Rubio Bill Targeting Illegal Car Extended Warranty Robo-Calls Signed by Gov. Newsom

SACRAMENTO, CA — A consumer protection bill by Senator Susan Rubio (D-Baldwin Park), sponsored by Insurance Commissioner Ricardo Lara, that would help victims of insurance scams, including the illegal “we are trying to reach you about your car’s extended warranty” robo-calls, has been signed by Gov. Gavin Newsom.

Senate Bill 1040 will allow the Insurance Commissioner to order restitution to consumers for illegal actions by unlicensed sellers of insurance and help victims recover their losses. It addresses common scams such as illegally telemarketed sales of automobile extended warranties to consumers and illegally collected premiums for workers’ compensation insurance from businesses, among other unscrupulous acts on unsuspecting consumers.

“My top priority as chair of the Senate Insurance Committee is to protect consumers, and insurance fraud can be disastrous for individuals and small businesses,” said Senator Rubio. “I was proud to work with Insurance Commissioner Lara on SB 1040, which will eliminate barriers that keep many from getting their money back when harmed by a fraudulent insurance sale. I want to thank Gov. Newsom for signing this bill. When a scammer targets hundreds or thousands of California consumers with the same fraud, we should make it as easy as possible for victims to be made whole."

“I want to thank Senator Rubio for her tremendous partnership and leadership in authoring SB 1040, a bill that I proudly sponsored to help victims of illegal insurance fraud recover and get back on their feet,” said Insurance Commissioner Lara. “With Governor Newsom’s signing of this new consumer protection law, I look forward to ensuring that victims of unlicensed insurance scams can receive direct restitution for the losses they incurred.”

Under current law, the Department of Insurance can order unlicensed sellers of insurance to cease and desist and pay a fine of no more than $5,000 per day. But it cannot order those unlicensed sellers to repay consumers for losses that they caused, such as direct premium they misappropriated and financial losses that the consumer suffered when they believed they were otherwise covered by insurance. SB 1040 will give the Insurance Commissioner the ability to order restitution to consumers from unlicensed sellers of insurance who are breaking California laws, leading to greater repayments to consumers. The Department estimates that unlicensed activity costs Californians millions of dollars every year.

State Senator Susan Rubio represents Senate District 22. For more information, visit her website at https://sd22.senate.ca.gov/

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Media Contact: Edward Barrera, edward.barrera@sen.ca.gov