Shaping Up for No-Fault

Learning, perhaps, from its defeat at the California polls last year, a spokesman for the insurance industry now talks about pressing for a new auto insurance initiative that would enhance Proposition 103 rather than water it down.

The idea was floated this week by Allstate Insurance Co. President Raymond H. Kiefer in an interview with The Times. He granted the interview to clarify the controversial remarks of an Allstate official last month at state Insurance Commission hearings to plan implementation of Proposition 103. The remarks sounded like a warning that Allstate, third largest auto insurer in California, would get around the new law.

Kiefer said that his company actually is prepared to accept the rate regulation system included in Proposition 103. But to fully help consumers, he insists that a new approach must include some version of the no-fault system that industry leaders have been promoting for years. State voters soundly rejected a no-fault plan in last year’s election by defeating Proposition 104, an initiative written by the insurance industry. But Kiefer said Allstate is now willing to cooperate with consumer advocates on a new no-fault initiative for the 1990 state ballot. Presumably, it would be more acceptable to Californians because it would bolster Proposition 103’s reforms and not undermine them, as Proposition 104 intended to do.

A proper no-fault system, balancing the rights and interests of consumers with those of the insurance companies, must be part of any long-term solution to the auto insurance mess. Leaders of consumer groups should take Kiefer up on the offer to explore ways to cooperate on drafting a plan. They would be no worse off than they are now in Sacramento, where legislators and special-interest lobbyists are once again displaying their unique talent for muddying up waters that were murky enough to begin with.

This week, for example, the Assembly took a perfectly reasonable no-fault proposal by Assemblyman Patrick Johnston (D-Stockton) and combined it with a rival, even contradictory, plan by Speaker Willie Brown (D-San Francisco) that the trial lawyers prefer. The result is an unwieldy hodgepodge that looks frighteningly similar to the over-lawyered auto insurance systems that drivers in Massachusetts and New Jersey must live with. Californians do not have to put up with such sleight-of-hand from Sacramento, and if the parliamentary games continue, it is likely another initiative will be needed to complete the reforms Proposition 103 began.