Brown Wants to Talk to Governor on Insurance Bill

Assembly Speaker Willie Brown (D-San Francisco) is asking for a face-to-face meeting with Gov. George Deukmejian in an attempt to persuade him to sign Brown’s bill to provide low-income drivers with auto liability insurance for a flat statewide rate of only $25 a month.

Brown said that if Deukmejian proves determined to veto the measure, then he will try to reach agreement with the governor on revisions in the bill that would pave the way for the Legislature to reconsider it early next year.

Since passage of the Brown bill by narrow margins Friday night at the end of the legislative session, there have been signals from both the governor and the Speaker that the two may continue negotiations on a possible compromise bill, even if this one is vetoed.

Deukmejian described auto insurance relief for low-income drivers as “a noble goal” in comments to reporters Saturday and said he is willing to work with Brown on the matter, even though he is concerned that Brown’s bill, in its present form, may not be financially viable.

The present bill is strongly opposed by the insurance industry, whose representatives claim that it would result in middle- and upper-income drivers paying a subsidy on their policies to finance the low-cost policies.

Brown, denying this, said in an interview: “This bill doesn’t hurt anyone. It doesn’t adversely affect the insurance industry. It helps 4 million people who can’t afford auto insurance now.”

Deukmejian, in comments to reporters over the weekend, indicated that he was leaning toward a veto.

“I’d have to say that I don’t think the chances for it are bright at the moment,” Deukmejian said. “But I don’t want to make a final decision on it without reviewing it much more carefully than I’ve had a chance to do up to this hour.”

The governor has 12 days from the receipt of a bill to decide whether to sign or veto it. Depending on when the Brown bill crosses his desk, his press secretary said, a decision could come as late as Oct. 2.

Brown said he planned to call the governor in a day or two to “ask him if he’s responsive to a conference.”

“Then, I’ll come up to Sacramento. I think he’ll agree,” he said.

Before the bill passed, Deukmejian asked Brown to alter the bill in two ways.

The Speaker said the governor wanted him to remove a provision that would restore the right of third-party claimants to file bad-faith lawsuits against insurance companies. Brown also said the governor asked that the state insurance commissioner be given authority to prevent pain and suffering claims against holders of the low-cost policies if the new form of insurance proved to be a money loser. As the bill now is written, the commissioner would have to ask the Legislature for such authority.

“I would always say, ‘If I do this, will you support the bill?’ ” Brown said he had told representatives of the governor sent to negotiate with him in the closing days of the session. “And I’d get no response.”

“Well, I’m certainly not going to change my bill on a wing and a prayer,” he said.

However, Brown said that if he and the governor can agree on certain changes in a meeting, then he would be willing to “recall the bill from the governor’s office” and work for its passage in revised form early next year.

The Brown bill in its present form sets an income limit of $20,000 for an individual or $25,000 for a family to obtain the low-cost policy. Citizens over 55 years of age could also be eligible for it if their income was less than $30,000.

The bill allows the insurance commissioner to increase the charge to $33 a month and reduce injury benefits from $15,000 for an individual and $30,000 for multiple parties down to $10,000 and $20,000, respectively, should it turn out middle- and upper-income policyholders have to be charged more to pay for excess claims under the low-cost policies.

As it is, the Brown bill already envisions that some premiums that more affluent policyholders now pay for uninsured motorist coverage will be diverted to help pay the low-cost policy claims. This presupposes that the existence of the low-cost policy option will reduce the number of uninsured motorists and render such coverage unnecessary.

This would, in effect, convert present uninsured motorist coverage into a subsidy for the low-cost policies, and it is unclear whether, since there would be no increase to anyone, Deukmejian would object to it.