HomeMy WebLinkAboutResolution - City Council - 79-123 - 1979-03-27Finance M Risk Mgnint
City Attorney
RESOLUTION NO. 7 9 --12 3 ,
A JMSOLUTION OF THE COUNCIL of THE CITY OF
FRESNO, CALIFORNIA., REGARDING TERRITORIAL
INSURANCE RATES.
AREAS, the cost of automobile insurance has escalated sharply in
recent years, approximately`56a during the years 1975 through 1978; and
M ER S, this increase has resulted in much public concern and
efforts by public officials and others to contain or reduce the increased
costs; and
WHEREAS, 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 as rating
territories; and
WHEREAS, the California Legislature is considering legislation
to prohibit the practice of charging varying rates by territory; and
WHEREAS, the California Legislature has requested the Department of
Insurance to study territorial rating practices of insurers and report
its recommendations to the Legislature by July 1, 1979; an
WHEREAS, the Department of Insurance has requested comments 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 Fresno has concluded that
abolishing territories will not reduce the overall cost of insurance to
motorists, but will merely result in a reallocation of costs for higher
rated territories to lower rated territories creating a subsidy by one
group of insureds for another; and
WHEREAS, data provided by asurers indicates that residents of Fresno
are in a lower rated territory and would be burdened with higher premiums
for automobile insurance should territories be abolished and a state-wide
average rate substituted therefor; and
EFFECTIVE ...`..�
WEREAS, data received from some insurers indicates that a. typical
insured residing in rural Fresno would have a premium increase of approximately
17%, and insureds residing in the metropolitan area of Fresno would have
premium increases of approximatelya by such action, and
WBEREAs, a 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 TBEREFORE, 13E IT RESOLVED that the. Council of the City of Fresno,
urges the Department of Insurance to recommend to the Legislature that the
procedures of maintaining loss data and for allocating costs among its
insureds heretofore adopted by the Department and incorporated into its
Bulletin No, 78-5 be followed by all automobile insurers to insure that an
equitable territorial rating system be maintained.; and
BE IT FURTHER RESOLVED that a copy of this Resolution be provided
to Insurance CoimiissionerKesleyyJ. Kinder for inclusion in the hearing
record and to Assemblymen Lehman and Costa, and to Senator Wich for their
information,
CLERK'S CERTIFICATION
STATE OF CALIFORNIA)
CtJilNrY OF FRESNO ss
CITY OF FRESNt
I, Jacqueline L. Ryle, Clerk of the City of Fresno, certify that the
foregoing resolution was adapted by the Council of the City of Fresno,
California at 'a reg}alar meeting held on the 2 7 t h day of M a r C h ,
1979.
JACQUELINE L. RYLE
City Clerk
CAC
/23f 7