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Campaign Spending by Insurance Firms Nearly Triple State Record

Times Staff Writer

The insurance industry’s initiative campaign reported Friday that through Sept. 30 it had raised $35,057,783 and spent $33,661,299 to promote Propositions 104 and 106 and to defeat Propositions 100 and 103 on the Nov. 8 ballot.

The amounts reported already are nearly three times the record sum spent previously in any California political campaign. Given past spending patterns in other elections, it appeared possible that the industry’s total spending by the end would exceed the $43 million projected earlier by the industry campaign.

A campaign spokesman, questioned on this point Friday, first said that expenditures by insurance companies on their own mailings and promotional efforts were not included in the $43-million estimate. Those already total about $4.2 million.

However, an hour later the spokesman said he had checked further and the company efforts were included in the $43 million. He said the industry does not expect that more than $43 million will be spent.

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Proposition 101 Funds

Meanwhile, campaigners for Proposition 101, the insurance initiative supported by a dissident insurer, Harry O. Miller, chief executive of Coastal Insurance Co., reported that through Sept. 30, that campaign had raised $3,873,404 and spent $3,705,211. Of the total contributions, $3,725,552, or more than 96%, came from two Miller-controlled companies.

On Thursday, the Proposition 100 campaign reported raising $9,665,765 and spending $9,422,542, and the Proposition 103 campaign, deeply in debt, reported raising $1,568,608 and spending $2,213,311.

At least 71%, or $6,850,830, of the reported contributions to Proposition 100 came from the political action committee of the California Trial Lawyers Assn., individual lawyers and law firms. Most of the contributions to Proposition 103, the initiative supported by consumer advocate Ralph Nader, came from individual consumer contributors.

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Of the contributions reported Friday to the mainline insurance industry campaign for Propositions 104 and 106, virtually all came from insurance companies and industry trade associations.

Leading the way was the state’s largest auto insurance seller, State Farm, which made direct gifts to the campaign of $2,741,043 and spent $1,101,917 more on its own company promotional efforts, mainly mail and phone banks.

The Farmers group of companies gave $2,704,993 directly to the campaign and spent $174,519 on its own efforts. Allstate gave $2,311,096 to the campaign and spent $436,636 on its own efforts.

Overall contributions from other companies, including both direct contributions and their own promotional efforts, included: Aetna, $1,125,757; Chubb Corp., $852,911, Continental Insurance, $680,224; Fireman’s Fund, $1,748,961; Industrial Indemnity, $1,325,882; Cigna, $1,391,541; the Insurance Information Institute, $914,666; Transamerica, $724,608; Travelers, $897,296; United Services Automobile Assn., $1,012,459; Automobile Club of Southern California, $570,665, and 20th Century, $684,944.

Despite the heavy spending, polls have indicated that the industry is not making much headway with Proposition 104, its main initiative to create a no-fault auto insurance system, and there were reports Friday that it has begun to pull back some of its television commercials supporting no-fault and to substitute commercials against Proposition 100 and Proposition 103.

KRON-TV in San Francisco, for example, said that through the next two weeks it had been instructed to stop running almost all pro-104 ads prepared by the insurers and to substitute anti-100 and anti-103 ads.

Industry spokesman Scott Carpenter acknowledged that some pro-104 ads had been pulled around the state, but said they would resume later.

However, two representatives of the Proposition 100 campaign contended Friday that the changes in commercials mean that the insurers have despaired of passing Proposition 104 and are now simply trying to kill off the two conflicting initiatives, both of which call for broad rate rollbacks and future rate regulation.

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Nader suggested Friday that the insurers may not even be able to defeat the initiatives they do not like.

“I think the more they have to pour financial resources in to this, the more they are realizing their message is not credible,” Nader said. “What we’ve been seeing is an insurance industry believing that massive repetition of its message can substitute for the clear-eyed truth, and the feedback they’re getting is that it’s not working with the people of California.”


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