Prop. 103 Author Sues to Halt Insurance Plan

Proposition 103 author Harvey Rosenfield on Tuesday filed suit to block Insurance Commissioner Chuck Quackenbush from implementing a 1993 state law that Rosenfield contends would deprive consumers of up to $600 million in rebates under the 1988 insurance rate-cutting initiative.

Quackenbush assailed the lawsuit, saying it would halt the progress he has made in negotiating Proposition 103 rebates.

The law allows insurance agents to keep the full amount of commissions earned during the period of 1988 and 1989 covered by Proposition 103. But Rosenfield argues that if, for example, an insurance company is required to rebate 20% of its premiums, then the agents ought to rebate 20% of their commissions on those policies as well.

Rosenfield’s organization, the Proposition 103 Enforcement Project, asked the California Court of Appeal to rule that the law is invalid because it does not “further the purposes” of Proposition 103.

Quackenbush, in a statement Tuesday, said that he has resolved 105 of the 161 Proposition 103 rebate cases that faced him when he took office in January. Three other cases are in administrative hearings, and the remaining 53 are the subject of a special hearing Nov. 21-22.

“Mr. Rosenfield’s lawsuit would stymie this process and keep consumers from collecting their due,” he said.

Rosenfield said he had hoped that Quackenbush would join him in trying to reverse the law.