars these lawyers ship to candidates and incumbents. The Civil Justice Association, on the other hand, fully reviews state campaign records in order to calculate the significant money flowing through all the different channels plaintiffs’ lawyers use.

“For example, in 2006, the last time California elected statewide office holders, trial lawyer PACs contributed a little over $300,000.

But money from individual plaintiffs’ lawyers, their law firms, and their family members totaled almost $3 million - 10 times as much.”

During the third quarter, plaintiffs’ lawyers made only modest contributions in the handful of competitive general election races for legislative districts. Among those receiving trial lawyer contributions were Democratic Assembly Member Joan Buchanan, who received $2,500 in her bid for re-election to an East Bay-Central Valley district seat, and Democrat Phu Nguyen, who picked up $2,000 in his bid to win an Orange County Assembly contest.

During the 2009-10 election cycle, three legislative candidates received $75,000 or more from trial lawyers: • Betsy Butler, the former development director for the trial lawyers’ state association, who received $216,300 (29 percent of her total) to win a hotly contested Democratic primary in the 53rd Assembly District in Los Angeles County; • Attorney Bob Wieckowski, who received $133,500 (26 percent of his total) in winning a twoperson race in the Democratic primary in the 20th Assembly District in Alameda County; • And Mary Salas, who received $84,300 (10 percent of her total) in her losing campaign against CJAC-supported Juan Vargas for the Democratic nomination in the 40th Senate District in San Diego, Imperial, and Riverside counties

ADDITIONAL SECURITY FEATURES

DMV Begins Issuing New California Driver Licenses, ID Cards The California Department of Motor Vehicles (DMV) announced the issuance of newly designed, more secure California driver licenses and identification cards. The new cards are distinguished by additional security features and will have a different look and feel.

Details of the changes to the card were presented and unveiled today at a press conference held at the DMV field office in South Sacramento. The new cards are equipped with the latest in document security technology and have several features to protect them against fraud, tampering and counterfeiting.

“The new security features, coupled with advanced technology, make California driver licenses and identification cards one of the most secure identification documents in the country,” said DMV Director George Valverde.

“We are confident that they will be well-received by residents, businesses and law enforcement officials.”

Information included on the new cards remains the same, but is presented in a new way that improves readability and ease of use.

Some of the new features include a vertical layout for persons under 21; the cardholder’s date of birth and signatures that can be felt by touch; images that can be seen only with the use of ultraviolet lights; a 2D bar code on the back of the card that replicates and verifies only the information on the front of the card (similar to the current magnetic stripe); and a laser perforation outline of the California Brown Bear, which can be seen from the front of the card when a flashlight is pressed against the back of the card.

Annually, the DMV issues more than 8.25 million driver license and ID cards to Californians. It is of the utmost importance that these documents are safe, authentic, secure, and accurate to properly identify each individual cardholder.

More importantly, these cards have been designated as the primary identification documents in the state. This is the first major revision of California driver licenses and ID cards since 2001.

More secure California driver licenses

While new cards began to be issued earlier this week, existing ID or driver license cardholders are not required to get a new card.

For more information on the new driver license and ID card or to conduct other DMV business online, visit www.dmv.ca.gov

“It is very important to understand that cardholders are not required to get new cards until the expiration date printed on their current cards.” said Director Valverde. “Remember, when it is time to renew your card, DMV has many services that are offered online to help customers avoid going into the field offices.”

INSURANCE COMMISSIONER ...1

This is the Official Certified List of Candidates

* William Balderston (Teacher/ Union Organizer) Green * Richard S. Bronstein (Licensed Insurance Broker) Libertarian * Dave Jones (Member California State Assembly) Democratic * Dina Josephine Padilla (Injured Worker Consultant) Peace and Freedom * Clay Pedersen (Retail Manager) American Independent * Mike Villines (Bussinessman/ State Assemblyman) Republican

REMEMBER: Tuesday November 2, 2010 is Election Day Let your voice be heard...GET OUT AND VOTE!

