Robbins All but Gives Up Hope for Action on Insurance Rates

All but calling it quits on major legislative action this year to bring down auto insurance rates, the chairman of the Senate’s insurance committee blamed the lack of progress on an unwillingness to compromise on the part of interest groups, particularly insurers and trial lawyers.

“Unfortunately, the armed mercenaries of the individual interest groups prevented their cliques of supporters from compromising under the theory that their group would somehow survive the ‘ballot box battle’ (of initiatives) that will now take place on Nov. 7,” state Sen. Alan Robbins (D-Van Nuys) said.

Some Firms May Drop Out

In a letter outlining the situation to Senate President Pro Tem David A. Roberti (D-Los Angeles), Robbins added:

“It is possible that they may all be right in their predictions, but it is also possible that some of the corporations and individuals who rely on today’s auto insurance system for their livelihood will no longer be in business, at least in California, after the dust cloud settles from the battle.

“ ‘Macho’ industry and (trial lawyers) association leaders who are advocating bravado and continued fighting might wish to consider giving up some ground as a method of preserving the system,” Robbins added. “Otherwise, an angry public will chew up insurance companies, lawyers and elected officials until the underlying problem is solved.”

As many as five different initiatives may qualify for the general election ballot, he said.

“Three proposed initiatives ‘reform’, translation ‘slam,’ the trial lawyers, and leave the insurance companies relatively untouched; two ‘reform’ the insurance companies while leaving the trial bar alone,” Robbins said. “Each would reduce rates if it works , but I would be pleasantly surprised if the right combination of initiatives were to pass and then receive a judicial interpretation that created a functioning auto insurance system with lower rates than today.”

Robbins, in conjunction with the Consumers Union, had been trying to fashion a compromise measure creating a modified no-fault system the insurers would like and the rate regulation the trial lawyers want. But the talks broke down.

Challenges Report

In another development Thursday, Robbins challenged a Consumers Union study on insurer contributions to politicians that was released Monday. It had named him as the largest legislative recipient of insurer contributions over the period 1985 through 1987, at $146,499.

Robbins, however, said his own records show he received only $121,000 in such contributions during that period. And he noted that he announced March 9 of this year that he would take no more contributions from either the insurers or the trial lawyers until a legislative bill reducing auto insurance rates is enacted into law.