Auto Insurance in California

Auto insurance buyers sorely need collusion insurance. The Opinion piece (“What the Public Needs Is Collusion Insurance,” by Jan Angoff and Bob Hunter, April 17) was reasonable, but incomplete. Moreover, staff writer Kenneth Reich’s contribution to the crucial statewide issue of 1988 deserves praise as a substantial contribution of information for the public interest.

California’s insurance industry remains less regulated by a toothless state Insurance Department than in any other state, while the electorate cries out for legal reform and relief from incredible auto insurance rates. Experience has shown self-regulation under the McCarron-Ferguson Act insurance industry exemption from anti-trust prosecution does not work. In view of the state Supreme Court decision requiring all drivers to have insurance, the industry must now tolerate strict public utility-type regulation.

The state insurance agency’s attitude and legal position is shown in a statement by Commissioner Roxani Gillespie, a Gov. Deukmejian appointee: “We are in the middle of a battle between two special interests,” she said. “On one side are the insurers and on the other are the trial lawyers, and it has nothing to do with consumers. We, the government, represent consumers.”

But the government has been co-opted in the Legislature by special interests--the Trial Lawyers Assn. and the Assn. of California Insurers. The state Insurance Department needs reform or abolition in favor of the Public Utilities Commission.

Consumer reform is difficult in the Legislature, since special interest money dominates and consumers contribute little percentage-wise to reelection campaigns.

We consumers have been willing victims for too long. Consumers interests are best protected by Ralph Nader-Rosenfield “voter revolt to cut insurance rates” initiative, the Polanco initiative or the Consumers Union initiative.

R. WILLIAM ROBINSON

West Covina