Insurers’ Adviser Outlines New Bid for Public Support

In a privately circulated memo, Clint Reilly, coordinator of the insurance industry’s losing $60-million 1988 initiative campaigns, has urged the insurers to launch a new $5-million to $10-million annual effort to push their case with the California public.

The memo, titled “Agenda 1989,” suggested that the industry hire “a well-known actor” to represent it in advertisements and create a group called the Insurance Cost Control Commission of California “to act as the gathering place for a coalition of interest groups” that would support the industry’s point of view.

Invitations to Legislators

“Representatives of the governor, (state Assembly) Speaker, (state Senate) president pro tem and chairs of both the Senate and Assembly insurance committees would be invited to join,” Reilly’s memo said of the proposed commission.

“In order for this organization to be helpful, it must be broad based, have access to industry books and data and have the ability to communicate its findings publicly. This means that it must be headed by a strong leader who is not an insurance industry executive and who can be a powerful spokesperson in the media and in the Legislature,” the memo says.

Copies of Reilly’s memo were released Tuesday at news conferences in Santa Monica and Sacramento by Harvey Rosenfield, chairman of the successful anti-industry Proposition 103 campaign, who called it a blueprint for “cynical political manipulation.”

Rosenfield was vague about how he had obtained the memo, saying only that it had arrived in the mail.

Reilly later confirmed that he had prepared “recommendations on what the industry can do in 1989.”

“These recommendations have been widely circulated inside the industry,” he said. “They are for discussion purposes only and have not been officially adopted.”

A spokesman for the Assn. of California Insurance Companies, the industry’s chief lobbying arm in Sacramento, said the memo was presented to a meeting of the Insurance Industry Initiative Campaign Committee, a steering group of insurance executives, subsequent to its preparation three weeks after the Nov. 8 election.

“No commitment has been made to spend this money,” said the spokesman, David Fountain. “No vote was taken, and there has been no action on it.”

Fountain called the memo “a pretty frank and open analysis” of why the industry’s initiatives were defeated in the election, why Proposition 103 won, and what ought to be done next.

Rosenfield and Proposition 103 political consultant Bill Zimmerman said they viewed it as chiefly an attempt by Reilly to continue to earn substantial industry fees for his services. Based on what they termed the usual consultant’s fee of 15%, they estimated that Reilly had collected $9 million in fees from the insurers in 1988.

Bad Public Image

In the memo, Reilly suggested that the insurance industry “in terms of public opinion” may be “worse off today than on Nov. 8.”

“As companies threaten to leave California or make good on previous threats, as legislators hold public hearings and flog industry executives, as the industry is publicly accused of subverting the will of the people, a picture of a callous, disorganized industry is being indelibly etched in the consciousness of California consumers,” he wrote.

As a first step in overcoming this, he suggested, the industry should “create a spokesperson” or two of them.

One, he said, could be “an industry executive at the highest level committed to a full-time program of press interviews, paid television commercials and/or print advertisements, editorial board visits, legislative lobbying, etc.”

Role for an Actor

The second, the “well-known actor,” would “become the industry’s Cliff Robertson or Dennis Weaver or Wilford Brimley--an actor whose image communicates integrity to ‘interpret’ or ‘testify’ in behalf of the industry on key questions and issues.”

“The industry’s inability to respond to events and teach consumers about itself is a communications problem of great magnitude,” Reilly remarked.

Press workshops ought to be held, Reilly wrote, for what he portrayed as a frequently hostile press, and “a series of town halls featuring prominent insurance executives under the leadership of the industry spokesperson should be held throughout the state. An independent moderator should be hired to give credibility to the event.”

Reilly’s memo said that, in the industry’s direct efforts and through the commission it would create, the aim would be to win public acceptance of “cutting out unnecessary costs from the (insurance) systems,” perhaps through adoption of a no-fault plan like the one unsuccessfully proposed in the initiative campaign.

Many Groups Targeted

Also invited to join the new commission, Reilly suggested, should be the head of the California Chamber of Commerce and the state’s AFL-CIO organization, as well as “representatives of consumer groups and public-interest organizations, law enforcement leaders, staff directors of the California Taxpayers Assn., League of California Cities, Board of Supervisors Assn., etc.”

“The purpose of this organization would be to build consensus for fundamental reform of the auto insurance system and to build support for the industry’s legislative and political agenda,” Reilly wrote.

“We recommend that an ex-legislator or well-known individual with credibility be hired to manage the commission. The potential for the executive director and members of the commission to give the third-party testimony in behalf of the industry’s agenda will necessitate that it be given a measure of independence,” he added.

In his analysis of why Proposition 103 had won, Reilly both understated its margin of victory, saying it was only 150,000 votes, when it won by more than 200,000, and the amount of money the industry had spent on campaigning for its own initiatives and against Propositions 100 and 103. He said this figure was $30 million, when it was more than $60 million.