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Three Officials Back Proposed Initiative on Car Insurance

November 03, 1987|KENNETH REICH | Times Staff Writer

Los Angeles Mayor Tom Bradley, county Supervisor Kenneth Hahn and state Sen. Diane Watson (D-Los Angeles) on Monday jointly endorsed a proposed ballot initiative that would bar neighborhood price differentials on auto insurance and sex price differentials on life insurance while requiring state Insurance Department approval for all rate increases.

Hahn declared that both his campaign organization and funds will be used in the effort to qualify the initiative for the November, 1988, general election.

Its sponsor, Adam Burton, a former deputy to both Hahn and Rep. Augustus F. Hawkins (D-Los Angeles), said that the drive to obtain the required 372,000 petition signatures from registered voters by next March 27 will cost an estimated $200,000.

Bradley said he will urge his supporters to contribute to the effort but he told a City Hall news conference that he will save his own campaign funds for his expected reelection effort in 1989. Later, however, Burton said he had talked the mayor into making at least some financial gift to the petition drive.

Bradley, Hahn and Watson all have political roots in the inner-city areas on the Southside of Los Angeles that along with the Eastside have the highest auto liability insurance rates in the state and would benefit the most from an end to the present "territorial" rating system. That system is expected to become even more controversial after last week's state Supreme Court decision upholding the state's mandatory auto insurance law.

A map displayed in the press conference room as the three political leaders spoke showed that an adult inner-city Los Angeles resident with no traffic accidents or violations would pay $2,755 a year to insure his car, while a driver fitting the same specifications and owning the same make of car would pay only $739 in San Diego, $747 in Kern and Ventura counties, $800 in San Bernardino County, $860 in Orange County and $865 in Riverside County.

Burton almost qualified an initiative against territorial price differentials last year, falling only a few thousand signatures short.

This year, he has broadened his initiative and has been seeking wider political support. The new initiative, in addition to giving the Insurance Department rate approval authority, would also rule out approval when the increases are "unreasonable, excessive or discriminatory," provide for "good driver" discounts, set up an office of consumer advocacy in the Insurance Department and place a $500 limit on insurance company contributions to individual politicians.

It would also freeze all rates until 1989, pending approval of new ones.

One argument used by the insurance industry against abolition of the territorial rating system in the past has been that an averaging out of rates between territories would mean reductions for only about one-third of the state's drivers, while the rates of the other two-thirds would go up.

Burton said, however, that he felt that, by bringing millions of uninsured drivers into the system, it would be possible to cut most people's rates.

Meanwhile, in another development, participants in closed-door discussions in Pebble Beach last week said insurance lobbyists and representatives of consumer organizations have so far been unable to agree on changes in the insurance laws that would avert an insurance ballot initiative next year.

There was disagreement on whether the talks have collapsed.

The West Coast director of Consumers Union, Harry Snyder, said they had, charging that the insurance lobby was unwilling to agree to any meaningful changes in the law.

But the head of the Insurance Consumer Action Network, Steven Miller, said that while the talks have been "difficult," they will continue, and the general manager of the Sacramento office of the Assn. of California Insurance Companies, Ed Levy, said that was his understanding as well.

The consumer advocates, meanwhile, were coming under some fire for meeting behind closed doors with the lobbyists to make a deal. Spencer Wiley, head of the Los Angeles-based group Citizens Against Discrimination of Auto Insurance, said he could not understand how Miller and Snyder could claim to speak for all consumers.

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