Nader to Stump State for ‘Voter Revolt’ Car Insurance Initiative

Consumer advocate Ralph Nader said Friday that he will stump California to get a “Voter Revolt” insurance initiative on the November ballot.

Nader made his pledge after organizers said that “it’s going to be close” in obtaining the 372,178 valid signatures necessary to qualify the measure, one of five proposals vying for voters’ attention that promise relief from high insurance costs.

Nader, at a Santa Monica news conference called to release a report critical of the insurance industry for failing to pay federal income taxes on allegedly massive profits, said he will return to the state late this month to continue campaigning for the measure he favors. The deadline for submitting the signatures to county registrars of voters is May 19.

Nader added that Democratic presidential aspirant Jesse Jackson may also endorse the initiative, which calls for rollbacks of as much as 40% in auto insurance rates, regulation of insurance pricing policies by the state and official consumer representation in the rate-setting process.

‘Behave Themselves’

“There is a need for a voter revolt against the immense concentration of wealth” represented in the insurance industry, Nader said, to assure that “the insurance industry and the (state) insurance commissioner will behave themselves.”

As Nader campaigned for one measure, the manager of another being sponsored by Assemblyman Richard Polanco (D-Los Angeles) and elements of the insurance industry, claimed that their effort already has more than enough signatures to qualify.

The manager, Harvey Englander, said the initiative, which would cut bodily injury liability premiums by 50% in exchange for restrictions on policyholders’ right to sue, has obtained 460,000 signatures.

Englander said he expects to have 600,000 signatures by the submission deadline in mid-May. Generally, petition circulators try to get more signatures than required to offset the many that are usually ruled invalid--for example, signatures found not to be of registered voters.

The Voter Revolt and Polanco initiatives are two of five major insurance initiatives currently being circulated in the state for the fall ballot. None has yet qualified.

Contingency Fees

The insurance industry is directly sponsoring two others. One would institute a no-fault auto insurance system. The other would cut back the contingency fees of trial lawyers. The California Trial Lawyers Assn. and the banking lobby are sponsoring a separate measure calling for some rate regulation and, in some circumstances, premium rollbacks of 20%.

At the Nader news conference, the coordinators of the Voter Revolt initiative, Harvey Rosenfield and Bill Zimmerman, said that despite having sent out “somewhere around 2 million” petitions in the mail to California voters, they remain a little uncertain about qualifying.

Zimmerman said that filled out petitions are being mailed back at a rate fast enough to amass the signatures, but if that rate tails off, he and Rosenfield will have to raise more money to hire paid canvassers to step up the pace.

The report released Friday by Nader’s Voter Revolt organization and written by staff member Carmen Gonzalez says that 13 of 15 major automobile and property-casualty insurance companies that were surveyed paid no federal income taxes between 1982 and 1986. Each of the companies received, on the average, $304 million in tax credits from the government, the report says.

Meanwhile, the report says, the average compensation of the insurance companies’ chief executive officers, including salaries, stocks and other forms of compensation, grew by 125% and totaled $1.3 million per executive per year at the end of the same period.

Out of Date

Asked to comment, Stanley Zax, president of the Assn. of California Insurance Companies, said the tax data is already out of date because the federal tax laws were changed in 1987. Now, he said, all companies must pay a minimum tax. This amounts to a total industry tax burden of $6 billion more a year, he said.

As for the executive salaries, Zax said the average compensation in the insurance industry is less than in many other industries.

“There’s a shortage of executives in this country, and the companies that have them want to keep them, and they compensate them accordingly,” he said.

Meanwhile, it was disclosed Friday that Atty. Gen. John K. Van de Kamp has completed his work providing a legal summary for the insurance industry initiatives, allowing them to be circulated with apparently a good chance of meeting qualification deadlines.

One of them, the no-fault initiative, has been circulated for months in a slightly different form, cleared earlier by the attorney general. The industry re-drafted it after the trial lawyers sued on grounds that it unconstitutionally covered more than one subject. The trial lawyers object to it, in part, because it would cut into their income.

Zax complimented Van de Kamp, who is on the steering committee of the trial lawyers’ initiative, for being “very fair” in completing the formalities in 20 days, when he was legally empowered to take 40.