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Protesters demonstrated against healthcare reform outside the U.S. Capitol in Washington, DC, in March 2010 before the bill was being voted on.

By Nicholas Kamm, AFP/Getty Images

expansion of government. Plaintiffs challenging the law include a variety of religious groups, the nation’s largest smallbusiness trade association, and a who’s who of conservative legal activism.

Lawsuits over health care law heat up

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att Sissel of Iowa City proudly served in Iraq as a combat medic. But he objects to being “conscripted” into an overhauled federal health care system.

The uninsured artist is riled about a provision in the new health law that would require him to purchase insurance or pay a penalty starting in 2014. Last July, he filed a lawsuit to have the landmark act declared unconstitutional. “I don’t want the federal government dictating my personal financial decisions,” says Sissel, 29. “It can’t even run its own budget.”

In attacking the law in the courts, Sissel has plenty of company. A number of interest groups, state officials and ordinary citizens are seeking to have the health care law struck down in federal court, and action is heating up: •This week or next, a federal judge in Pensacola, Fla., is expected to issue a preliminary ruling on perhaps the most prominent lawsuit. Brought by the governors or attorneys general of 20 states, the lawsuit seeks to have the act declared unconstitutional.

By Rick Schmitt, Kaiser Health News

HEALTH CARE: New website compares coverage prices •On Oct. 18, the Republican attorney general of Virginia — who has compared the Obama administration’s regard for individual rights to the tyranny of King George — heads back to court for another round of hearings with a federal judge who recently turned down a Justice Department request to throw the case out.

The burst of litigation has the framers of the law and the Obama administration playing defense. Many scholars, such as Charles Fried of Harvard Law School, argue that the law is on firm legal footing.

But there is no quick resolution in sight, and it may take a year or two, and a trip to the U.S. Supreme Court, for all the lawsuits to get sorted out. Still, that might be a quicker route to upending the law, or parts of it, than a threatened GOP repeal effort in Congress. Even if Republicans pick up more seats in November, they’ll have a tough time getting major changes past President Obama.

•Any day, a judge in Michigan could act on a request by the Thomas More Law Center to issue an injunction blocking the government from taking any further action implementing the law. The non-profit law firm, based in Ann Arbor, often brings antiabortion cases.

Under the health care law enacted in March, more than 32 million additional Americans are expected to get insurance, either through an extension of Medicaid, the state-federal program for the poor, or through exchanges where low- and moderate-income individuals and families can buy private insurance with federal subsidies.

REFORM: A consumer primer for health insurance changes in 2011

The law’s ambitious sweep has made it a target for those who see it as an unjustified

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Sissel, for example, is represented by the Pacific Legal Foundation, a Sacramentobased legal watchdog group that supports limited government, property rights and free enterprise.

Liberty University, the fundamentalist Lynchburg, Va., college founded by the late Jerry Falwell, has filed a lawsuit claiming that exemptions from the law for religious groups are too narrow and violate freedom of religion under the First Amendment.

The Tucson-based Association of American Physicians and Surgeons, which opposes government intervention in health care, also has sued.

Several cases, similar views In many cases, the lawsuits make similar arguments. Several contend, for example, that a provision of the law requiring most people without health insurance to get coverage or pay a penalty exceeds the power of Congress to regulate interstate commerce under the Constitution.

The states, in the Florida lawsuit, also are challenging a provision of the law that greatly expands Medicaid. They claim the changes will cost them billions of dollars and wreck their budgets for years.

Justice Department lawyers say the lawsuits are without merit and premature. The penalties for people without insurance won’t take effect until 2014, and the states won’t have to start picking up costs of the expanded Medicaid until 2017.

But critics say the changes are so profound, the courts should act now. The law will “transform our nation beyond recognition” and “arm Congress with unbridled topdown control over virtually every aspect of persons’ lives,” the states have argued in court documents in the Florida case.

Florida Attorney General Bill McCollum said in an interview that if the individual

insurance requirement is upheld, there is no end to what the federal government might require people to do. “The government could ... force us to buy a General Motors car or put our money in a governmentowned bank,” he says.

