Governor’s Aide Says Brown Insurance Plan May Not Be Workable

A spokesman for Gov. George Deukmejian on Tuesday questioned the financial feasibility of a bill sponsored by Assembly Speaker Willie Brown (D-San Francisco) that would provide auto liability insurance to low-income drivers for only $25 a month.

Throwing cold water on speculation by legislative leaders Monday that Deukmejian and Brown will reach agreement on the legislation, which is now pending in the state Senate, the governor’s press secretary, Kevin Brett, said Tuesday:

“(Our) Department of Insurance has concerns about the feasibility of the Speaker’s proposal. It questions the actuarial soundness of providing insurance at this price. It questions whether it is financially feasible and quite simply whether the numbers add up.”

Even as Brett spoke, and an aide to Brown confirmed that negotiations between the Speaker’s office and representatives of the governor have reached a sticking point, a new issue arose: Whether the state’s mandatory insurance law will lapse if Brown’s bill is not successful.

The chairman of the state Senate’s Insurance Committee, Alan Robbins (D-Tarzana), said that as of now, the mandatory insurance law that first became effective in 1985 will cease functioning at the end of this year under a sunset clause unless the Brown bill is adopted. That law, which requires that motorists stopped for traffic violations show proof that they have insurance or face a driver’s license suspension, will lapse this year unless the Legislature acts.

Robbins noted that he has legislation linked to Brown’s bill that would toughen the mandatory insurance law to require that proof of insurance be submitted before an automobile receives its annual registration.

But, he said, “We can’t keep pushing mandatory insurance if there is going to be no affordable insurance.”

Robbins has long been a strong adherent of mandatory insurance and was a principal co-author of the 1985 legislation that tightened its enforcement. But, he said, it is simply not reasonable for the state to continue to require that a low-income person pay $2,000 a year for minimum insurance, as is the case now in some parts of the Los Angeles area.

So, the senator suggested, the governor ought to come to terms with Brown on the $25-a-month policy, or face the lapse of strict enforcement of mandatory insurance.

Actually, if the 1985 law were to lapse, the state would revert to an earlier mandatory law, under which drivers were required to submit proof of insurance only after having been in an accident. This weaker enforcement standard would make it easier for most drivers to go uninsured without facing any penalty.

With the Legislature due to end its session Friday night, Bill Rutland, an aide to Brown, said that if only the governor’s representatives would make specific suggestions for changes in his bill, “we would jump through hoops” to be accommodating.

Has Been Negotiating

Rutland said Brown’s office has been negotiating with the governor’s legislative secretary, Allan Zaremberg, on the matter, but that he “hasn’t been very good at talking to us in specific terms.”

“I assume the governor’s kind of on a hot spot, because this is a real important issue. But he ought to give us specifics on what he wants. If the governor really gets involved and tells us this, that and the other, I’d assume we would jump through hoops for him.”

Rutland noted that on Tuesday, when Deukmejian’s Consumer Affairs Department objected to a feature in the Brown bill requiring safety inspections every two years for every vehicle, the Speaker was quick to agree to amend the bill to make the inspections random.

In other insurance developments Tuesday:

* The state’s largest insurance lobby, the Assn. of California Insurance Companies, formally announced that it is dropping its opposition to repeal of legislation adopted last year that some insurance company lawyers argue sets a state policy that auto insurance profits ought to be twice what they are now. The repeal legislation, authored by Assemblyman Tom Bane, (D-Tarzana) is expected to win full Senate approval today.

* Insurance Commissioner Roxani Gillespie, in a new move aimed at conciliating critical consumer groups, announced that she is suspending all insurance rate rollback hearings for two to three weeks, to facilitate an agreement by the various parties on uniform hearing procedures and issues. Voter Revolt chairman Harvey Rosenfield hailed Gillespie’s decision.