Advertisement
YOU ARE HERE: LAT HomeCollectionsAttorneys

Planned Initiative Threatens Truce of Insurers, Lawyers

November 19, 1987|KENNETH REICH | Times Staff Writer

An initiative that could jeopardize an uneasy cease fire between insurance company lobbyists and the California Trial Lawyers Assn. has been proposed for the fall 1988 ballot by activists pushing for state controls over insurance rates.

The initiative, the third insurance measure proposed for the fall 1988 ballot, is being sponsored by Access to Justice--a group that says it is acting independently despite a former alliance with the trial lawyers group. The measure contains these main features:

- A 15% rollback of auto and business liability premiums as they existed on Nov. 4.

- Approval of all subsequent rate increases by the state insurance commissioner, who would be popularly elected beginning in 1990.

- An end to the territorial rating system of basing auto insurance rates on where the driver lives. Driving records and annual miles driven would be substituted as the criteria for rate differentials and a 20% good driver discount would be offered.

The insurance industry firmly opposes all of these ideas.

Lawyers' Positions

The Access to Justice proposal, while quickly disavowed by a spokesman for the California Trial Lawyers Assn., is so close to traditional trial lawyer positions that it may have the effect of further jeopardizing last summer's agreement between the association and the insurance industry not to field any ballot initiatives against each other next year.

Spokesmen for both lobbies said last week that the agreement may collapse if either side thinks an initiative contrary to its interests is likely to qualify for the ballot.

Efforts to lower insurance prices would have an adverse financial effect on either the insurers or the trial lawyers, both of which derive a great deal of income from the insurance system.

Informed of the latest initiative Wednesday, George Tye, an official of the Assn. of California Insurance Companies, said an executive group of the insurance lobby will meet Monday and discuss whether the nonaggression pact with the lawyers is still viable.

Tye said that if the pact collapses, the insurers, along with their allies in the business community, may file an initiative including legal changes targeted at the trial lawyers as one means of lowering insurance costs to the consumer.

Access to Justice executive director Harvey Rosenfield said a $400,000 drive would be mounted through the mails, telephones and door-to-door canvassing to qualify the initiative by getting the required 372,178 signatures of registered voters by next March.

Rosenfield announced that political contributor and philanthropist Stanley Sheinbaum will be the campaign's financial chairman and Bill Zimmerman, who has qualified two other initiatives in the past, will manage the effort.

The initiative effort was endorsed by Assemblywoman Maxine Waters (D-Los Angeles), a longtime critic of the insurance industry, Los Angeles City Councilwoman Gloria Molina and the West Coast director of the Consumers Union, Harry Snyder. Until last week, Snyder was talking about filing his own initiative.

Two other initiative efforts have already been announced. One, by Adam Burton, a former aide to Rep. Augustus Hawkins (D-Los Angeles), would do away with the territorial rating system and institute more rate regulation by the state Insurance Department.

A second, by Assemblyman Richard Polanco (D-Los Angeles), would limit recovery of non-economic damages, such as pain and suffering, in auto accidents while cutting liability rates by 50%.

Others Scrambling

Both the Access to Justice and Burton initiatives are perceived to adversely affect the interests of the insurers. The Polanco initiative would probably hurt the interests of both the insurers and the trial lawyers.

Usually in the past, initiative qualification efforts that proved successful used the services of the state's two professional ballot qualification firms. But last week, it was revealed that as part of their agreement not to sponsor initiatives against each other the insurers and the trial lawyers had contractually bound both firms not to work for others.

That leaves the rest of the efforts scrambling for ways to qualify their initiatives. Rosenfield and Zimmerman, as have Burton and Polanco, expressed confidence Wednesday that public outrage over insurance prices would help them succeed without the petition circulating firms.

Others doubt it. Insurance lobbyist Tye said Wednesday that he hears the Burton and Polanco initiatives have been slow to organize and have not yet gathered many signatures. And Steven Miller, head of the Insurance Consumer Action Network, also questioned whether the initiatives would qualify.

The trouble for the insurance lobby and the trial lawyers is that if they wait until March to find out, it will be too late to qualify any of their own initiatives they might desire to use to defend their positions.

Advertisement
Los Angeles Times Articles
|
|
|