Lawmakers Abandon Car Insurance Reform : Legislature: Wilson aide blames trial lawyers and they blame Garamendi for the fifth failure in five years.

Auto insurance reform was declared virtually dead for this year as legislative leaders, nearing the end of their annual session, decided Friday not to try to hammer out a compromise package providing low-cost policies.

The lawmakers’ decision appears to mark the fifth consecutive year in which efforts to ease the state’s auto insurance crisis have ended in failure. It may also increase the likelihood of a ballot initiative for no-fault insurance.

In Sacramento, there was the usual finger-pointing.

A spokesman for Gov. Pete Wilson blamed the California Trial Lawyers Assn. for bottling up proposals introducing no-fault insurance, a system in which an accident victim’s losses are paid by the victim’s insurance company regardless of who is at fault.

The president of the lawyers group, Ian Herzog, blamed Insurance Commissioner John Garamendi for switching to support of no-fault insurance and coming up with a complicated proposal at the last moment.

State Sen. Bill Lockyer (D-Hayward), chairman of a special conference committee named this week to write a reform bill, also accused Garamendi of making up his mind too late on no-fault insurance and of failing to provide data on policy costs. It was Lockyer, an opponent of no-fault insurance, who announced Friday that the conference committee would not be meeting after all because the auto insurance issue is simply too complicated to act upon in a few days.

The conference committee, which had been held up in its organization for two weeks because Assembly Speaker Willie Brown (D-San Francisco) delayed his three appointments, was supposed to meet Friday to take up its work.

But Lockyer called off the meeting and later said its efforts now would be pointless.

“All we have is general theory on what to do,” he said. Of Garamendi’s proposal for no-fault and other reforms, he said, “John seems better able to call press conferences than to produce a detailed proposal.”

Without the conference committee, individual lawmakers could still introduce amendments to minor bills next week in the remaining five days of the session. But legislators said Friday that it is highly unlikely that legislation on a subject as complex as auto insurance would be adopted in a spur-of-the-moment fashion.

Also apparently dead for this year is a proposal by Assemblyman Michael Gotch (D-San Diego) that would have revived strict enforcement of the state’s mandatory insurance law.

The legislative leadership decided that it would be unfair to in effect push people into buying insurance if there was no low-cost policy to buy, and Gotch agreed not to seek a necessary committee hearing on his bill.

At the center of the insurance deadlock, most legislative experts agree privately, is the conflict between the insurance industry and some of its powerful allies in government, who insist that no-fault is the only reform that can bring about lower rates, and the trial lawyers, who ferociously resist any such system that reduces lawyers’ role and income from the insurance system.

Two years ago, Speaker Brown, long allied with the trial lawyers, pushed through the Legislature an insurance reform bill for a low-cost policy that did not contain no-fault. However, it was vetoed by then-Gov. George Deukmejian on the grounds that it wasn’t financially self-sustaining.

In April, Wilson forestalled the possibility of such a bill emerging this year by vowing to veto any new Brown bill that did not contain no-fault.

Wilson’s position left continued legislative deadlock the likeliest possibility, since the trial lawyers and their legislative allies control the committees through which reform legislation must pass.

The lawyers had at least a 4-2, and possibly a 5-1, majority against no-fault on the conference committee; yet the only legislation they could adopt that would have any chance of getting the governor’s signature had to contain no-fault.

Under those circumstances, Lockyer’s decision to call off the effort Friday was not surprising.

Franz Wisner, a spokesman for Wilson, said the governor “will pursue other methods and that includes a no-fault initiative. How and when has yet to be determined.”

Harry Snyder of the Consumers Union said any new no-fault initiative should be pursued without the financial aid of the insurance industry, whose support, he suggested, might be the kiss of death.

Garamendi, appearing at a Sacramento news conference with Snyder, said that without legislative action on reform this year, “Things are going to hell in a hand basket next year in auto insurance. They’re pretty close to being there right now.”

The insurance commissioner said later in a Times interview that by next year he expects the state Supreme Court to rule that the state’s “assigned risk” system must pay its own way. The system primarily serves drivers with bad safety records who cannot buy regular insurance. That, Garamendi said, would lead to a new, mammoth jump in assigned risk prices and the decision by hundreds of thousands of drivers to drop their insurance.

“That’s the tragedy” of legislation inaction, Garamendi said. “By next year, it will be much tougher to buy insurance. Fewer people will have insurance.”