Assigned Risk Compromise Struck : Insurance: Starting May 21, good drivers can get assigned risk coverage only by swearing that they have been turned down by two companies.

The California Automobile Assigned Risk Plan’s decision to stop accepting new applicants who qualify as “good drivers” was put on hold Friday until May 21--and even then operators of the system will still have to take those drivers under certain circumstances.

Los Angeles Superior Court Judge Miriam A. Vogel refused motions by attorneys for Insurance Commissioner Roxani Gillespie and consumers organizations to issue an injunction against the impending May 1 ban on “good drivers”--those with no more than one minor violation in three years--from enrolling in the assigned risk system.

But Vogel, in discussions in her courtroom with the various parties, won agreement for a new procedure under which all drivers applying for assigned risk coverage will be required to submit a sworn affidavit that they have been refused coverage by at least two regular carriers.

The exact content of the affidavit was left to the state Insurance Department to devise, but Vogel made it clear she thinks it should be specific as to who had refused the coverage and for what reason.

Insurance agents’ representatives in the courtroom, as well as Fred Woocher, special counsel to Atty. Gen. John K. Van de Kamp, insisted that requiring precise information on who denied coverage and why would ignore reality. They argued that company refusals to insure many individuals, particularly minority and low-income people, are often vague acts of omission, such as not responding to telephone calls or never rendering a formal decision on applications.

Vogel, however, said she thinks the new procedure would allow anyone determined to buy insurance--but unable to get it, even though he or she is a “good driver”--to obtain it through assigned risk. At the same time, the judge said, fly-by-night agencies that routinely refer all applicants to assigned risk would be deterred from doing so.

A spokesman for the insurer-dominated assigned risk governing board estimated that under the new system, those with assigned risk coverage could decline in numbers from the present 1.2 million to less than 600,000.

Vogel said the new forms should be drafted by May 11 and begin to be used by May 21.

The assigned risk system was set up for motorists--particularly those with bad driving records--who could not buy auto insurance through the regular markets. Those enrolled are assigned to insurance companies in proportion to each company’s share of the California auto insurance business. The insurers have long complained that hundreds of thousands of people have been flooding into the assigned risk system who are able to buy regular coverage.

Insurers say the companies lost $600 million last year on such policyholders because assigned risk prices have been held down by Gillespie to make insurance more affordable in urban areas.

But Gillespie and the consumer organizations maintain that many of the “good drivers” who have flocked to buy assigned risk are unable to buy in the regular market because of redlining against minorities, urban dwellers and newly insured people.

They warned the judge that the assigned risk board’s decision to stop taking “good drivers” could leave hundreds of thousands of people unable to get insurance at any price and end in a collapse of the state’s mandatory insurance law.

Under Proposition 103, insurance companies must sell policies to all who qualify as good drivers. But there has been considerable testimony at recent hearings that many companies ignore the law.

Vogel said that, if this is so, the affidavits will make it clear and identify the guilty companies. She suggested that the assigned risk board forward such information to the Insurance Department for prosecution.

Karl Rubinstein, Gillespie’s attorney, remarked that if that is done, “the district attorneys of Los Angeles and San Francisco (to whom such cases would ultimately be referred) will be very busy.”

Last week, Vogel said she would formally order that Gillespie reverse her recent rejection of a 112.3% average statewide increase in assigned risk rates, or 137% in central Los Angeles. The judge said that subsidizing insurance for the poor should be decided by the Legislature, not by the insurance commissioner through the setting of assigned risk rates.

But that decision, when made final, will be automatically stayed while it is appealed by Gillespie, who says she has the authority to act on her own.