Legislature "Suspends" Bill Triggered by Insurance Commissioner Scandal

San Francisco,CA (WorkCompAcademy) - Suspense day" at the California Legislature on Thursday saw several key bills killed while others moved ahead on the path to passage. Both the Assembly and Senate ran through more than 820 bills in anticipation of the end of the legislative year on Aug. 31. Any bill passed through Appropriations from the suspense file must survive a full Assembly vote and another Senate vote before heading to the Governor for signing.

According to the Report by Consumer Watchdog, AB 2370 (Levine) would have required all state agencies to retain public records for a minimum of two years. The bill had previously passed through the Assembly and through Senate Judicary with overwhelming bipartisan support, and without a single No vote.

 State agencies currently have no minimum time requirement to keep records, placing the public’s right to access those records at risk, said Consumer Watchdog.

AB 2370 was supported by California News Publishers Association, Californians Aware, Consumer Watchdog, First Amendment Coalition, and Oakland Privacy.

The bill arose from the government corruption scandal involving the Department of Insurance and the workers’ compensation insurer Applied Underwriters.

A second bill prompted by the scandal, AB 1783 (Levine) to require "consultants" influencing administrative actions of state agencies to register as lobbyists, was passed by the committee and now moves to the Senate Floor.

California’s landmark Public Records Act reflects the principle that government transparency is essential in a democracy. Yet, there is no minimum retention period for such records that applies to state agencies. As a result, records may be deleted or destroyed before the public or journalists are able to access them.

AB 2370 would have applied to state agencies the same minimum two-year retention period for public records that is already in place for California counties and cities.

Just this year the Department of Insurance adopted a record deletion policy that would have automatically deleted agency email after 180 days unless individual staff manually archived each email.

The email deletion policy, which was pulled back in the wake of media attention, was developed following statewide news coverage of the pay-to-play scandal involving Applied Underwriters and cloaked campaign donations to Insurance Commissioner Lara’s 2022 re-election campaign.

Failure to retain public records is a problem that reaches beyond the Department of Insurance. For example:

- - As recently reported, the chief administrative officer of a state agency testified that she routinely shredded scoring worksheets that she no longer considered "relevant," even though they were central to a contract bidding dispute.
- - CalPERS began automatically deleting email older that 60 days in 2011 after a different government scandal.
- - In 2016, CalTRANS’s 120-day auto delete email policy was determined to constitute spoilation of evidence.
- - The California Environmental Protection Agency currently considers emails transmitting "informal information" to be "transitory," and are deleted after 90 days.
- - The Medical Board destroys "physician licensing files . . . . not necessary to establish qualifications for licensure" upon the time the physician’s license is issued.
- - The DMV destroys records regarding a driver’s failure to establish insurance coverage following an accident after just 30 days.
- - The Department of Forestry destroys records regarding hazardous material (Hazmat) property upon expiration of the relevant contract regardless of the time period, and records of fire safety inspections after one year.

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