Justice Department lawyers respond that the law was well within the power of Congress to enact. In court papers in the Florida case, they have described the law as “an important but incremental” extension of federal regulation of the health care market.

Supporters of the law say healthy people must be required to buy coverage to offset higher costs that insurance companies face under the new law — otherwise, insurance will be too expensive for everyone.

In addition, they argue that dismantling the statute would hurt the poor, and would be a first step in rolling back laws dating to the New Deal that have given the government broad authority to regulate the behavior of individuals and states.

“These lawsuits have been mounted by people whose objective is to change constitutional law,” says Simon Lazarus, public policy counsel for the National Senior Citizens Law Center, a non-profit legal and educational firm that advocates for low-income older adults. To hold that the health reform law is unconstitutional would require “massively consequential changes in the Constitution as it has been plainly understood.”

In-state disputes In some states, Republican and Democratic officials are slugging it out over their differing stands on the lawsuits.

In Washington state, for example, the state Supreme Court next month will hear a case that seeks to force the state’s Republican attorney general, Rob McKenna, to withdraw from the multistate lawsuit in Florida.

The hearing was set after the Democratic city attorney for Seattle, Pete Holmes, complained that state law prohibits McKenna from representing Washington in court without the support of the governor.

Washington’s Democratic governor, Chris Gregoire, opposes the lawsuit. McKenna, considered a frontrunner for the governor’s race in 2012, says the law is on his side.

In Iowa, Republican Brenna Findley is looking to unseat Democrat Tom Miller as attorney general, in part by vowing to join the Florida lawsuit if elected. This

week, Findley is hosting Virginia Attorney General Ken Cuccinelli at several campaign events. “Ken has led the way in fighting the federal takeover of America’s health care system,” Findley says in a message to supporters on her campaign’s Facebook page. “Don’t miss this opportunity to speak to Brenna and Ken about this important issue!!”

Miller, a seven-term incumbent, says the case is weak and that joining the lawsuit would be a waste of resources. “Above all else, an attorney general has to follow the law and do things that are consistent with the law,” he says. “You don’t go ahead and file a lawsuit because you disagree with the policy.”

Even conservatives acknowledge that Congress has broad powers under the Constitution. But they say the authority kicks in only when there is already some ongoing activity to regulate.

“The Supreme Court has never said Congress has the power to make you engage in economic activity,” such as buying insurance, says Randy Barnett, a professor of constitutional law at Georgetown University Law Center in Washington.

Medicaid costs at issue Another point of contention involves the Medicaid expansion. Many states already spend a quarter or more of their budgets on Medicaid, and some fear the cost will rise dramatically as the new law takes hold.

David Rivkin, a Washington lawyer representing the states in the Florida case, says there comes a point where cost crosses a line. By turning the states into “financial wards of the federal government,” he says, “you can vitiate state sovereignty.”

But several studies have predicted the overall cost to the states will be relatively small compared with the huge influx of federal dollars and the benefits residents will get from having insurance for the first time.

The states also do not have to accept the money, and can withdraw from Medicaid, although Rivkin and others say that’s not a realistic option, given how the public has come to depend on the program.

In Florida, Judge Roger Vinson has said that he’s leaning toward dismissing several counts in the states’ lawsuit but that he would allow “at least one count” to proceed.

States can require citizens to buy auto insurance or fire insurance for their homes — but that’s because they have broad police powers under the Constitution that Congress does not have, he says.

Vinson has scheduled a follow-up hearing for December, when he’ll give what’s left of the case a closer look. He’s expected to issue a final ruling early next year, touching off a round of appeals.

Sissel figures the auto insurance he is required to maintain under Iowa law will cover his medical bills if he gets in an accident. He’s prepared to cover other bills out of his own pocket.

Healthy and trying to start an art business, he thinks his decision is rational. “There are all sorts of tragedies that can befall us in life. We can’t spend all of our time worrying about the statistically improbable,” he says.

