\o7 The ramifications of Prop. 103 may ultimately force the voters to re-examine Prop. 103, but only if events create an unstable environment where the auto insurance system is in continuing turmoil.
\f7 --From a secret memo to the insurance industry from its political consultant, Clinton Reilly, three weeks after voter approval of Proposition 103.
One year ago today, California voters took insurance reform into their own hands and passed Proposition 103. But unlike other recent mass uprisings around the world, this was a peaceful revolt.
As citizens of a democracy, Californians have the power to override a corrupted Legislature and pass needed laws simply by going to the polls. So after enduring years of legalized extortion by insurance companies, the people approved Proposition 103, reducing auto, homeowner and other liability insurance rates to 1987 levels, eliminating arbitrary and discriminatory practices and imposing the most stringent controls in the country on this rapacious industry.
The intervening 12 months, however, have revealed that the insurance industry, and its allies in government charged with enforcing Proposition 103 have no more respect for democracy than a Colombian drug cartel. Insurance executives and state Insurance Commissioner Roxani Gillespie ridicule the law as the product of an emotional, unthinking mob that has no place telling insurers what to do.
Addicted to excessive profits and desperate to discourage reformers in other states, insurers have plotted revenge against California: a course of intimidation, coercion and outright lawlessness designed to punish the people for approving 103. The strategy was laid out in the secret memo by consultant Reilly. It concluded, "In defeat, the industry may finally win--if it realizes the opportunity and continues to mobilize its considerable resources."
Resources it has. Consumers should have gotten their 20% rollbacks long ago. Instead, the "good hands people" have shoved their greedy fingers even deeper into our wallets, jacking up rates as if 103 had never existed. Longtime customers have had their policies arbitrarily canceled or have been suddenly reclassified as higher risks, in flagrant violation of Proposition 103. Companies have refused to open their books to independent review, as required by 103, or to participate in the hearings mandated by the new law. And, using millions of dollars of our money, the insurance industry has hired thousands of lawyers--at an estimated $1 million per day--to file legal challenges to the law, to concoct absurd legal arguments to circumvent its requirements or to delay the new regulations. In one particularly reprehensible case, attorneys from the same law firm agreed on behalf of one insurer to comply with a schedule for implementing 103, then turned around and sued on behalf of another company to have the plan invalidated.
