Judge Upholds Rate Freeze on Auto Policies : Insurance: An ambiguous Superior Court ruling leaves Insurance Commissioner Roxani Gillespie’s cap on the cost of car coverage intact for now.

A Los Angeles Superior Court judge left Insurance Commissioner Roxani Gillespie’s freeze on auto insurance rate increases in effect until at least the end of November on Tuesday, telling the Farmers group of companies not to raise its rates on Nov. 1 as the company had planned.

But Judge Miriam A. Vogel, in an ambiguous decision that left Gillespie and Farmers attorneys disagreeing over what had been ordered, said that on Dec. 1, or a later date she may set, Farmers will be free to implement its 5.9% rate increase--subject to Gillespie’s review.

Gillespie, saying that she will review the increase immediately and that she has the power to strike it down the day it is implemented, said the court decision had left her rate freeze, announced on Oct. 2, “alive and well.” Gillespie told reporters, “Basically we won. The freeze is intact.”

Farmers representatives disagreed. The lead Farmers attorney, Leonard Venger, said that Farmers will be free to raise its rates by 5.9% on the date eventually set by Judge Vogel, and that the review by Gillespie will have to follow due process, meaning it could take weeks or months of hearings, and that any such review will be subject to a court appeal by Farmers.

Meantime, a Farmers spokesman announced that the company will notify all policyholders who had received notice of the rate increase that it is being delayed about a month beyond the original Nov. 1 implementation date.

As the two parties quarreled before a battery of news cameras on what the judge had done, Vogel’s clerk said the judge’s order was not so much a decision by her as an agreed-upon stipulation by Gillespie’s special counsel, Karl Rubinstein, and Farmers attorneys as to what would happen.

The clerk said the judge’s formal order did not state Vogel’s understanding of what would happen but simply referred back to the transcript of the hearing and cited what the two parties had agreed to.

The clerk said the transcript would not be available for 24 hours.

During the actual court session, Vogel had asked several times for the two parties to express their understanding of the stipulated agreement. However, each time she did so, the parties were in wide disagreement on what the agreement contained, and the judge’s attempt to clarify the matter apparently was unsuccessful.

Outside the courtroom, neither of the parties could agree on the ultimate effect of the decision, except that it allows Gillespie’s freeze to remain intact through the end of November.

The judge set a Nov. 21 status hearing at which she will review the situation and set a precise date for Farmers to try to implement its rate increase.

The effect of Tuesday’s proceedings on other companies, and their possible desire to raise rates despite the Gillespie freeze, was unclear. Consumer representatives who were present at the hearing, meanwhile, questioned whether Vogel could properly accede to any rate increase that will take place after Nov. 8, the date Gillespie gains formal authority under Proposition 103 to approve or disapprove all rate hikes.

The consumer representatives, such as Steven Miller of the Insurance Consumer Action Network, said it appeared that Vogel was ready to allow Farmers to eventually raise its rates after Nov. 8 without the prior approval of Gillespie, even though subject to Gillespie’s later review. They said this contravenes Proposition 103 and questioned whether Vogel had realized that.

Quite a bit of time was taken up during the hearing with questions by the judge to Rubinstein, Gillespie’s counsel, on how long the insurance commissioner thought it necessary for the freeze to endure.

Rubinstein said that Gillespie is trying to make a deal with the insurance companies for expediting progress at hearings she has called to begin Oct. 30 on major Proposition 103 implementation issues, including new methods of pricing auto insurance that will give less emphasis to where a driver lives.

If the insurers agree to cooperate, Rubinstein said, Gillespie hopes the key issues of insurance pricing will be settled by the end of November, and that the freeze could be lifted by that time.

However, even after that, Proposition 103 states that all rate increases by insurers are supposed to be subject to the prior approval of the commissioner, a process that could take months.

Vogel said she did not believe that it was right to prevent Farmers from implementing the 5.9% rate increase for many months.

So, she said, she wanted to allow it to go into effect after the hearings had resolved the pricing issues, probably around Dec. 1, but subject to Gillespie’s review.

Vogel said she was calling the Nov. 21 status hearing so that she could ascertain whether the hearings were making progress, and if they were not, who was to blame. She said she reserved the right to come down hard on whatever party, the insurers, the consumers or Gillespie, was to blame for any lack of progress.