Dispute Over Car Insurance Erupts
An angry dispute erupted Thursday over whether auto insurance rates in California have been going up or down under the regulatory domain of Insurance Commissioner Chuck Quackenbush.
Consumer advocate Harvey Rosenfield started the argument by releasing a report from the National Assn. of Insurance Commissioners showing that in 1995, Quackenbush’s first year as commissioner and the most recent for which official figures exist, auto premiums increased an average of 8.3%.
That contradicted Quackenbush’s assertions that rates have declined on his watch and contrasted with the rate freeze ordered by his predecessor as commissioner, John Garamendi.
But within hours, Quackenbush released a letter from the insurance commissioner’s association saying it had made a mistake. New data based on preliminary information from the Insurance Department indicated that auto premiums in 1995 went up 1.6%, not 8.3%, according to the letter, which was dated Wednesday.
Quackenbush, saying the rates were “essentially flat,” when purchases of new, higher-priced cars are taken into account, charged that Rosenfield was “deliberately being dishonest.”
But Rosenfield and Harry Snyder, West Coast director of Consumers Union, said they have become convinced that Quackenbush has been putting out false or misleading information on rate increases, not only for auto insurance, but for other types of coverage as well.
They also noted that the insurance commissioners association works primarily for Quackenbush and other state commissioners and suggested that its quick revision of its published 1995 report came under pressure.
The rhetoric foreshadows next year’s announced reelection bid by Quackenbush, a Republican. There has been speculation that Rosenfield, who in 1988 wrote the insurance reform measure Proposition 103, might be a challenger.
In the insurance commissioners association letter to Quackenbush, Executive Vice President Catherine Weatherford said, “The [association] is working closely with the California Department of Insurance to address” what she termed its “oversight” in issuing its report.
Quackenbush, charging that Rosenfield either doesn’t understand insurance “or wants to fool the public,” asserted Thursday that during 1996 “auto insurance rates took a significant dive”--down an average of 5% and in some urban areas 17%.
“Further rate reductions are expected for 1997,” he added.
But there is no official information yet on 1996 and 1997, and some of Quackenbush’s 1997 calculations are based on rate filings he has yet to approve.
Within the last week, Quackenbush has acknowledged approving some sizable rate increases for other types of insurance.
A spokeswoman for the Insurance Department recently said that the commissioner had approved average increases of 7.2% for homeowners policies, and that some companies had received increases of up to 15%.
The average approved rate increase for umbrella liability policies was 11%, the spokeswoman said. But she later acknowledged that in December, the state’s largest insurance seller, State Farm, had been granted a 69.2% increase for its umbrella policies.
Rosenfield’s senior staff counsel, Gina Calabrese, pointed out Thursday that in addition to rate increases, companies often change conditions of policies, restricting coverage while they are increasing rates.
