Sacramento Sabotage

Gov. George Deukmejian’s distaste for insurance reform was manifest even before the Nov. 8 election, when he urged California voters to reject all five insurance propositions on the ballot. The voters ignored his advice and passed the Ralph Nader-backed Proposition 103. But now the governor and his Administration are doing their best to delay the implementation of the initiative, to deny the state Insurance Department the funds required for its new mission and to thwart the will of the electorate.

Deukmejian has told the California Supreme Court, which is considering the constitutionality of the rate-rollback provisions of 103, that he must remain neutral on those issues. That position flatly contradicts the habits of his predecessors as well as his own previous stance that the courts have no business tampering with voter-passed initiatives; governors are charged by the Constitution with enforcing all laws, even those that they dislike. But, practically, his studied neutrality may not matter, because Atty. Gen. John K. Van de Kamp--who also initially opposed the Nader initiative--has mounted on behalf of the state government a thoughtful, well-argued defense of the rollbacks.

More troubling is the accumulating evidence that Deukmejian is far from neutral on 103. Two months ago, Insurance Commissioner Roxani Gillespie told Times staff writer Kenneth Reich that eventually she would need 300 new employees and a budget increase of $18 million to enforce the Nader initiative. In his new budget, however, the governor has proposed nine new employees and an additional $861,000 for the Insurance Department, making it difficult for Gillespie to begin drafting the regulations and setting up the regulatory system authorized by the voters.

The governor has promised more staff members and a bigger budget if the rate rollbacks survive Supreme Court review, but he overlooks the need for the Insurance Department to move now on key provisions of 103 unaffected by the constitutional challenge. The department should be promulgating regulations on the clauses allowing insurance agents to offer rebates and discounts to their customers and on those restricting policy cancellations and non-renewals--all matters of urgent dollars-and-cents concern to consumers. And, if the rollbacks are preserved by the justices, the department should be ready, instantaneously, with procedures and staff members to handle the petitions expected from some insurers seeking exemptions on hardship grounds.

To Gillespie’s credit, she has taken one step to make automobile insurance more competitive by ruling that Proposition 103 repealed all the state laws that barred banks from selling insurance. That move, fiercely opposed by the state’s largest association of insurance agents, signals the banks that they can jump into the insurance business. But on other matters she has taken her lead from Deukmejian and dragged her feet. Whatever happened, for example, to her promise to hold a public hearing on State Farm’s decision to switch new customers to a subsidiary that charges 20% higher rates--a possible violation not only of 103 but of older statutes as well? There simply is no excuse for the inaction and the delays; what the Deukmejian Administration is doing could be construed as outright sabotage of Proposition 103.