Geico Insurance Co., California's 11th-largest auto insurer, agreed to pay customers $21 million in Proposition 103 rebates--37% of what it was originally ordered to pay under the 1988 rate rollback initiative.
About 90,000 people who held Geico policies between Nov. 8, 1988, and Nov. 7, 1989, will receive rebates averaging $233 apiece. The rebates include no interest, so recipients do not have to pay taxes on them, a state Insurance Department spokesman said.
Insurance Commissioner John Garamendi has been negotiating individual settlements with insurers since a Superior Court judge in February rejected his regulations for broadly implementing Prop. 103. The judge's ruling has been appealed to the California Supreme Court.
Under Garamendi's original implementation plan, Geico was ordered in October, 1991, to rebate $56.2 million, including interest.
"The good news is that money is going back to consumers. The bad news is that it could have been more," said Philip Roberto, a spokesman for Voter Revolt, which led the Prop. 103 initiative campaign.
Voter Revolt has criticized Garamendi over settlements that it considers too generous to insurers.
The organization has formally challenged one such deal involving California Casualty Group and said it would study the Geico settlement before deciding whether to challenge it as well.