Old Arguments Snag Auto Insurance Talks : Legislature: The cost of no-fault is disputed as lawmakers debate reform. Chances for an initiative sponsored by governor appear to dim.

A new attempt to enact auto insurance reform in the Legislature got under way Thursday at the first of two committee hearings, but it quickly bogged down in old arguments over the merits of no-fault insurance.

Actuaries for Insurance Commissioner John Garamendi, the insurance industry and the California Trial Lawyers Assn. gave widely differing estimates of the cost of no-fault to consumers. For this and other reasons, representatives of the major interests concerned with insurance generally gave the new reform effort, headed by state Sen. Bill Lockyer (D-Hayward), little chance of making headway.

Meanwhile, Gov. Pete Wilson’s press secretary, Bill Livingstone, said in an interview that the governor now views as “problematic” the prospect of sponsoring a no-fault ballot initiative next year.

The governor had said he might sponsor an initiative if the Legislature failed to reform auto insurance. But Livingstone said there do not appear to be enough campaign contributions available to fund an initiative campaign, in light of the expensive partisan battle over newly reapportioned legislative and congressional seats expected next year.

Other knowledgeable sources here suggested, however, that if Wilson does not sponsor an initiative, Garamendi might. The insurance commissioner recently switched his position to back no-fault, a system under which victims collect for their losses from their own companies regardless of fault in an accident.

Lockyer’s conference committee includes Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti among its six members. But the committee membership appears heavily weighted toward the trial lawyer position opposed to no-fault, while the governor has vowed to sign no reform bill that does not include no-fault.

This was the basis of the deadlock during this year’s session of the Legislature, and there were few if any signs Thursday that it will change in the year ahead.

But Lockyer expressed hope that the Legislature and the governor could compromise on a low-cost basic auto insurance policy that would win unanimous support.

Only three of the six conference committee members attended Thursday’s hearing. Of those who attended, state Sen. Patrick Johnson (D-Stockton) is for no-fault, while Lockyer and Assemblyman Paul Horcher (R-Hacienda Heights) have been against it.

Garamendi started things off with a lengthy presentation of his proposal for comprehensive insurance reform, including no-fault and provisions for controlling car repair, medical and other costs of the insurance system.

The commissioner said there were many areas in which savings could be found, mentioning specifically that 36% of all insurance premiums go to pay lawyers or sales agents--in essence, middlemen who reap great income from the system.

Garamendi suggested that lawyers in particular were to blame in a major way for the fact that the rate of bodily injury claims has steadily risen in California, while holding steady under no-fault in New York.

But Horcher interjected that he believes California’s large numbers of immigrants are responsible for mounting injuries here, saying they do not drive as carefully as natives.

The trial lawyers actuary said he believed California injury claims have mounted because many motorists drive small cars.

Later, a trial lawyer representative released papers quoting Garamendi’s actuary, Don Bashline, as saying that no-fault insurance would actually cost the average California driver more than sticking with the present system would, when all advisable coverages were included.

A Garamendi aide, Masako Dolan, said the trial lawyers had distorted Bashline’s analysis. Bashline himself testified Thursday that no-fault would save money.

The second hearing will be held at the state Capitol next Thursday.