Aug 02, 2020
Opinion: Legislators scheming with insurance companies to raise rates
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State lawmakers are preparing a gift for you: a massive increase in the premiums you pay to insure your home and property.
While most Californians have been in lockdown, lobbyists for the insurance industry have been in Sacramento working hard to overturn protections California voters passed in 1988 against insurance price-gouging and discrimination.
Proposition 103 required insurance companies that want to raise their rates to open their financial records for public scrutiny and justify their requests. The initiative prevented insurance companies from padding their premiums with inflated expenses. And it barred inequitable underwriting practices that penalize the communities that can least afford it.
Assembly Bill 2167, authored by Tom Daly, D-Anaheim, would repeal those safeguards. It would allow insurance companies to charge as much as they want for homeowners and renters insurance wherever they say homes and apartments are at higher risk of wildfire. It would strip the elected state insurance commissioner of the power voters gave him to prevent insurance companies from non-renewing neighborhoods.
Insurers would be able to hide arbitrary rate-setting algorithms and other financial shenanigans from the public. Homeowners’ insurance rates would immediately go up 40% or more if AB 2167 passes, according to an independent analysis.
The bill rocketed through the Assembly in June. This week, the California Senate Insurance Committee will consider it.
The insurance industry is cynically using one crisis — the coronavirus pandemic — to sneak through a bill that pretends to address another crisis — the insurers’ refusal to sell coverage to communities that have been hit by wildfires. The insurance companies promise that if they can charge as much as they want, they will resume selling insurance in those stricken regions. But nothing in the fine print requires an insurance company to do so.
In any case, if insurance rates are deregulated, most people would be unable to afford to purchase coverage at all. AB 2167 is a no-lose deal for the insurance industry: higher rates, with no obligation to sell insurance to people who must buy it to keep their homes.
Maybe you’re wondering how politicians can overturn a ballot initiative approved by voters. Actually, they can’t. The California Constitution and Proposition 103 forbid the Legislature from hostile amendments like AB 2167.
But the insurance industry has given over $32.5 million to state lawmakers since 2009, including $161,686 to Sen. Steve Glazer, D-Orinda, a member of the committee that will hear the bill this week. And AB 2167 would allow insurers to include their campaign contributions and lobbying expenses in the price of insurance coverage.
We’ll see if that’s enough for lawmakers to defy the Constitution — and leave it to the courts to invalidate the amendment years later. They’ve tried that gambit three times with Proposition 103 over the last three decades; each time the courts, including the state Supreme Court in one case, have blocked them.
Do politicians think that, with everything else happening, the voters won’t notice this betrayal? Eventually, the bills will roll in, just as they did when lawmakers deregulated utility rates in 1998. That fiasco cost California consumers $71 billion — and many lawmakers their jobs.
But things have changed since then. Since its passage, Proposition 103 has saved Californians hundreds of billions of dollars on their insurance premiums, according to independent studies. These days, the public’s demand for fairness and justice is stronger — and being heard more clearly by elected officials.
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Harvey Rosenfield is the author of Proposition 103 and the founder of Consumer Watchdog.
News Source: mercurynews.com
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TikTok : the fate of the app is important to Wall Street .
TikTok will have a few weeks to find US buyer 1:32
(. Business) – What happens to TikTok is not just an issue for millions of American users.
The application of short-form videos, the latest high point in tensions between the United States and China, is also of interest to investors. As the geopolitical conflict between the world’s two largest economies intensifies, the fate of TikTok will send an important signal to companies trying to discover what the consequences of a less globalized world will be.
What’s happening: Microsoft says it is still discussing the possible purchase of TikTok, days after President Donald Trump claimed he would ban the popular app from operating in the United States, my . Business colleague Clare Duffy reported.
In a blog post Sunday, Microsoft said its chief executive Satya Nadella spoke to Trump about buying the app, which is owned by Chinese startup ByteDance. US policymakers have expressed concern for the application for weeks, and many say it could pose a risk to national security.
