Drivers’ Age Issue Ignites Furor Over Ad by Insurers

A new insurance industry television commercial claiming that under Propositions 100 and 103 drivers over 50 would “pay the same for auto insurance as teen-age drivers” was ridiculed Tuesday by the chairmen of the two initiatives under attack. They charged that the ad contains “not a shred of truth.”

“Proposition 100 does not do this, and the insurers know it,” said Steven Miller, chairman of the Proposition 100 campaign. “It’s simply a continuation of the dishonest, deceptive campaign that the insurers have run from the earliest days.”

Harvey Rosenfield, chairman of the Proposition 103 campaign, said, “I think the ad reflects the insurers’ desire to go after the voters who are among (Ralph) Nader’s strongest supporters, people over 50 years old . . . but it is totally phony, and unlikely to change any responsible voter’s mind.”

Proposition 100 does not mention or rule out the present practice of charging inexperienced young drivers more than older ones for insurance. Proposition 103 specifically states that insurers can use “the number of years of driving experience the insured has had” as a rating criterion.

Industry Viewpoint

But an industry spokesman said that the insurers’ campaign coordinators, the Clint Reilly firm, believe the ad is justified because Proposition 100 raises the issue of criteria for setting insurance rates but does not say anything about age.

The spokesman, Scott Carpenter, said the insurance commissioner would be forced to write regulations addressing this and other factors not covered in the initiative. He said that while the commissioner was doing this, the present system under which teen-agers are charged more would lapse, and rates would be equalized for all groups.

As for Proposition 103, Carpenter said, driving experience is a subtly different concept than age, and the way the measure is worded could mean that age rating distinctions would lapse.

Atty. Gen. John K. Van de Kamp, a supporter of Proposition 100, said that the insurers’ line of attack is “baloney.”

“I think at this point they’ve given up on their own measures, and they’re trying to get everyone to vote no on all five,” Van de Kamp said. “They’ve become desperate.”

But Carpenter insisted that recent polls by the industry campaign show that the insurers’ Proposition 104, the no-fault initiative, is surging and will outrun Proposition 103 by a narrow margin and Proposition 100 by a wide margin. He said the insurers will spend $750,000 on television commercials this week in support of Proposition 104.

In other developments Tuesday in the insurance initiative battle:

- The industry campaign estimated that 26,700 jobs, including 20,000 in insurance companies, would be lost if Proposition 103 becomes law because many insurers would be forced to either go out of business or curtail their business. A spokeswoman for the 103 campaign called the estimate “scare tactics.”

- J. Robert Hunter, president of the National Insurance Consumer Organization, a backer of Proposition 100, released a study by a Connecticut insurance services firm, Conning & Company, showing that insurance executives across the country in the past 12 years have consistently named California as the state which gives the insurance industry the most “relative freedom” to operate free of regulation. Proposition 100 and 103 call for rate regulation, while the insurers are opposed to it and their Proposition 104 rules it out.

- The San Jose Mercury News reported that through Sept. 30, the Reilly firm had been paid $3.95 million in fees by the insurers, while Woodward & McDowell, the firm coordinating the trial lawyer-backed Proposition 100 campaign, had been paid $988,877. The insurers’ Sacramento law firm, Merksamer, Hodgson, Parrinello & Mueller, was paid $1.2 million, the newspaper said.

Carpenter said the figures, as related to Reilly, are misleading, because he performs his own polling and other special services for the insurers, and these have not been separated from the fees he charges.