The states want to move the case along as quickly as possible, to capitalize on what they view as public disenchantment with the law. They hope that public concern will shade how the lawsuit is viewed by the courts. They also believe that they can get the case before the U.S. Supreme Court before major features, such as the individual mandate, become effective in 2014. They believe that helps their cause because there will be less of the law to undo.

Defenders of the individual-insurance mandate say people who don’t carry insurance impose a cost on society. If people get sick and don’t have insurance, they say, the public will have to pick up the tab.

Barnett concedes that the Supreme Court usually bends over backward to uphold laws of Congress. But if the law turns out to be highly unpopular, he thinks the high court will be open to “valid constitutional objections.”

“People not buying health insurance ...have not removed themselves from the marketplace. They have inserted themselves in the marketplace in perhaps the most aggressive way,” says Steven Schwinn, a law professor at John Marshall Law School in Chicago.

Kaiser Health News (www.kaiser healthnews.org) is an editorially independent news service and a program of the Kaiser Family Foundation, a nonpartisan health care policy organization.

Neither KFF nor KHN is affiliated with Kaiser Permanente.

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ObamaCare’s December Disaster?

Disaster could be looming for ObamaCare

by Robert Langreth

Of course, people are required to get auto and homeowners insurance all the time. It’s just that this time the federal government is doing the requiring. And that raises hackles in a country that prides itself on limited federal control.

The Obama administration had better stop listening to liberal-tomoderate academic pundit types who predict that the mandate will survive court review, and start figuring out how it will adapt ObamaCare if the health insurance mandate is struck down. Of course, the Obama administration must in public say that the mandate is essential–saying anything else would be admitting defeat before the verdict is in. But it must have a plan B for salvaging the rest of the law if and when the clause is struck down on narrow grounds.

Howard Dean’s version of what that could look like is HERE. Another way for Republicans to defeat ObamaCare even if they lose in the courts is to refuse to authorize funds 6IABAC2 IABACLorem Sit

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for its implementation, as the Economist smartly points out.

That becomes much easier to do if the Republicans win at least one chamber of Congress in November, as they appear likely to do. Here is what the Economist said: An outright repeal is impossible, as Mr Obama could simply veto any such bill. So Republicans are planning instead a strategy of “defunding” the new health law.

Even Tom Daschle, a prominent Democratic former senator, thinks this is the Republicans’ best weapon. In “Getting It Done,” a new book published this week, he declares “It would be all too easy to kill the reform effort not by repealing it, but by

starving it.” The bill will need over $100 billion in around 100 new authorisations over the next decade, all of which will require approval from Congress.

Besides that, the Republicans could attach provisions to vital bills, such as the budget, that would forbid federal workers (say, at the Internal Revenue Service) from implementing the law. Congressman Paul Ryan, an influential Republican from Wisconsin, insists that “We’ll try every angle, from defunding to budget reconciliation.”

Via the Economist, October 14, Coming back to bite him Either way, Obama should prepare for a long winter playing defense on his signature legislation.

cotocrew.wordpress.com

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federal judge in Virginia plans to rule before year end on whether ObamaCare’s mandate that people get health insurance or face a tax penalty is constitutional.

The judge’s comments seem sympathetic to the libertarian argument that the law is an unprecedented regulation of economic inactivity. A Michigan judge ruled the health insurance mandate is legal, while another court in Florida is also considering the matter. The matter is clearly destined for the Supreme Court.

Coburn: Private health insurance may end soon

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There will be no insurance industry left in three years,” Coburn told the Republican Women’s Club of Tulsa County.

“That is by design. You’re going to make insurance unaffordable for everyone -- which is what they want. Because if there’s no private insurance left, what’s left?

Government-centered, governmentrun, single-payer health care.”

Coburn apparently based his prediction on reported hikes in private insurance premiums, increases he attributed to the new law.

By RANDY KREHBIEL World Staff Writer

Some insurers say they have raised premiums because of new mandates, including requirements they cover pre-existing conditions and allow parents to keep children on their policies up to age 26.

Senate Democrats last month accused the insurers of profiteering and demanded they justify the increases.

