Legislators Plan New Effort on Insurance

Legislators will try to break their five-year stalemate on auto insurance reform with a new round of hearings on various options in October, the chairman of a conference committee said Friday.

State Sen. Bill Lockyer (D-Hayward) said he hopes to fashion a compromise, after negotiations with Gov. Pete Wilson, that will compel the major interest groups--including insurers, trial lawyers and doctors--to allow development of a low-cost basic policy.

The aim, according to another committee member, Sen. Patrick Johnston (D-Stockton), is to enact an acceptable package early enough in the 1992 legislative session to avert a no-fault insurance initiative that Wilson has indicated he will sponsor.

But the six-member conference committee, created just before the Legislature ended this year’s session, is heavily weighted toward trial lawyers. As a result, many experts think it unlikely that the panel will be able to come up with a bill that Wilson would sign. The trial lawyers are opposed to no-fault. Wilson has said he will not sign anything that does not contain it.

Lockyer, who has been aligned with the lawyers against no-fault, said Friday, “It’s fair to argue that the committee’s tilted a bit toward the trial-lawyer side of the issue, but that may be a fair balance to the tilt that exists in the governor’s office.”

The senator acknowledged that if those tilts do not change to some extent, another deadlock is likely. But he released a memo prepared by a staff member that foresees the possibility of a change in the present legal system, such as a limit on damages for pain and suffering, that might be acceptable to the no-fault forces.

The memo from Gene W. Wong, counsel to Lockyer’s Judiciary Committee, gives the highest estimate yet of the percentage of uninsured motorists--33% statewide and as high as 75% in central Los Angeles.

Wong argues that insurance reform ought to focus on relief for low- and middle-income drivers and assure that the low-cost policy is useful, rather than providing just a veneer of protection.

Lockyer said the two daylong hearings will be held in Sacramento on Oct. 3 and 10, and he said it is possible that other hearings will be held in Los Angeles and the Bay Area. The Legislature will be out of session, and no action could be taken on the proposals until it reconvenes in January.

“No-fault has been rejected by the voters overwhelmingly, I think for good reason,” Lockyer said. “However, there is plenty of fault to go around for problems in auto insurance. And it seems to me an appropriate legislative effort would be an attempt to squeeze the cost centers that contribute to high prices. That would mean going after all the costs, not only the litigation system.”