This case in a nutshell

At issue in this case was the validity of Sen. Bill 841, a legislative amendment to Cal. Proposition 103 (the “Insurance Rate Reduction and Reform Act”) allowing for discounts to be granted on individuals who had been prior insured.

The Legislature had authority to amend the initiative only to further the purposes of the initiative (as Prop. 103 restricted the ability of the Legislator to amend otherwise). Ergo, the core question was only if Bill 841 advance the purposes of Proposition 103.

The Supreme Court found that “[a]s enacted by the voters, one of the fundamental purposes of Proposition 103 was the elimination of discrimination against previously uninsured drivers[…]” and that, therefore, the amendment was invalid on its face.

The court also concluded that, because the Bill arrogates to the Legislature the Insurance Commissioner’s exclusive authority to adopt optional rating factors, the Bill was contrary to Proposition 103.

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