“(Microsoft) agrees to acquire TikTok subject to a full security review and to provide the appropriate economic benefits to the United States, including the United States (Department of) Treasury,” the company said, adding that “it will move quickly.” to speak to ByteDance “in a matter of weeks.”
The post suggests that TikTok could avoid the ban Trump threatened with on Friday night, when he said he could use emergency economic powers or a decree to block the app’s operation in the United States.
Microsoft would own and operate TikTok services in the country, as well as in Canada, Australia and New Zealand. The company’s shares increased more than 4% in the first operations of the stock market.
The fight behind the popularity of TikTok 1:33
But the future of the application is not yet certain. Trump’s position on TikTok is not closed, while the South China Morning Post reported over the weekend that ByteDance may prefer to separate TikTok rather than sell it. British tabloid The Sun reported Monday that ByteDance plans to move its headquarters from Beijing to London.
Why it matters: TikTok decisions matter to other tech stars in China, like Tencent’s WeChat. United States Secretary of State Mike Pompeo said Trump must “take action in the coming days” regarding Chinese applications.
The situation also highlights the increasingly complicated world that global companies have to navigate as the relationship between Washington and Beijing deteriorates.
Noel Quinn, CEO of global bank HSBC, said Monday: “Current tensions between China and the United States inevitably create challenging situations for an organization with HSBC’s footprint.”7-Eleven owner wins $ 21 billion deal for service stations
Marathon Petroleum is selling the Speedway service station chain to the Japanese owner of 7-Eleven for $ 21 billion, giving the oil company a cash injection as oil prices remain depressed.
What will be the value of oil in 2025? 0:59
Details, details: The two companies announced the deal Sunday night. It is one of the biggest acquisitions since the coronavirus pandemic hit earlier this year, reports my . Business colleague Kaori Enjoji.
Japanese retail giant Seven & i Holdings – which owns 7-Eleven, the Ito-Yokado supermarket chain and Sogo and Seibu stores – said the deal is the largest in the company’s history.
The Wall Street Journal reports that the two companies had been close to reaching an agreement earlier this year, but the talks fell apart due to covid-19.
Overview: 7-Eleven will grow its presence in the United States at a time when pandemic auto travel is expected to increase. However, Seven & i shares fell more than 5.5% on Monday as investors resisted the high price.
Shares of Marathon, which reports earnings on Monday, rose more than 8% on exchanges prior to the opening of operations.
Check this out: Marathon shares have fallen more than 36% this year in line with low demand for crude. Oil prices in the United States are struggling to stay above $ 40 a barrel while prospects remain uncertain.
That could cause the number of industry deals to grow. Last month, Berkshire Hathaway decided to buy natural gas assets from Dominion Energy in a deal worth nearly $ 10 billion, including debt, while Chevron agreed to acquire Noble Energy for $ 5 billion.The risk of keeping schools closed
While reopening schools during a pandemic poses great risks, the economic cost of keeping classrooms empty is “substantial,” according to new research by Goldman Sachs.
CDC issues new guide to reopen schools 0:39
In a note to clients on Sunday, the investment bank estimated closings in the US education sector accounted for more than two percentage points of the record annualized 32.9% contraction in the economy last quarter.
Job cuts in the industry, meanwhile, contributed to the loss of approximately 1.2 million jobs in March and April. While teacher employment has returned to pre-pandemic levels, recovery has been much slower for less-skilled workers, such as lunchroom and cleaning staff.
Continuing the closings could also cause large numbers of Americans to leave work to care for children left at home, according to Goldman. Approximately 30% of the pre-pandemic workforce had children at home, the bank estimated.
Still, strategists David Choi and Joseph Briggs acknowledged that opening schools in some states could be even more damaging, causing local officials to navigate a complex matrix of decisions.
“While there are large costs for closing schools, many states remain at very high levels of new (coronavirus) cases per day, and these states face a much higher risk if schools are reopened early,” they said.What’s coming
Hyatt and Virgin Galactic report earnings after closing of US markets. Disney’s results come tomorrow.