Insurance Maverick Has an Open Wallet

Harry O. Miller, the maverick insurance executive who has already put $1.9 million into supporting the Polanco auto insurance initiative on the November ballot, has declared he is ready to contribute millions of dollars more.

Miller, 56, chief executive of privately held Coastal Insurance Co., now holds views so far from most of the rest of his industry that although he remains a member of the board of directors of the insurers’ leading lobbying association, he has been asked to stop attending its strategy meetings.

Asked in an interview late last week whether he intends to make further massive contributions to pass the Polanco initiative--which has a different formula for lowering insurance rates than the no-fault system proposed by the industry mainstream--he replied without hesitation: “Yes. We’d be prepared to put in another $3 million.”

The Polanco initiative--Proposition 101 on the November ballot--mandates a 50% rollback in the bodily injury liability portion of auto insurance premiums in exchange for restrictions on collections by victims of damages for pain and suffering incurred in accidents.

Miller said that he thinks neither the no-fault initiative, Proposition 104, nor the initiative to slash lawyers’ contingency fees, Proposition 106, supported by most of the state’s insurance companies, “represent sound public policy.”

(Under no-fault, policyholders collect damages from their own insurers regardless who is at fault in accidents.)

Neither initiative, he contended, would benefit the industry in the long run, because the public would soon become disillusioned by the results. By contrast, he said, the Polanco initiative will deliver the cuts it promises until its applicability ends in 1992.

“All evidence is that no-fault increases insurance costs, not controls them,” he said. “And this particular no-fault package is really anti-public and mean-spirited.”

A spokesman for the no-fault campaign responded Monday that Miller is completely wrong about no-fault and pointed out that in addition to running a large insurance company, Miller also is an attorney. The spokesman, Scott Carpenter, charged that Miller comes at no-fault more from the perspective of a lawyer than an insurer. He said it will save consumers money.

But, Miller said, “I don’t want the industry to put us in a position where they say they’re solving the problem of high insurance rates when later it will turn out not to be so.”

As for the initiative to slash lawyers’ contingency fees to 25% of the first $50,000 of an award, 15% of the next $50,000 and 10% of any amount in excess of $100,000, Miller declared, “It sets the fees too low--so low that it will bar public access to the courts.

“They (the other insurers) put it in with the goal of terrorizing the lawyers” in expected negotiations last spring to avert putting initiatives on the ballot, he said. “I attended the meeting at which it was discussed, and when the negotiations failed, I was surprised they went through with it.”

Opposes Trial Lawyers

Miller also was critical of trial lawyers’ positions in the insurance initiative battle and made it plain that he opposes both Proposition 100, the initiative the trial lawyers support, and Proposition 103, another initiative backed by consumer advocate Ralph Nader. The trial lawyers strongly oppose the Polanco initiative.

Miller, however, spent most of his time assailing the insurers’ no-fault and contingency fee proposals, making only passing references to the trial lawyers.

Carpenter responded to Miller’s comments by saying, “He’s a lawyer, and no-fault doesn’t just hurt trial lawyers, it hurts all lawyers, because we don’t pay our side (the defense lawyers) either.”

As for the contingency fee issue, Carpenter said, “Lawyers tend not to like contingency fee limitations.”

Miller, however, insisted that he is against both sides in the insurer-trial lawyer fight.

“The whole auto insurance business is devoted now to seeing to it that two groups--the insurers and the trial lawyers--split up as much as possible of the state’s gross product,” he said.

“I think the public is really indignant and rightly so. There would have been (legislative) adjustments long ago in this system, except for the complete arrogance of the insurance industry and the trial lawyers. They think they own Sacramento.”