Wilson Signals He’ll Sign 2 Insurance Bills : Legislation: He backs repeal of fiscally ailing earthquake repair program and praises a plan to provide health policies to employees of small businesses. But an overhaul of auto coverage may be vetoed.

A top adviser to Gov. Pete Wilson said Tuesday that the governor is ready to sign a bill repealing the state’s earthquake damage repair program for homeowners but hinted he may veto the Legislature’s effort to overhaul auto insurance.

In a related action, Wilson signaled that he would sign separate legislation aimed at guaranteeing health care insurance coverage for employees of California small businesses who do not have such coverage.

Bills dealing with all three issues were sent to Wilson by the Legislature on Monday night. The governor has until Sept. 30 to sign or veto legislation.

In a statement Tuesday, the governor noted he had embraced the need for small-business health insurance last April and said the bill by Assemblyman Burt Margolin (D-Los Angeles) would help workers at small businesses and their employers gain access to “quality, affordable health care coverage.”

The Margolin bill would insure about 100,000 workers for the first time and would guarantee that another 1.2 million workers would remain insured if they move from one job to another. It would guarantee that insurance would be issued to firms with three to 50 workers regardless of health risk and limit renewal rate increases to 10% a year.

Margolin said the bill seeks to take a modest but important step toward the long-range goal of providing health coverage to about 6 million low-income Californians who are not covered by private or public insurance.

Earlier in the day, Marjorie M. Berte, the governor’s insurance adviser, said the governor will sign legislation to abolish the severely underfunded 1990 California Residential Earthquake Recovery Act.

She said the state’s first venture into the disaster preparedness business is so strapped for money that if several substantial quakes occurred, not to mention a major temblor on the San Andreas Fault, the program would go bankrupt. As a result, the state’s cash-starved general fund would be held liable to pay huge sums in homeowner damage claims.

The program is financed by annual charges of $12 to $60 on top of premiums paid by homeowners. During its brief tenure, it has paid out claims of up to $15,000 each to people whose homes were damaged by earthquakes. Under the bill, any remaining homeowner payments would be rebated on a pro rata basis.

On auto insurance, Berte stressed that Wilson had taken no position on the Legislature’s newly passed bill to make coverage more affordable but said she found the proposal to be disappointing.

In response to questions, Berte refused to say whether she will recommend that Wilson sign or veto the bill. However, she said she was “not confident the bill delivers savings for consumers,” in spite of assertions to the contrary by proponents.

The proposal, which would be implemented over the next three years, envisions providing a basic policy for $288 through a series of cost-containment measures, including limiting certain doctor and lawyer fees.

Opponents of the auto insurance overhaul include the biggest economic interests in the area of accidents, including the insurance industry, doctors, personal injury lawyers and auto body mechanics. Separately, Consumers Union also objected to the bill, saying it “does not produce enough savings to guarantee a low-cost policy.”

Wilson is a strong advocate of no-fault insurance, under which a motorist’s company pays for accident costs regardless of who is to blame. The measure in front of Wilson does not contain the no-fault feature--further reason to believe he may issue a veto.

Additionally, Berte said Wilson wants to get “fundamental reform, particularly in the basic liability area.”

On that key issue, Berte said the bill by Sen. Bill Lockyer (D-Hayward) failed to adequately attack increasingly expensive bodily injury liability costs.

“That is the area of the automobile premium insurance dollar that has been increasing in cost faster than anything else,” Berte said. “The bill is so disappointing because there is nothing in it that attacks that problem.”

During debate on the bill, Lockyer argued that a projected $288-a-year premium for no-frills car insurance would represent a major savings to California motorists. He contended that major economic interests opposing the bill did not want to share in the financial pain of providing relief to vehicle owners.