Insurance Bill Clears Hurdle in Assembly

A bill much sought by consumer advocates that would give the state Insurance Department the power to say yes or no to substantial fluctuations in insurance rates won passage in an Assembly committee Tuesday by one vote.

With Assembly Speaker Willie Brown (D-San Francisco) coming to the meeting room to lobby for passage, the Finance and Insurance Committee, after repeated roll calls, finally mustered the 11 votes necessary to approve what is called a “flex-rating” system.

Under the bill, authored by Assemblyman Lloyd G. Connelly (D-Sacramento), any insurance rate increase or decrease in California of more than 10% in personal lines or 25% in commercial lines would have to receive the prior approval of the Insurance Department.

Consumer Advocate

In addition, an Office of Insurance Consumer Advocate would be established within the department to present a public point of view on proposed rate changes. Under the bill’s original terms, the advocate would have come from the state attorney general’s office, but, to win support, Connelly amended it Tuesday to put the advocate in the Insurance Department.

This was one of two insurance bills that was the subject of comments Monday by Atty. Gen. John K. Van de Kamp at a Los Angeles press conference. Van de Kamp had expressed fears that both would be defeated this week and had said he would be “very inclined” to support an insurance initiative on the 1988 ballot if that happened.

The other bill, a measure authored by Assemblywoman Maxine Waters (D-Los Angeles) that would lift the present state anti-trust exemption applying to the insurance industry, is due to be voted on today in the Assembly Judiciary Committee.

Van de Kamp, commenting on the committee success of the flex-rating measure, said Tuesday he is “grateful” for the Assembly Speaker’s support. But he warned, “We are still a long way from getting it signed by the governor.”

That view--that Gov. George Deukmejian may be reluctant to sign such a measure--was also expressed by Assemblyman Charles M. Calderon (D-Alhambra), who provided one of the last two votes to put the bill over the top in the committee.

Calderon, who had stood silent through several calls of the roll, finally declared, “I have significant reservations about the bill, but I think the Legislature has to do something on this issue.” He then cast a yes vote and was immediately joined by the last holdout, Assemblyman Pete Chacon (D-San Diego).

2-Hour Lobbying Contest

The Calderon and Chacon votes broke a two-hour, tense lobbying contest between Brown and Clay Jackson, chief lobbyist for the insurance industry. Both quietly spoke repeatedly to wavering legislators. One of those on the fence, Assemblyman Tom Bane (D-Tarzana), never did cast a vote.

Afterward, both Jackson and the consumer advocate who had done the most to marshal support for the bill, Steven Miller, head of the Insurance Consumer Action Network, said Brown’s efforts on Tuesday had been decisive.

Miller and Connelly had worked for months to bring the Assembly Speaker to their side. But when he finally came, Brown insisted he had been there all along. He had his name added to the bill as a co-sponsor and told the committee members that he had asked Connelly to introduce it in the first place.

People who called Brown’s office in Los Angeles to support the bill were reportedly told hours before Brown appeared in the committee room that the Speaker was for it, that in fact it was his bill and that it had already cleared the committee.