The most expensive ballot measure fight in the nation's history--with more than $60 million being spent on the insurance industry side alone--is winding to a close in an atmosphere of rising emotion and a torrent of insurer-financed mailings.
The industry is focusing its efforts on trying to turn back Proposition 103, a proposal for sweeping rate rollbacks for auto, homeowner, commercial and municipal-liability policies and all-encompassing rate regulation that is backed by consumer advocate Ralph Nader.
With support from state Insurance Commissioner Roxani Gillespie, the industry is saying that Proposition 103 could drive many companies either out of the state or into bankruptcy. Nader, on the other hand, says the measure will only reduce "super gouging" by the companies to "modest" gouging.
The insurers are also continuing to push, mostly in individual insurance company mailings to policyholders, for a no-fault insurance system, incorporated in Proposition 104.
For the Record
Los Angeles Times Monday November 7, 1988 Home Edition Part 1 Page 2 Column 6 Metro Desk 2 inches; 38 words Type of Material: Correction
A Times story on the insurance initiatives Sunday said that Propositions 100, 101 and 106 contain provisions that would preempt other initiatives that pass by fewer votes. In fact, it is Propositions 100, 101 and 104 that contain the preemptions. Proposition 106 does not.
The latest independent polls in the fight over the five insurance initiatives last week continued to show the Nader campaign in the lead--despite being deeply in debt and able to pay for only a trickle of advertising. The campaign managed to raise less than $3 million, far less than any of the other factions.
Also appearing in the polls to have a chance of passing was Proposition 100, an initiative backed by the state's trial lawyers, bankers and various consumer groups that calls for auto insurance rate rollbacks for "good drivers" only, and Proposition 106, an insurer-backed initiative to slash lawyers' contingency fees.
Trailing badly in the independent polls were the the no-fault initiative and Proposition 101, a measure to roll back insurance rates in exchange for limiting company pay-outs that is backed by insurance industry dissident Harry O. Miller, chief executive of Coastal Insurance Co.
At week's end, Clint Reilly, coordinator of the mainstream insurance industry's campaign, denounced the polls and vowed to pursue passage of Proposition 104. A spokesman for the industry's campaign said that thousands of volunteers from the industry are canvassing the state this weekend for Proposition 104 and against 100 and 103. Extensive insurer telephone teams are also at work.
"We have done everything we can think of to prevail," said industry spokesman Scott Carpenter.
On the other side, Nader and two other 103 supporters, state Controller Gray Davis and Los Angeles Mayor Tom Bradley, expressed confidence that their measure will win. "Like the Dodgers, 103 is destiny's child," Davis said. "I think they can spend $100 million and they won't beat 103."
But one of the measure's campaign coordinators, Bill Zimmerman, said he believes it is nip and tuck, with all the negative advertising against it, whether 103 can win. He said that to him it is conceivable that none of the insurance initiatives will muster a majority.
With total outlays in the initiative fight approaching $80 million, more than three times the highest amount ever spent in a California campaign, the insurance industry's traditional adversaries, the California Trial Lawyers Assn., trailed badly in finances.
The trial lawyers have provided more than 70% of the backing--or more than $10 million--for what appears likely to be about a $15-million campaign for Proposition 100.
That measure, among other things, preempts provisions in both Propositions 104 and 106 that would limit lawyers' contingency fees.
The battle over attorneys' fees is a major subsidiary issue in Tuesday's insurance votes. The insurers say they are trying, with the fee limitations, to assure that victims' winning damage awards will get to keep most of their money. Their main vehicle for doing so is Proposition 106, which would limit lawyers' fees to 25% of the first $50,000 of any judgment or settlement, 15% of the next $50,000 and 10% of anything over $100,000.
Foes of Proposition 106 say the fee limitations would drive attorneys out of the field and make it impossible for victims to find competent representation at an affordable price.
The insurance initiatives would do many things. Propositions 100 and 103 would allow banks into the insurance business. Proposition 103 would let voters choose a state insurance commissioner, a post now filled by gubernatorial appointment. Proposition 104 would rule out state rate regulation, while Propositions 100 and 103 would require it. Proposition 101 would require that a victim be compensated first for his losses by his health insurer, rather than his auto insurers.
But most public attention has been focused on the size of the rate rollbacks called for under the various initiatives. In brief, these are the rollback provisions: