Proposed Bill Would Help Increase State Oversight of Disability Insurers
This week, the Assembly Committee on Insurance held a hearing to discuss a bill (AB 1868) that would invalidate clauses in disability insurance policies that make insurers and their affiliated physicians the sole authorityÂ toÂ determineÂ whether an individual qualifies as disabled, the Los Angeles Daily Journal reports.
The measure would require the state Insurance Commissioner to reject policies that include such clauses and remove the provisions from existing policies.
Assembly member Dave Jones (D-Sacramento), author of the bill, said the legislation aims to fix the "unfair and unequal" legal standing that policyholders have faced in their efforts to appeal disability benefit denials (George, Los Angeles Daily Journal, 4/6).
Last year, the Daily Journal conducted an investigation that found disability insurance providers frequently deny or terminate benefits to people who have limited recourse to appeal the insurers' decision.
The investigation also found that the California Department of Insurance does little to regulate the practices of disability insurers (California Healthline, 11/23/09).
Support, Opposition for Jones' Bill
The group Consumer Attorneys of California and other individual lawyers have praised AB 1868 as a necessary consumer protection.However, state and national insurance trade groups have said they will fight the legislation because it limits insurers' ability to evaluate claims (Los Angeles Daily Journal, 4/6). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.