Ban on Auto Rate Hikes to Be Extended : Insurance: Gillespie says the price freeze will last until completion of hearings on Proposition 103. Her aide says the wait may be even longer.

Insurance Commissioner Roxani Gillespie said Monday she intends to extend her 10-month-old freeze on auto insurance rates in California through the completion of hearings scheduled to begin next month on rate rollbacks called for under Proposition 103.

Gillespie’s special counsel for Proposition 103 implementation, Karl Rubinstein, went further, saying that no rate increases will be granted until the insurance company’s appeals expected on the rollback orders for 1989 premiums are litigated to the appellate court level. The orders mandate rebates to customers of part of the 1989 premiums.

Rubinstein’s remarks indicated that any rate hikes for auto insurance could be delayed several months at least. Insurers had anticipated that they would be allowed to raise rates soon.

The statements about extending the rate freeze came after four leading consumer advocacy organizations announced they will not participate in a different set of hearings Gillespie has scheduled on approval of new, possibly higher future rates for auto insurers.

The groups--Voter Revolt, Consumers Union, Latino Issues Forum and Public Advocates-- said they object to the retired state Court of Appeal judge the insurance commissioner has named to preside over the hearings because as a “rent-a-judge” he has in the past worked for insurance companies on a number of cases.

In a letter to Gillespie on Monday, officials of the consumers organizations said the judge, James Scott, admitted to them in a pre-hearing conference last week that he had been paid by insurance companies whose rate applications he would be hearing, but he had refused to recuse himself. They asked Gillespie to remove him.

Gillespie and Rubinstein said Monday they believe Scott will be fair to all sides. Also, they said, all final decisions for future rates resulting from the hearings beginning Wednesday will be made by Gillespie and held in abeyance pending outcome of the rollback hearings.

The groups maintain that the hearings on future rates should not begin until the rollback hearings are complete.

Gillespie said Monday that the rollback hearings require 30 days’ advance notice, and if she waits on finishing them to begin the hearings on future rates, “it will needlessly delay the entire Proposition 103 implementation process.”

A special counsel to Atty. Gen. John K. Van de Kamp on insurance matters, Fredric Woocher, said Monday he is concerned that Gillespie may be trying to establish pro-insurer hearing procedures in advance of a new elected commissioner taking office in January that will tie that commissioner’s hands later.

Meanwhile, an attorney for State Farm, the state’s largest seller of auto insurance, disclosed Monday that at this week’s hearings State Farm is asking for approval of rates it has had in effect since last year and not for any rate increase.