COURT REJECTS INSURERS’ BID TO BLOCK QUAKE-CLAIMS LAW

The California supreme court has refused to hear a case on the constitutionality of a new state law that gives consumers an extra year — until January 1, 2002 — to reopen claims stemming from the 1994 Northridge earthquake. Insurers had filed a petition that sought court intervention, but Ellis Horvitz, a lawyer representing the insurers in the case, admitted that it was unusual for such requests to be successful. He said that the insurers decided nonetheless that “there was a valid basis for seeking such review, so it was worth the effort”. He added that a number of options were still available to the companies, including an appeal to the US Supreme Court. Mr Horvitz said that his clients — the Association of California Insurance Cos, the Personal Insurance Federation of California and the National Association of Independent Insurers — had not yet decided whether to continue with the issue. The law was passed in reaction to the scandal surrounding former insurance commissioner Chuck Quackenbush, who reached clandestine settlements with six insurers, allowing them to make donations to non-profit foundations rather than face possible fines for mishandling Northridge claims. Meanwhile, the state bar association has exonerated department of insurance attorney Cindy Ossias of violating professional ethics for leaking documents about the settlements, contributing to Mr Quackenbush’s downfall. The bar association said that Ms Ossias’s action “advanced public policy considerations bearing on the responsibilities of the office of insurance commissioner”. Mr Quackenbush had placed Ms Ossias on administrative leave and attempted to have her dismissed.