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Amwest Sur. Ins. Co. v. Wilson

Supreme Court of California

December 14, 1995, Decided

No. S037405.

Opinion

 [*1247]  [**1114]  [***14]    GEORGE, J. 

] In 1988, the voters approved Proposition 103, an initiative measure entitled the Insurance Rate Reduction and Reform Act. Among other provisions affecting certain types of insurance, Proposition 103 imposed a rate rollback and required that any subsequent rate increase, prior to its use, be approved by the Insurance Commissioner. Section 8(b) of Proposition 103 provides: "The provisions of this act shall not be amended by the Legislature except to further its purposes …." (Stats. 1988, p. A-290.)

] In 1990, the Legislature [****3]  enacted Insurance Code section 1861.135, 1 which exempts surety insurance from the rate rollback and rate approval provisions of Proposition 103. For the reasons that follow, we hold that section 1861.135 is invalid because it does not further the purposes of Proposition 103.

We also hold that the decision of the Court of Appeal in this case did not satisfy the requirement of article VI, section 14, of the California Constitution that decisions of the Supreme Court and the Courts of Appeal be in writing "with reasons stated," because the opinion announcing the judgment reflects the views of only the authoring justice. The only other justice who  [*1248]  concurred in the judgment simply "concurred in the result," and did not state her reasons for doing so.

On November 8, 1988, the voters enacted the initiative measure designated Proposition 103 that, among other provisions, added article 10, entitled Reduction [****4]  and Control of Insurance Rates, to chapter 9 of part 2, division 1, of the Insurance Code. (§ 1861.01 et seq.) The provisions of chapter 9 "apply to all insurance on risks or on operations in this state," with the exception of certain specified types of insurance. (§ 1851.) As discussed more fully below, surety insurance is not included among the exceptions specified in section 1851 and, therefore, is regulated by chapter 9. In adding article 10 to chapter 9, Proposition 103 provided to the same effect: "This article shall apply to all insurance on risks or on operations in this state, except those listed in Section 1851." (§ 1861.13.)

Section 1861.01, subdivision (a), of article 10 imposes a rollback of the rates (for all insurance regulated by chapter 9) to at least 20 percent less than the rate in effect one  [***15]  year prior to the enactment of Proposition 103. Subdivision (b) of section 1861.01 provides that, during the first year following the enactment of Proposition 103, these reduced rates could be increased only if the Insurance Commissioner found, after a hearing, that the insurer was "substantially threatened with insolvency." 2 Subdivision (c) of section 1861.01 [****5]  provides that, commencing one year after the enactment of Proposition 103, "insurance rates subject to this chapter must be approved by the commissioner prior to their use." 3 

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11 Cal. 4th 1243 *; 906 P.2d 1112 **; 48 Cal. Rptr. 2d 12 ***; 1995 Cal. LEXIS 6802 ****; 95 Daily Journal DAR 16625; 95 Cal. Daily Op. Service 9590

AMWEST SURETY INSURANCE COMPANY, Plaintiff and Respondent, v. PETE WILSON, as Governor, etc., et al., Defendants and Respondents; CHARLES QUACKENBUSH, as Commissioner, etc., Defendant and Appellant; VOTER REVOLT, Intervener and Appellant.

Prior History:  [****1]  Superior Court of Los Angeles County, No. C704879, Dzintra I. Janavs, Judge.

Disposition: The judgment of the Court of Appeal is affirmed.

CORE TERMS

surety insurance, initiative, purposes, rates, subdivision, voters, provisions, exempting, regulated, insurer, rollback, concurred, sections, invalid, amend, insurance commissioner, unfair discrimination, enacting, approve, statement of reasons, court of appeals, insurance rate, decision of the court, present case, rate change, constitutional amendment, administrative burden, voter approval, statewide, permits

Business & Corporate Compliance, Industry Practices, Rate Regulation, Approval Process, Governments, Legislation, Initiative & Referendum, Insurance Law, General Overview, Business Insurance, Fidelity Insurance, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection, Amendment Process, Interpretation, Enactment, State & Territorial Governments, Elections, Hearings & Orders, Judicial Review, Standards of Review