Nader Warns Prop. 103 Sequel Could Be Ahead

Consumer advocate Ralph Nader, breathing fire against the insurance industry, said Monday at a Costa Mesa news conference that the backers of Proposition 103 will organize another initiative drive in 1990 unless the goals of the measure are met before then.

Nader, on his first visit to California since the passage of Proposition 103, the successful insurance initiative that he supported in the November election, spoke to reporters before a county dinner that a trial lawyers’ committee and others gave in his honor.

“The insurance industry must realize that the people of California mean business,” he said, going on to express disappointment that state Insurance Commissioner Roxani Gillespie and the Legislature have not been tougher in implementing the provisions of Proposition 103.

Nader was particularly caustic about plans announced Monday by State Farm, California’s largest seller of auto insurance, to raise auto policy rates by 9.6% immediately for all customers. If the company is allowed to do that, he predicted, many other insurers will follow with “arbitrary, unjustified” rate increases.

The purpose of Monday night’s dinner at the Red Lion Inn, attended by about 800 people, was to raise what sponsors said was more than $250,000 for two causes: the Shafeek Nader Trust for the Community Interest and the Los Angeles Mission.

Nader gave a largely inspirational speech, calling for citizen action to “usher in a better life for whoever comes after us.”

He also paid tribute to Californians for overcoming the financial power of the insurance industry in passing Proposition 103.

The recently established Shafeek Nader Trust is named after Nader’s older brother, a community organizer who died of cancer at 60 in 1986. Nader said that money being raised for the trust would be used for pilot community-action projects in Winsted, Conn., Nader’s hometown, where his brother had founded a community college and done other work.

The Los Angeles Mission serves the poor and homeless with varied programs.

The chief organizer of the dinner was Claremont trial lawyer Herbert Hafif, who recruited Nader last fall for a successful, last-minute, $500,000 advertising effort to defeat the insurance industry’s Proposition 106, which would have limited trial lawyers’ contingency fees.

Hafif’s call to trial lawyers and others in the dinner announcement to come to the fund-raiser prompted insurance lobbyists to suggest last week that the affair proves that Nader is closely identified with the interests of trial lawyers in the fight over the future of the insurance system. The lawyers derive much income at present from that system.

Hafif said he was a dissident trial lawyer in the last campaign, not identified with the California Trial Lawyers Assn. and its sponsorship of Proposition 100, a less-sweeping reform initiative that competed unsuccessfully with Proposition 103.

Nonetheless, Hafif said, on some issues Nader has a “marvelous identity” with trial lawyers. Several leaders of the California Trial Lawyers Assn. were in the audience Monday night.

Nader said both he and “good” trial lawyers believe that the insurance industry ought to put much more effort into promoting driver safety and forcing the automobile industry to produce safer cars.

He noted that many people who are not trial lawyers came to Monday night’s dinner.

Nader said the opening stages of the Bush Administration did not give any cause for thinking that the new Republican President will be any more interested in consumer health and safety issues than was former President Reagan.

“It’s another 4 years for no law and order on health and safety questions,” he predicted.

State Farm raises California auto rates 9.6%. Part I, Page 1.