Prop. 103 Is Stymied by New Delays : Insurance: Commissioner Gillespie and leading auto insurers agree to put off implementing emergency regulations on methods of pricing policies.

Delaying by at least another 2 1/2 months key steps to implement Proposition 103, Insurance Commissioner Roxani Gillespie entered into a new agreement with auto insurers Wednesday that further puts off her plan to curtail ZIP-code pricing and thus lower urban auto insurance rates.

Also delayed until at least August will be Gillespie’s orders barring the use of sex and marital status factors in the pricing of auto insurance.

An agreement between Gillespie and the insurers was put into the form of a court order late Wednesday by San Francisco Superior Court Judge John Ertola over the bitter objection of an attorney for the Voter Revolt organization, the sponsor of Proposition 103.

“A few companies step up and say ‘boo,’ and she (Gillespie) runs in the other direction, again and again and again,” charged Jim Wheaton, the Voter Revolt attorney.

The agreement puts in abeyance most of Gillespie’s emergency regulations, issued with great fanfare on Dec. 5 and challenged in lawsuits by four big companies, State Farm, Allstate, Farmers and Hartford. The regulations are delayed until the end of current fair-rate-of-return hearings Gillespie is holding for the companies in San Bruno.

The companies contended in their lawsuits that Gillespie’s order for them to lower urban rates while not materially increasing rural and suburban rates would deprive them of a fair return, and they also argued that her new pricing criteria were so complex as to be unfeasible. Gillespie’s special attorney for the implementation of Proposition 103, Karl Rubinstein, said last week that the commissioner feels unable to effectively defend her pricing regulations in court until she has decided what constitutes a fair rate of return for the companies, and that will not be until the end of February.

Then, under the agreement accepted Wednesday by the court, Gillespie will give the companies until the beginning of April to file pricing plans. She will then have until the beginning of August the right to approve or reject them.

Originally, the companies were to file the pricing plans by Feb. 13, and they would have been implemented in mid-May.

However, the agreement Gillespie and the insurers reached also preserves the right of the companies to resume pursuing their lawsuits against the emergency regulations after the hearings in San Bruno end. In other words, the lawsuits will not be heard now, but can be heard later in the spring, after which company lawyers will be free to seek the injunctions against the pricing regulations that they asked for in their filings of the last two weeks.

Gillespie, who has reportedly been suffering from a knee ailment, did not attend Wednesday’s court hearing; Rubinstein represented her. In addition to the Voter Revolt attorney Wheaton’s vehement objections to the new delays, lawyers for the Consumers Union also entered some milder objections.

Also attending the hearing was Ray Bourhis, a San Francisco trial attorney who is one of five candidates for the Democratic nomination for insurance commissioner.

Bourhis declared angrily afterward that in accepting the stipulation, Judge Ertola had allowed “in two words, more delay, which of course is what makes insurance defense lawyers rich and insurance companies very, very happy. It leaves the consumers ignored and out in the cold completely.”

Bourhis joined Wheaton in assailing Gillespie for allegedly setting up a procedure that leads to court battles by insurers, and then walking away from it in new “truce” agreements with the insurers.

Neither Gillespie nor Rubinstein could be reached for comment.

Under the original terms of Proposition 103, Gillespie was supposed to have promulgated new pricing regulations--reducing the impact of ZIP-code pricing and putting the most weight on drivers’ safety records, annual miles driven and years of driving experience--no later than last Nov. 8.

But, entering into an earlier arrangement with insurers, Gillespie agreed to put off issuing the regulations until the end of November in exchange for the companies’ willingness to cooperate in hearings designed to examine what regulations should be issued.