Governor, Agency May Not Use Van de Kamp in Prop. 103 Suits

Gov. George Deukmejian’s office and the state Insurance Department said Tuesday that they may use someone other than Atty. Gen. John K. Van de Kamp to represent them in answering the insurance industry’s lawsuits seeking to overturn Proposition 103.

“We are presently reviewing our legal options, including what arguments to present in our brief and who will represent the governor,” said Kevin Brett, Deukmejian’s press secretary.

Meanwhile, Fermin Ramos, chief counsel to state Insurance Commissioner Roxani Gillespie, said that before making a decision on counsel, “we want to take a long hard look at the position taken by the insurers. . . .”

“We want to see whether there are any potential conflicts between our office, the governor’s office and the attorney general’s office,” he said.

The hesitation in both the governor’s office and the Insurance Department about using Van de Kamp, who usually represents all state agencies in lawsuits naming state officials, was disclosed one day after Van de Kamp filed a brief before the state Supreme Court making it clear that he is undertaking a sweeping defense of the premium rollbacks and other provisions in Proposition 103.

By contrast, both Deukmejian and Gillespie have been more reserved in their post-election response to the measure, which won a narrow election victory.

Deukmejian said the day after the election, “We’ll certainly follow the law with respect to what ever obligations there are of our Administration,” but he also expressed concern that the initiative could cause a “significant” loss of insurance availability to the public.

Gillespie said the same day, “The people of California may rest assured that it is my intention to administer Proposition 103 according to the law.” But, she added, “it is too early to answer specific questions regarding implementation.”

Deukmejian, Gillespie, Van de Kamp and the state Board of Equalization have all been named as defendants in the lawsuits brought by the industry.

Van de Kamp’s brief Monday was filed on behalf of his own office and the state Board of Equalization.

Amid the uncertainty over who will represent Deukmejian and Gillespie, insurance industry lawyers said Tuesday they will delay by a day or two their response to Van de Kamp’s brief asking the Supreme Court to either vacate or sharply narrow the terms of its stay blocking implementation of Proposition 103.

“But we are not going to drag the thing out,” said Delia Chilgren, attorney for the Assn. of California Insurance Companies, the industry’s major lobbying arm in Sacramento. “We seek immediate court review of the case just as much as the attorney general. . . . We’re not filing opposing papers in that respect.”

Meanwhile, attorneys for the California Medical Assn. and the California Assn. of Hospitals and Health Systems urged the high court to leave in effect its order blocking implementation of the initiative and, if it decides to formally review the issue, called upon it to strike down the measure as unconstitutional.

The two groups said there were “a number of legal flaws” in Proposition 103 and that if it were allowed to go into effect, it could “seriously limit” the ability of liability insurers to continue to provide coverage to physicians and hospitals in the state.

They said that if the insurance rate rollbacks, which affect malpractice as well as auto, homeowner and commercial liability premiums, go into effect, it will “severely curtail” the ability of insurers to provide coverage. Such coverage, they said, is “absolutely essential to the continued availability of professional health and hospital care.”

In other insurance developments Tuesday:

State Sen. Alan Robbins (D-Van Nuys), chairman of the Senate’s Insurance Committee, said that all 27 insurance companies requested to appear at a hearing his committee will hold Friday on the suspension of sales by many companies since Proposition 103 passed have agreed to participate in the hearing. He said none had to be subpoenaed.

A vice president of American States Insurance Co., Mike Heywood, told a luncheon meeting of the Chartered Property and Casualty Underwriters and the National Assn. of Insurance Women that Proposition 103 is “not something that’s really going to be enforced (because) the courts and the Legislature are not going to destroy the property-casualty industry.”

Nonetheless, Heywood declared, passage of the measure was the climax of “a building crescendo of discontent in the marketplace that’s been building for many years.”

A State Farm Insurance executive, also scheduled to speak at the luncheon, bowed out because of what another State Farm official said was concern that what the scheduled speaker had to say might be construed as a violation of antitrust laws.