R 1344
......-1. .,~ RESOlUTI ON. NO. 1344 ')
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE, SUPPORTING THE MAINTENANCE OF AN
EQUITABLE TERRITORIAL RATING SYSTEM FOR DETER-
MINING AUTOMOBILE INSURANCE RATES.
WHEREAS, the California Legislature has requested the Oepartment of Insurance study
the subject of territorial rating systems used by automobile insurers; and
WHEREAS, territorial rating is a method of differentiating automobile insurance
rates on the basis of claims loss costs, which differ from area-to-area; and
WHEREAS, the California Legislature has acted in recent years to defeat legisiation
which would abolish territorial rating and require a single rate be used by automobiJe
insurers throughout the state; and
WHEREAS, a statewide average automobile insurance rate would not reduce the overall
cost of insurance to the public, but would merely effect a reallocation of existing costs
among various geographic areas; and
WHEREAS, throughout Ca I i forn i a. imposition of an average rate would increase premiums
for two-thirds of California's motorists; and
WHEREAS, the residents of the City of Arroyo Grande would be burdened with increased
premiums as a result of abolishing territorial rating, by some insurance industry estimates,
said increase to approximate 40 percent (40%) for a typical insured motorist in this area;
aih~
WHEREAS, the Department of Insurance has invited participation in the study by cities
an': counties on behalf of their affected residents;
NOW THEREFDRE, BE IT RESOLVED, that the City Council of the City of Arroyo Grande,
hereby urges the Commissioner of Insurance to maintain, and recommend to the legislature
maintenance of, an equitable system of territorial rating by which Joss costs of automobile
insurers are allocated to those areas in which personscausing such losses reside; and
BE IT FijRTHER RESOLVED, that the City Clerk forward a copy of this resolution to
the Commissioner of Insurance for inclusion in the hearing record; and that a copy be for-
warded to Assemblywoman Carol Hallett and to Senator Robert P. Nimmo.
On the motion of Council Member de Leon, seconded by Council Member Gallagher, and
on the following roll call vote, towit:
AYES: Council Members Gallagher, de Leon, Pope, Smith and Mayor Millis.
NOES: None.
ABSENT: None.
the foregoing Resolution was passed and adopted this 13th day of February, 1979.
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