Coburn, facing re-election on Nov. 2, said it will be “the beginning of the end of America” if the reform bill’s so-called individual mandate is not revoked or thrown out by the courts.

Sen. Tom Coburn. RIP STELL/For the Tulsa World/File Photo

“This will be a major step in the elimination of the freedom of the American people,” Coburn said.

DON’T FORGET TO VOTE ON TUESDAY, NOVEMBER 2nd! We offer the following suggestions on the ballot initiatives courtesy of the Howard Jarvis Taxpayers Political Action Committee: Prop. 20 - Extends reform of Vote YES Congressional redistricting

budget deal that raised taxes on everyone else.

California is a high-tax state. At HJTA we believe

Prop. 21 - Increases car tax Vote NO

all Californians deserve a tax cut. While we do

This measure has strong arguments on both sides; however, we found the strongest argument is that it assures local control of local funds.

Prop. 25 - Repeals the 2/3 Vote NO majority for state budget

Prop. 22 - Protects local Vote YES government funds

Prop. 23 - Protects jobs Vote YES

Prop 24 - Cancels business No position tax breaks If passed, Prop. 24 would cancel a tax break for business that was passed as part of last year’s

not object to cutting business taxes, we believe those who benefit should be promoting tax cuts that will lessen the burden on all state residents.

Prop. 26 - Plugs Prop. 13 Vote YES loophole Prop. 27 - Returns power of Vote NO redistricting to politicians IABAC 7 Month 00, 0000 Lorem Sit IABAC3

Trial Lawyers Sticking With Democratic Party Some plaintiffs firms are doubling their campaign giving this election

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By David Ingram The National Law Journal

rial lawyers are holding steady as one of the Democratic Party’s biggest sources of campaign contributions, providing a cushion for the party as it struggles to maintain control of Congress in the midterm elections.

Lawyers who represent plaintiffs in securities class actions, personal injury cases and consumer protection lawsuits have donated millions of dollars this election cycle to Democratic campaigns. At some law firms, they’re contributing even more to federal candidates than they did in either of the previous two election cycles, including the 2008 campaign when presidential hopefuls were after their money.

Houston-based Susman Godfrey, for example, has seen its lawyers contribute more than $523,000 to federal candidates and party committees since January 2009, according to U.S. Federal Election Commission records. The overwhelming majority went to Democrats, and the total is more than double what the firm’s lawyers gave by this point before the 2006 midterms.

Lawyers at Robbins Geller Rudman & Dowd, a San Diego-based securities class action firm, have contributed more than $314,000, up by almost half compared to the same point four years ago. Name partners Darren Robbins and Paul Geller have each given five-figure lump sums.

And at Wilmington, Del.-based Grant & Eisenhofer, lawyers can lay claim to $275,000 in donations, up about $46,000 from the presidential cycle.

Some of the firms, such as Robbins Geller, are benefiting from successful securities class actions, which can generate multibillion-dollar settlements. Others, such as Susman Godfrey, have made news recently as

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firms helping to lead litigation against Toyota Motor Corp. for allegations of sudden acceleration in its vehicles or against BP PLC for the Deepwater Horizon oil spill.

Plaintiffs firms have been Democratic stalwarts for decades, providing money at every level of government to keep their allies in office. This year, with some parts of the liberal base showing signs of apathy about the Nov. 2 elections, that support is as important as ever to the party.

“I’ve been as supportive as I have been in the past,” said H. Laddie Montague Jr., the president of Philadelphiabased Berger & Montague, where contributions are up 23 percent over a comparable period in the 2006 cycle.

Montague said President Barack Obama has been a vast improvement over President George W. Bush.

“What went before was catastrophic for the country, and in the world,” he said. “I don’t want to see a repeat of that, and I don’t find fault in what’s been done to date, as others might.”

Peter Kraus, a founding partner of Waters & Kraus in Dallas, said he’s motivated by the prolific spending of conservative nonprofits that aren’t required to disclose their donors.

Democrats, he said, are “getting outspent by outside interest groups, and they need all the help they can get from their traditional allies.”

