Robbins Whips Auto Insurance Bill Into Shape

As legislators struggle to fashion an auto insurance rate-reduction bill that can win passage before ballot initiatives are filed, prospects are that the main proposal will be a combination no-fault, rate-regulation measure sponsored by state Sen. Alan Robbins (D-Van Nuys).

Legislative leaders said Thursday that the Robbins bill also would end the insurance industry’s antitrust exemptions. Thus it would combine sacrifices by both insurers and their rivals, trial lawyers, to bring about what Robbins terms a substantial rate reduction.

Robbins, chairman of the Senate’s insurance committee, said the details are being hammered out in negotiations between representatives of the insurance industry and Consumers Union, a major consumer group. “We are close to reaching agreement,” said Judith Bell, a Consumers Union official, on Thursday.

Not directly involved in the discussions, but being kept informed of their progress, are the trial lawyers. However, J. Gary Gwilliam, president of the California Trial Lawyers Assn., said Thursday that “we are always opposed to no-fault,” a system that restricts lawsuits and allows accident victims to recover damages from their own insurance carriers, regardless of who is at fault.

Robbins said he anticipates bringing his bill before the Assembly’s insurance committee May 3 and is confident that it will clear the full Assembly just two days later.

He predicted that most of the Assembly’s 36 Republicans and many of its 44 Democrats will vote for it. The insurers will go along and, in the end, the trial lawyers will be only “equivocally” opposed, he said. Assembly Speaker Willie Brown (D-San Francisco) will be neutral, he predicted.

Robbins said he would then anticipate no problem in winning Senate approval and gaining Gov. George Deukmejian’s signature.

Lending some support to this scenario Thursday was Brown, who has backed the trial lawyers in the past but who said in an interview that he had assured Robbins in discussions this week that he will “put no roadblocks in the way” of his measure.

Brown added that he considers the prospective Robbins bill “the easiest one to move as a reform vehicle.” He called it “untainted.”

When Assemblyman Patrick Johnston (D-Stockton), chairman of the Assembly’s insurance committee, was told of Brown’s remarks, he said that if the logjam in the Assembly against an insurance compromise is broken, it could pass with an overwhelming 60 votes.

But several interested parties expressed great skepticism that any bill for meaningful overhaul of the insurance system--the Robbins package or others advanced this week by Johnston or by a coalition of Republicans and dissident Democrats at a news conference Thursday--will be able to secure a majority.

25% Rate Reduction

The package unveiled Thursday was described as mandating an across-the-board 25% rate reduction for California drivers under a no-fault system. Precise language was not disclosed and its authors were indefinite on when they would bring it to the Assembly floor.

Assemblyman Richard Polanco (D-Los Angeles), author of one of five currently proposed insurance initiatives, said: “The Legislature is deadlocked. Nothing will happen. We are going to submit (petition) signatures for our initiative the first week in May. We already have 550,000 signatures (which is more than enough to qualify for the November ballot).”

The leading insurance industry lobbyist in the state, Clay Jackson, also expressed doubt, saying that he thinks trial lawyers have the clout to kill any measure containing no-fault, and that there is no prospect of passage of any measure that does not contain no-fault.

Gwilliam, the trial lawyers president, said the kind of no-fault system Robbins intends to propose, modeled on New York state’s system, is “not fair and no solution” to correcting high auto insurance rates. It would only raise rates, he predicted.

Wait and See

However, Gwilliam qualified his opposition slightly. “We haven’t seen any details (of the Robbins proposal),” he said. “We would be very, very skeptical. We must read the fine print.”

The trial lawyers, like the insurers, have their own insurance initiative that presumably will qualify for the ballot and could be filed in May.

But proponents of a legislative solution hope that if the Legislature acts quickly and is able to cut auto rates substantially, the various initiative proponents could yet be persuaded not to submit their signatures, thus cutting short their ballot qualification efforts.