Double Protection for Consumers in Prop. 103

Relief is on the Nov. 8 ballot in the form of Proposition 103--the voter revolt to cut insurance rates for consumers, businesses and taxpayers. It is the superior initiative for insurance buyers and deserves the vote of every Californian.

Under Proposition 103, all automobile, homeowner, business, hospital, school-district and municipal insurance rates are reduced for one year to 20% less than what was in effect last November. This immediate premium relief is equivalent to a modest refund for the past four years of insurance gouging and record profiteering.

After the one-year rollback, the initiative establishes a prudent system--one already in effect in 19 other states--under which insurance companies must open their books and justify any future rate increases. Proposition 103 also requires the insurance companies to comply with the anti-monopoly laws and compete fairly.

Further, Proposition 103 is the only initiative that provides double protection against insurance companies’ efforts to evade these reforms. The initiative requires that an insurance commissioner elected by the people approve the insurance industry’s rates and practices. Just as the voters have not been fooled by the insurance industry’s advertising barrages in this campaign, an open electoral system will ensure that a commissioner more accountable to consumers will implement Proposition 103, and that insurance issues receive regular widespread public debate.

Proposition 103 also permits the establishment of a permanent, independent, grass-roots watchdog organization to protect consumers’ insurance rights and monitor both the insurance commissioner and the industry. No longer would insurers be able to arbitrarily cancel policies, reduce coverages or base rates on classifications--for example, place of residence--that have nothing to do with a motorist’s driving record (though insurance companies will be permitted to take into account legitimate, justifiable geographic factors).

Proposition 103, with its tiny budget, is ahead in the polls because a door-to-door, word-of-mouth campaign has educated citizens far better than the $40-million spent so far on the insurance industry’s campaign. The industry’s own initiatives, Propositions 101, 104 and 106, designed to reduce consumers’ and victims’ rights and protect the insurers’ profit margins and special privileges, have received little support--and rightly so. Proposition 100, which is also trailing, simply does not go far enough to protect policyholders or tobuild permanent consumer representation.

The insurance industry will not give up, however. Between now and the election, the insurance companies are expected to spend $1 million a day on their false television advertising to divide, mislead and frighten voters. Here are some of the arguments that they are likely to use:

In an attempt to defeat contemplated reforms, some insurance companies in the past have threatened to leave states, from Delaware to Florida. After reforms were won, these companies dropped their intimidation tactic and remained to sell. Further, if the companies threaten to withdraw together, they may subject themselves to criminal prosecution by the state attorney general for concerted boycott. California is the largest and most lucrative insurance market in the nation. Few insurance companies would leave, because, if one did, others would take its place to obtain the reasonable--but not excessive--profits that Proposition 103 allows.

Nor does Proposition 103 lower rates only in Los Angeles. This allegation is part of a divide-and-conquer strategy that pits consumers in other parts of the state against consumers here. Under Proposition 103, everyone everywhere in California receives immediate premium relief; afterward, rational distinctions that reward safety will ensure that rates will be lower than they are today for all good drivers.

Finally, Proposition 103 does not permit convicted drunk drivers to obtain special discounts on their auto insurance. And if the police and the courts do their jobs, drunk drivers won’t have any license to drive at all. That’s why Candy Lightner, the founder of Mothers Against Drunk Driving, supports only Proposition 103.

Last week I toured 15 California cities, asking citizens to support Proposition 103. From the day-care center in San Diego to the ambulance company in Oakland, from the Santa Nella truck stop on Interstate 5 in the Central Valley to the parks of San Luis Obispo on the coast, I heard consumers and business people complain about the damaging effects of high insurance rates on California’s economy. Enough is enough.

Proposition 103, the superior initiative for insurance buyers, is the only insurance initiative that I’m supporting. Hundreds of thousands of citizens joined the voter revolt to put Proposition 103 on the ballot. Now it’s up to every California voter to put this initiative into law. It may be their last chance for a long while.