Republicans, who often raise money from corporations that are defendants in civil suits, criticize what they say is the plaintiffs’ bar’s outsized influence.

“Their bread is buttered and buttered richly and thickly when Democrats are in charge. And when Democrats are not in charge, then tort reform becomes a real possibility,” said Darren McKinney, a spokesman for the American Tort Reform Association, a business-backed group that supports measures such as limits on jury damage awards.

Ray DeLorenzi, a spokesman for the American Association for Justice, the trial lawyers’ trade association, said in a statement that the “importance of

holding corporations accountable has never been more apparent,” because of recent examples of corporate misconduct. “When the Chamber of Commerce is spending millions of dollars on behalf of anonymous multinational corporations, it certainly serves as a motivating factor for trial attorneys to support candidates that will take on these powerful interests and ensure people can receive justice in the courtroom,” he said.

This is the first election cycle for the association’s new chief executive, Linda Lipsen, who took over in May. FIGHT OVER THE AGENDA The outcome, though, will have an impact on the American Association for Justice’s agenda. If Republicans retake Congress, plaintiffs lawyers won't have as many opportunities to push for changes to the federal pleading standard or limits on mandatory arbitration for consumers.

They would also have to play more defense against efforts by business groups and defense lawyers to limit what they see as frivolous lawsuits.

One unsuccessful proposal from the last time Republicans controlled Congress would have given judges greater leeway to sanction lawyers for improper pleadings.

Aside from legislation, the plaintiffs' bar is hoping to see one of its own join the federal bench. Motley Rice partner John McConnell Jr., a frequent campaign contributor, has been nominated for U.S. district court in Rhode Island. He faces heated opposition from Republicans and the U.S. Chamber of Commerce, in part because of his role in lead-paint litigation.

As with plaintiffs lawyers' individual giving, the American Association for Justice's own political action committee is poised to meet or exceed its past fundraising. It raised $2.5 million through Sept. 13 of this year, compared to $2.8 million for the full 2006 election cycle, according to the nonpartisan Center for Responsive Politics.

The plaintiffs' bar's impact is larger than the federal data alone suggest.

In Texas, a frequent battleground for liability issues, Steve Mostyn and his wife, Amber Anderson, of the Mostyn Law Firm have contributed more than $5 million to state Democrats and related groups, according to the Texas Ethics Commission. Similar efforts are playing out nationwide, in attorneys general races, battles to control state legislatures and other campaigns.

KEY STATES On the national level, lawyers' contributions are helping to prop up Democratic campaigns that could be key to determining control of Congress. Senate Majority Leader Harry Reid, D-Nev., counts three plaintiffs' firms among his top five contributors by employer, according to the Center for Responsive Politics: Weitz & Luxenberg of New York, Simmons Browder Gianaris Angelides & Barnerd of East Alton, Ill., and Girardi Keese of Los Angeles. The biggest donor to Florida Gov. Charlie Crist, an independent running for Senate, is plaintiffs firm Morgan & Morgan, based in Orlando, Fla. Susman Godfrey's lawyers were among the top donors to Sen. Arlen Specter, D-Pa., before he lost his primary.

President Barack Obama recently showed his appreciation. He attended a fundraiser on Aug. 9 at the Dallas home of Russell Budd, a name partner at the toxic tort firm Baron & Budd, thanking attendees for doing "so much not only to help support my campaign in 2008" but also Democrats nationwide.

Democrats' ties to lawyers have been occasional flashpoints this election.

This month, National Review Online published a photograph of a Colorado billboard that is critical of Obama and includes a rat labeled as a trial lawyer. Ron Johnson, a Republican challenging Sen. Russ Feingold, D-Wis., produced a video saying lawyers dominate the Senate and arguing that Washington needs fewer of them. Johnson is the chief executive of Pacur Inc., a plastics company.

The Insurance Agents and Brokers Association of California (IABAC) steadfastly defends insurance producer’s rights to operate freely and fairly in California by providing fair regulatory and legislative protection, as well as protection against potential abuses by any other group, company or organization. In addition, provide quality products and services that help its members compete more effectively in the state.

