The bill would have required insurers to offer "confusing" new disclosures to consumers and would have established new restrictions on an insurer's ability to manage the growing risks of mold, according to the Washington, D.C.-based American Insurance Association.

The committee did approve two auto bills, SB 1427 and SB 1648, that insurer groups warned could encourage drivers to be underinsured and would block insurance companies' rights to invest in auto body repair shops, improve customer service and lower costs.

"It was good news for California homeowners that the mold bill was shelved this year," said Sam Sorich, senior vice president of the National Association of Independent Insurers, which lobbied against the bill.

Before mold disclosure requirements are imposed and before any coverages for mold are mandated an ongoing study of mold exposure and remediation should be completed, Mr. Sorich said.

SB 1763 would have prevented insurers from excluding mold losses when such claims are triggered by a covered peril, such as a fire or heavy water damage, Mr. Sorich explained.

It also would have created "impossible claims handling requirements," since it would have forced an insurance claims handler to make a mandated disclosure whenever mold is "likely to be present." This, he said, would be the case whenever a claim is filed since molds are present in indoor and outdoor environments.

The Alliance of American Insurers said it lobbied extensively against the passage of the bill, and that "Ortiz's unusual move of pulling it from consideration is gratifying."

Although the sponsor stated she will reintroduce the bill next year, the Downers Grove, Ill.-based Alliance said, the bill may lack the support necessary for passage "as new information is gathered and changes in the market occur." The Alliance said it would continue its strong opposition to such bills.

Mark Sektnan, American Insurance Association assistant vice president, western region said the bill had the potential to "jeopardize the entire insurance marketplace in California."

The measure, he said, "would have mandated mold coverage in all liability policies sold in California" and would have impacted businesses that buy general liability coverage, which would result "in higher rates for all California businesses."

Auto bill SB 1427 would extend the state's experimental low-cost auto insurance program and could cause an increase in the number of underinsured motorists in the state, according to the NAII.

The bill, NAII said, would change the program's eligibility criteria from 150 percent to 250 percent of the federal poverty level, while decreasing the annual premium for participants of the program from $450 to $347 in Los Angeles and from $410 to $314 in San Francisco.

Mr. Sorich said the bill "would encourage motorists to buy a lower policy with less coverage." He said the bill also would make it more difficult for injured accident victims to recover full damages.

Senate Bill 1648 would ban an insurance company from owning or investing in auto body repair shops, which NAII said "violates a constitutional right for businesses to make investments and acquire property."

The bill would require insurers that currently invest in auto body repair shops to divest their interests within eight years of the bill's effective date, and would prohibit any new insurer investments in auto body repair shops.

NAII said it will continue its opposition to SB 1427 and SB 1648.