Insurance Rate Rollbacks Hit New Snag : Proposition 103: An obscure state office refuses to approve John Garamendi’s emergency regulations.

The long-delayed Proposition 103 insurance rate rollbacks and rebates ran into a new snag Monday when the obscure state Office of Administrative Law refused to approve Insurance Commissioner John Garamendi’s emergency regulations for making the rebates.

The refusal came on the deadline day for the office to take action. A number of insurance companies, which have been fighting the rebates for nearly three years, have bombarded the office with letters arguing that no authentic emergency exists and that permanent regulations should await a new, lengthy round of public hearings.

The size of the proposed rebates has yet to be announced. They could be as much as 20% of 1989 premiums on auto, homeowner, commercial and other policies.

Some insurance company lawyers also contended that Garamendi’s regulations were faulty because they gave him too much latitude to fill in details later on what the rebate amounts would be.

Although Garamendi aides held out the possibility that the Democratic commissioner might still go ahead with plans for a Thursday news conference to announce some details of perhaps more than $1 billion in rebates, the position taken by the Office of Administrative Law cast serious doubt over whether he can legally issue the rebates at this point.

The Administrative Law Office’s refusal came on its new director’s first day on the job. Gov. Pete Wilson’s new appointee is former Republican state Sen. Marz Garcia. Two Republican administrations, Wilson’s and George Deukmejian’s, have often appeared reluctant to pursue full implementation of Proposition 103.

But the Administrative Law Office’s deputy director, John Smith, said that Garcia was not in on Monday’s decision because he had just taken office, and Smith also denied that the insurance companies’ arguments had been accepted.

Smith said it was more a case of the office not understanding some of the provisions that Garamendi had proposed. He said Garamendi could resubmit his regulations later, after further discussion, which would give the office a new 10-day period to decide whether to approve them.

Steven Miller, Garamendi’s deputy for implementing Proposition 103, said he remained hopeful that those discussions might ultimately win the approval of the Administrative Law Office.

Two attorneys representing Garamendi, Fredric Woocher and Michael Strumwasser, said, however, that they question whether the Administrative Law Office can legally hold up the rebates, although they conceded this could become the subject of another protracted court test.