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You will be helping an extremely pro-active insurance producer advocacy group to defend its members – your sales force.

A high level of visibility. All IABAC sponsors will be promoted on the IABAC website, at all events, through all program books, marketing material and signage.

Goodwill among the insurance producer community. info@iabac.org

HELP US HELP YOU - BECOME A MEMBER TODAY!

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“EXCLUSIVE Update for IABAC Members”

The proposed regulations involving replacement cost estimates used in homeowners insurance quotes Attorney Robert Hogeboom, with Barger and Wolen and IABAC Counsel, provided his overview regarding expected amendments to the proposed regulations involving replacement cost estimates used in homeowners insurance quotes.

Because the amendments have not been reviewed in final form, we will provide a further update in the event there are any inconsistencies with the final version of the regulations.

1. Q: Will the Commissioner withdraw the regulations?

A: No. The Commissioner believes that if replacement cost estimates are used that they be as accurate as possible in order to avoid complaints from

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insureds who experience total losses based on under insurance estimates. The CDI has worked diligently to cure many of the objections made by IABAC and the other trades.

2. Q: What must the replacement cost estimate consist of?

A: The amendment to the regulations is an improvement and will make it much easier to issue a replacement cost estimate. The cost components in the estimates will be reduced to four which will include: the cost of rebuilding the home, architect plans, debris removal and overhead and cost. Only these four components will need to be shown in the estimate.

3. Q: What is the effect of the replacement cost estimate?

A: It is just an estimate.

It is an estimate of the reasonable approximation of what will be the cost to rebuild the home. It is not a guarantee.

4. Q: Does the cost of rebuilding the home have to include a separate itemization?

A: Only the four components. The details making up the cost of rebuilding the home do not have to be disclosed.

5. Q: What is happening in the market place now?

A: Some of the larger insurers have their own program to produce

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replacement cost estimates.

Other insurers who make available replacement costs for homeowners insurance rely on specialized vendors such as Marshall Swift to provide the estimate.

6. Q: How are estimates performed by an outside vendor on a state-wide basis?

A: For example, one of the major vendors has 150 price point areas in California.

The insurer then supplies information to the vendor and the vendor enters the data provided by the insurer on the home, area, etc. and then generates a report which is then given to the insured by the producer.

7. Q: Is the number in the report used as the final estimate?

A: Many times the insurer will include an inflation factor in the quote.

8. Q: Is a new replacement estimate required upon renewal?

A: The regulation requires that the data for the estimate must be kept current. The vendor updates its data usually monthly. If the data update changes the estimate, a new estimate should be provided upon renewal.

9. Q: When does a violation occur?

A: The estimate must list the four components. If the estimate ultimately turns out to be wrong, there is no violation if the estimate is “complete” as opposed to being accurate.

The regulation is not to place a guarantee on the accuracy of the estimate.

For accuracy, the only thing is for the insurer or producer to verify that the data is being updated on an annual basis.

10. Q: What safeguard should a producer follow?

A: If the person should represent an insurer which offers replacement cost, the insurer will provide the producer with a script on how to present the estimate. For those who do not want to offer a replacement cost estimate protection, the producer may indicate an amount to the coverage insured based on square footage or other factors.

The words used by the producer will determine whether the regulation is applicable. If the producer indicates to the insured that the amount chosen should be enough to cover the total loss then the producer and insurer are subject to the regulations. To avoid this, the producer should indicate that the amount insured is an estimate of replacement cost, but not a guarantee of replacement cost. Thus, the producer should not represent that the amount of the insurance will be enough to cover the rebuild of the home.

A producer cannot give this assurance and should indicate that he cannot tell the insured what the cost will be in the future and fully document that representation.

Landmark Proposition 103 Decision Reached

On October 6, 2010, the California Court of Appeal issued a landmark decision involving Proposition 103 insurance rate approval in MacKay v. Superior Court, B220469 & B223772.

The legal issue, as Division Three of the Second Appellate District explained, was "whether the approval of a rating factor by the DOI [Department of Insurance] precludes a civil action against the insurer challenging the use of that rating factor.”

