New Insurance Initiative Unveiled : Prop. 103: The proposal would expel private companies that failed to comply with pricing requirements. It also provides for establishing a nonprofit state company.

Harvey Rosenfield’s Voter Revolt organization formally unveiled a proposed initiative Tuesday that would expel all private auto insurers from California and replace them with a nonprofit state insurance company unless insurers lowered prices to Proposition 103 levels by Sept. 1, 1991.

But within hours of a news conference to reveal the text of the initiative and set goals for a petition-circulation drive, strong opposition surfaced to this second Rosenfield auto insurance initiative, a successor to Proposition 103.

Five of six candidates for insurance commissioner from both political parties, including Democrats Walter Zelman, Bill Press and Ray Bourhis, said they would oppose the initiative planned for next November’s ballot as untimely and unwise. Later, the West Coast director of the Consumers Union also opposed it, as, predictably, did the major Sacramento lobby for the insurance industry.

Also, Rosenfield acknowledged at his news conference that consumer advocate Ralph Nader, the key backer of Proposition 103, is taking no position on the proposed initiative. Rosenfield’s chosen candidate for insurance commissioner, Democratic State Board of Equalization member Conway Collis, however, supports it.

Two Times polls, taken in 1986 and this fall, have found small pluralities of those surveyed favoring the general proposition of “a state-operated automobile insurance system which would attempt to make all rates equitable” over “the present free enterprise system.” The margin was 44% to 38%, with 17% not sure and 1% refusing to answer, in 1986, and 43% to 40%, with 16% not sure and 1% refusing to answer, this year.

But the results, in addition to being short of a majority, did not show how Californians would feel about the specific initiative announced by Rosenfield Tuesday.

The proposal contains such key details as limiting lawyers fees and setting up a new court system for contested auto accidents claims costing less than $15,000, in which lawyers could not represent claimants.

Rosenfield was frequently strident at the news conference Tuesday, saying, “We’re sending a message to the companies today: Obey Proposition 103, or we’re going to kick your butts out of California.”

Later, he ordered two industry representatives ejected from the news conference. They had come to get texts of the initiative and listen to what he had to say.

Asked to leave were Jeffrey Beyer of the Farmers group of companies and Patricia Lombard of the Western Insurance Information Service. Afterward, they made their own critical comments on the street outside.

Rosenfield and his political consultant, Bill Zimmerman, recently failed to qualify a proposed 1990 initiative that would have split the tax rolls, charging commercial properties twice the tax rate of residential properties. Although they thought they had submitted enough petition signatures to qualify, it turned out they were well short of the required number.

To qualify the initiative for the November, 1990, ballot, Rosenfield must obtain 595,000 valid signatures of registered voters by May 18. Rosenfield and Zimmerman said Tuesday that they will seek 1 million signatures on the new initiative to ensure that there will be enough valid ones.

Among the major points of the proposed initiative:

- Each year beginning in 1991, the elected insurance commissioner would be required to certify that private auto insurance prices were in compliance with Proposition 103’s originally mandated rates of 20% below 1987 levels, after being adjusted for inflation, and that the number of uninsured motorists in the state was under 15% of the total.

- If either of these conditions were not met in any year from 1991 on, the new state-operated company, the California Non-Profit Insurance Fund, would be established a year later.

- In order to register their cars each year, Californians would be required to buy the state insurance, either through insurance agents or the offices of the fund. They could register their cars this way as well, bypassing Department of Motor Vehicles offices.

- The fund would not receive a taxpayer subsidy, although it could borrow money from the state’s general fund to start operations. The loan would be payable, with interest, within three years.