Attorney General No.

SA87RF0044

Secretary of State No.

445

Description

MOTOR VEHICLE ACCIDENT CLAIMS AND INSURANCE RATES. INITIATIVE STATUTE. For accidents occurring from November 9, 1988 to December 31, 1992, limits motor vehicle accident claims for non-economic losses such as pain and suffering to 25 percent of economic losses; prohibits contingent fees greater than 25 percent of economic losses. Limitations not applicable to survival, wrongful death actions or actions involving serious and permanent injuries and/or disfigurement. Sets maximum rates for vehicle bodily injury and uninsured motorist insurance at 50% of insurer's premium in effect October 31, 1988 or rates of October 31, 1987, adjusted for inflation, whichever is lower. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown effect on state revenues derived from the gross premiums tax paid by insurance companies. Fiscal effect depends on how insurance companies and consumers react to the measure's rate reductions. If supply and demand stay the same, it is estimated that state general fund revenues from the gross premiums tax could be reduced by about $70 million in 1988-89 (partial year) and $120 million in 1989-90 (first full year). If insurance companies increase other rates to compensate for the rate reductions, the revenue loss could be less. Also, the adoption would increase state administrative costs by about $2 million in the first year and about $1 million annually thereafter. Such administrative costs will be paid for by fees and assessments on the insurance industry. State and local court costs may be reduced by unknown amounts by the measure's specified limitations on legal actions. SMALL CLAIMS COURT. INITIATIVE STATUTE. Increases the maximum amount which may be claimed in small claims court from $1,500 to $10,000. Also increases the maximum amount claimable after default in rent for certain residential property from $1,500 to $10,000. Deletes provisions relating to the small claims court's existing jurisdiction to enforce payment of certain delinquent unsecured personal property taxes and to issue the writ of possession. Requires proceeds from certain increased filing fees to be used exclusively for providing individual assistance advisory services to small claim litigants. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: The net fiscal effect of raising the monetary limit on the courts is unknown because of uncertainties over the extent to which the added costs of increased filings in small claims courts will be offset by the savings of decreased filings in the municipal and justice courts. It also would result in an unknown net loss of revenue to the state and an unknown increase in revenues to counties primarily due to changes in the amount of filing fees that will be generated and the dedication of filing fees for the specific local program of providing small claims advisory services.

Proponents

Honorable Richard Polanco Assemblyman, State Capitol, Sacramento, California 95814 (916) 445-7587

Date

2-18-1988

Document Type

Initiative

Qualified

Failed to Qualify

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