In MacKay, the plaintiff class sued 21st Century Insurance Company asserting that its use of certain rating factors (persistency and accident verification) was illegal and therefore actionable under California's Unfair Competition Law (“UCL”), Bus. & Prof. Code § 17200.

In a unanimous decision, written by Justice Croskey, the Court held "that the statutory provisions for an administrative process . . . are the exclusive means of challenging an approved rate,” precluding a UCL action and therefore ordered the trial court to enter judgment for 21st Century.

Prior to this decision, previous decisions had created uncertainty as to whether insurers, having fully complied with the requirements of Proposition 103 rate approval, could charge approved rates free from subsequent civil challenges.

While Walker v. Allstate Indemnity Co, 77 Cal.

App. 4th 750 (2000) held that approved rates could not thereafter be civilly challenged, Donabedian v.

Mercury Ins. Co., 116 Cal. App. 4th 968 (2004) created confusion on this issue.

The MacKay decision resolves all prior confusion in declaring that approved rates and rating factors cannot thereafter be civilly challenged.

Nov 09, 2010

21st Century Insurance Company was represented in this action by Kent R. Keller, Steven H. Weinstein, Marina M. Karvelas and Peter Sindhuphak of Barger & Wolen.

Barger & Wolen Sponsoring 14th Annual Insurance Forum in Chicago

B

arger & Wolen is proud to join JVP Partners in sponsoring the 14th Annual Insurance Forum on November 9th, 2010 in Chicago.

This complimentary event is open to all.

The Forum is a nonprofit event presented by the Insurance Forum Committee, chaired by Kenneth M. Weine. The Forum is an executive level program designed for insurance and risk management professionals, accountants, attorneys, corporate officers, and regulators.

There is no attendance fee.

The format consists of roundtable discussions, lectures and interactive presentations.

The Speakers will analyze the effect of recent major events, emerging issues, and new regulation. Issues covered will include the Federal

Election & how it will affect State and Federal Insurance Regulation, International Regulatory Impact on the US, Economic/Recessionary Influences on the Market, and new Trends and the challenges they present.

“In addition, Robert Hogeboom, Senior Regulatory Counsel for Barger & Wolen and legal counsel for IABAC, and other firm partners will provide a California Insurance Law update the day before the Insurance Forum. For information on these events, contact Robert Hogeboom at (213) 614-7304.”

Continuing Education credit is available for attorneys, AIRs, CPAs, CFEs, CIRs and other insurance designations. (Certain restrictions apply, so please verify that your designation is approved in the

state(s) you require).

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Success quotes “The secret of success is to know something nobody else knows.”

Aristotle Onassis

Join IABAC Today!

IABAC- A Real Advocate for Our Industry MEMBERSHIP APPLICATION

NOTES • We reserve the right to adjust dues pending a review of Department of Insurance records.

• The first year dues shall be waived for any member providing seed money to sponsor the association.

• Membership will automatically renew each year, unless member provides IABAC office with at least a two week advance written notice of cancellation. Members will be notified 30 days in advance of renewal.

• Membership rosters may be made available upon request to full members; or to associate members for a fee, unless the member opts to not be included in the member directory.

• A member may not transfer membership to another entity. In the event of a sale or change in ownership, a new membership application must be submitted.

• Membership dues payments are fully earned upon receipt by the IABAC. No short-term refunds will be provided.

• The IABAC reserves the right to refuse membership to any applicant for just cause.

• • • •

Joe Jimenez, President Scott Moon, Vice President Phil Munguia- Treasurer Robert W. Hogeboom, Esq., Legal Counsel, Barger & Wolen LLP.

13211 Garden Grove Blvd., Suite 100 - Garden Grove, CA 92843 - Tel. 1-800-998-4022 Fax. 714-467-3538, www.iabac.org The Insurance Agents and Brokers Association of California (IABAC) aggressively defends insurance producers’ rights to operate freely and fairly in California by providing effective regulatory, legislative and legal representation, as well as protection against potential abuses by any other group, company or organization.

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