Signatures Submitted for Insurance Initiative

Coordinators for the “Voter Revolt” insurance initiative on Wednesday announced the submission of 577,078 petition signatures to county clerks to qualify for the November ballot, but within hours insurance industry leaders sued to keep it off the ballot.

Declaring that the initiative backed by consumer advocate Ralph Nader violates a constitutional ban against dealing with more than one subject, illicitly would raise insurance company taxes and contains “hidden and deceptive” anti-consumer provisions, the insurers asked a state Court of Appeal in Los Angeles to rule it null and void.

The suit charged that in repealing certain provisions of the state insurance code, the initiative would be “legalizing kickbacks by auto repair shops, permitting fraud by employers with regard to workers’ compensation premiums . . . and depriving widows and orphans of lawful income earned as commissions by deceased agents.”

“Ridiculous and absurd,” was the response of initiative coordinator Harvey Rosenfield.

“They’re wasting the court’s time in a desperate effort to deny voters the right to join the Voters’ Revolt,” Rosenfield declared. “All the lawyers in the insurance industry will not be able to prevent the California public from voting on the Voter Revolt initiative.

“It’s ironic that an industry that constantly complains about the costs of lawsuits and litigation delays has chosen to use the courts as a weapon to block the public’s right to vote,” he added.

The provisions in the initiative most publicized by its proponents would roll back auto insurance and other liability rates by 20% and later give good drivers a permanent 20% discount. It also would institute state rate regulation and mandate popular election of the insurance commissioner.

Nader declared Wednesday from his Washington office that the collection of the 577,000 signatures--50,000 more than the original goal--”is a triumph for grass-roots democracy. Now it is up to the people who pay the insurance bills to transform the Voter Revolt initiative into a law that protects consumers’ pocketbooks.”

But to the insurers, the measure is anathema. Industry spokesmen have already begun suggesting that it would drive many insurance companies--which they insist are already losing money on auto insurance--out of the state, and their agitation has increased as their private polls have shown that the initiative already commands broad support.

In a wide-ranging assault Wednesday on its provisions, the Insurance Industry Initiative Campaign Committee--which is offering its own initiatives to establish a no-fault auto insurance system and slash trial lawyers’ contingency fees--charged that the Voter Revolt measure would actually raise more people’s rates than it would lower.

This is because, it argued, the Voter Revolt initiative would, in effect, do away with the territorial rating system under which inner city residents are charged more for auto coverage than rural and suburban dwellers. This, it said, would jack up rates elsewhere.

The initiative proponents pointed in response to provisions allowing continuation of territorial rating if the companies can justify it economically.

The insurers also complained that even drunk drivers would benefit from the price rollbacks and that an enormous bureaucracy would be created within the state Department of Insurance.

At a news conference Wednesday at their Santa Monica headquarters, at which boxes of signed petitions were piled up in a pyramid before being transported to the county clerks, three of the Voter Revolt staff carried two unloaded shotguns and a semi-automatic rifle as a symbol of their intent to protect the petitions from what Rosenfield suggested might be a threat from insurers.

Rosenfield, asked whether he really felt the insurers would be capable of criminal action to prevent the initiative from being filed, responded, “I don’t know. We can’t take the chance.”

The insurance industry statement issued later said the guns “graphically demonstrated (the) irresponsible, fringe nature” of the Voter Revolt campaign.

“It’s inexplicable why Voter Revolt representatives would brandish shotguns and a semi-automatic weapon in Los Angeles, an environment wracked by drive-by shootings and gang warfare,” said spokesman John Crosby.

The plaintiffs of the insurers’ suit filed Wednesday were the Zenith, State Farm and Transamerica insurance companies and Stanley R. Zax, president of the Assn. of California Insurance Companies, the industry’s chief lobby in the state. State Farm is the state’s largest auto insurance seller. Zax is also president of Zenith.