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Gillespie Now Believes Prop. 103 Can Help Slice Insurance Prices

June 18, 1989|KENNETH REICH | Times Staff Writer

Insurance Commissioner Roxani Gillespie, who had expressed fear before last fall's election that Proposition 103 could bankrupt many insurance companies, said Saturday she now believes that the measure is proving to be a useful catalyst in the search for lower insurance prices.

"If Proposition 103 had not passed, we'd still be doing what other states are doing about rising insurance costs--nothing," Gillespie declared in a speech to a policy conference at the Stouffer Concourse Hotel sponsored by the Insurance Consumer Action Network.

But now, she declared, with the state Supreme Court having mandated changes in the standards for exempting companies from the 20% rate rollbacks--making it plain that companies will not be forced toward bankruptcy--Proposition 103 is having an "encouraging" and even "exciting" effect.

Gillespie, who last week filed papers with state election officials indicating her intent to run for insurance commissioner when the office becomes an elective post next year, told a luncheon on the closing day of the two-day conference that California ought to "move on" from the implementation of Proposition 103 to do something to stem rising claims costs.

One answer, she contended, is to add to the Proposition 103 changes a no-frills, no-fault automobile insurance policy of the kind proposed recently by a coalition of minority groups and the chairman of the Assembly's Insurance Committee, Patrick Johnston (D-Stockton).

Before Gillespie spoke, however, people attending the conference from both the insurance industry and the California Trial Lawyers Assn. said that Assembly Speaker Willie Brown (D-San Francisco) will mount a major effort this week to sidetrack the no-frills, no-fault proposal and put in its stead a low-cost policy that would maintain the present system of resolving fault in accidents, when it is contested, through litigation.

Gillespie, like many Republicans, supports no-fault, a system that curtails litigation and mandates that policyholders collect from their own insurance companies for their injury costs, regardless who is at fault in an accident. Brown, like many Democrats, opposes no-fault and supports the present litigation system.

In a speech to the conference Friday, state Atty. Gen. John K. Van de Kamp, who has opposed no-fault, called for more cooperation between the insurance industry and the trial lawyers, traditionally bitter rivals on insurance issues. The insurers want no-fault and the trial lawyers do not.

"We are not entering an age of tranquility" as Proposition 103 goes into effect, said Van de Kamp, a prospective Democratic candidate for governor. "But there may be new forms of cooperation we can pursue."

Gillespie on Saturday cited statistics showing that Los Angeles drivers are inclined to report many more injuries per numbers of accidents than elsewhere in the state and nation, and to be more likely to take claims to the courts. She said a no-fault system might succeed in changing this pattern.

Van de Kamp did not discuss the no-fault issue in his speech.

The conference brought together nearly 100 representatives of virtually all the major factions in the insurance issue. Much of the meeting was devoted to panel discussions of various components of the auto insurance cost problem.

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