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Insurers, Lawyers Urged to Seek Rate Cut

February 23, 1988|KENNETH REICH | Times Staff Writer

SACRAMENTO — The state's legislative leaders called on the insurance industry and trial lawyers Monday to make sacrifices to lower auto insurance rates and present a plan to the Legislature in time to avert a "war of initiatives" on the November ballot.

But after a Capitol meeting attended by Assembly Speaker Willie Brown (D-San Francisco), Senate President Pro Tem David Roberti (D-Los Angeles), Senate and Assembly insurance committee chairmen and other interested legislators, there was little sign of a willingness on either side to sacrifice meaningfully.

There were reports that insurance and trial lawyer representatives would meet for new closed-door talks this week, but neither Stanley Zax, president of the Assn. of California Insurance Companies, nor J. Gary Gwilliam, president of the California Trial Lawyers Assn., would confirm that such meetings would take place.

Both Zax and Gwilliam refused, under hard questioning from legislators, to express any willingness to give up specific points in such talks, although both said that in principle they are willing to discuss compromise, even while both continue efforts to qualify diametrically opposed auto insurance initiatives for the ballot.

Senate Majority Leader Barry Keene (D-Benicia) and Assemblyman Hershel Rosenthal (D-Los Angeles), both told Zax, Gwilliam and other initiative sponsors that were in the room that they feared the electorate might vote for a solution that might be "cataclysmic" to one side or the other in terms of lost income, should there be no legislative solution.

Five different insurance initiatives are being circulated. Two would bring about changes in the civil justice system that would sharply curtail the trial lawyers' profits from litigating and negotiating auto insurance cases. The three others would roll back insurance rates and/or introduce state rate regulation.

Roberti said that while he hopes the major special interests will be able to agree how they should share sacrifices in their income that will lead to rate cutbacks, he feels that "auto insurance rates must come down no matter who it hurts." He said the issue now "goes beyond the interest groups" and involves, more important, the public interest.

Brown said that he adamantly opposes initiatives as an alternative to legislative action and that he hopes private talks, where posturing will be absent, will lead to a legislative solution. However, neither he nor any other legislator present offered to personally initiate such talks or even help arrange them.

Rosenthal said afterwards that in practical terms, unless the insurers and the trial lawyers can compromise their differences on their own and present the solution to lawmakers, the Legislature will not be able to act on its own.

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