STATE : Gillespie Wants Modest Rollbacks by 7 Insurors

State Insurance Commissioner Roxani Gillespie today sought $305 million in Proposition 103 rate rollbacks from seven of California’s “best and brightest” insurance companies, but said drivers shouldn’t expect much of a break.

Auto insurance rollbacks will be less than those in other types of coverage, and for some companies will be nonexistent, because auto insurance in California is operating at a loss and is being subsidized by other lines, Gillespie said at a news conference.

Although drivers insured by some companies may get modest rollbacks, the only way to cut auto insurance rates in the long run is to “reform the litigation system, get rid of the fender-benders,” said Gillespie, a former insurance executive.

By contrast, she said, homeowners have been charged relatively high rates for their liability insurance and should get sizable rollbacks.

Gillespie said she had tentatively decided to use the nationwide insurance industry’s 15-year average profit rate--an 11.2% return on equity--as the “fair rate of return” required by the state Supreme Court when it upheld most of Proposition 103 in June.

Gillespie said she has summoned seven major firms--Allstate, the California State Automobile Assn., Progressive Casualty, Safeco, State Farm Fire and Casualty, 20th Century and United Services Automobile Assn.--to her department’s first hearings in September to show why they should not be required to give immediate rollbacks totaling $305 million.