Car Insurance Overcharging

Re “Inquiry Is Needed on Claim of Auto Policy Overcharging,” editorial, June 6: We support The Times’ call for an inquiry into a Consumers Union report on auto insurance industry profits. The inquiry should also include an analysis of those aspects of Proposition 103 that are responsible for “locking in rates” in a market where costs are declining.

Proposition 103, unbeknownst to the voters who supported it, has created a time-consuming, bureaucratic quagmire that is stifling competition and preventing insurers from quickly reacting to market changes and adjusting rates--including reductions.

Proposition 103 has been a grand economic experiment that has served to provide meager rebates to policyholders and untold employment opportunities for litigators on both sides. It has not delivered the promise of reduced rates, but instead has created a lethargy of price competition while rate-reduction requests languished in the Department of Insurance.

BARRY F. CARMODY

President, Assn. of California

Insurance Companies, Sacramento