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Assembly Bill Would Boost State Oversite Of Disability Insurers

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Aired 4/12/10

A bill that would increase state oversight over disability insurers has passed its first test in the California Assembly. The measure would prevent insurance companies from being the sole authority on whether or not a person is disabled.

— A bill, AB 1868, that would increase state oversight over disability insurers has passed its first test in the California Assembly. The measure would prevent insurance companies from being the sole authority on whether or not a person is disabled.

Disability policies usually give insurers and their doctors the final word on eligibility for benefits. That so-called discretionary authority is standard in the industry.

Critics say that puts too much power in the hands of insurance companies. They say consumers are at a distinct disadvantage when it comes to appealing denials of claims.

The pending bill would prohibit insurers from having that discretionary authority. It would require state regulators to reject policies that include such clauses.

Insurers complain the measure would undermine their ability to decide whether claims are legitimate.

The Assembly Insurance Committee approved the bill last week. The Appropriations Committee will consider it next.

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