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Rosenfield on Enforcing Auto Insurance Rollbacks

July 22, 1990

California consumers deserve better than the erroneous rhetoric they're getting from Harvey Rosenfield ("How to Tame the Insurers: No Rollback, No Business," Opinion, July 15). While consumers are unhappy with high auto insurance rates, they flatly rejected Rosenfield's candidate for insurance commissioner--the very office created through his initiative.

Proposition 103 was a poorly written initiative that tried to overhaul the entire system but failed to fully comprehend the consequences. As a result, all it has done is triple the Insurance Department staff and employ hundreds of lawyers to interpret it.

The bottom line is still the same. Auto insurance still costs too much. Prop. 103 was never intended to reduce rates, just go after insurance company profits, which have proven to be illusory. Contrary to Rosenfield's assertions, insurers earned 9.6% return on net worth in 1989, down from 13.6% in 1988. Rosenfield's math just doesn't add up.

Ironically, the longer it takes to enact comprehensive insurance reform the more likely that reform will be no-fault. Ultimately, Rosenfield will convince the Legislature that nothing short of no-fault will work as he proves that increased regulation and bigger state bureaucracy don't reduce the cost of insurance.


Executive Director

Western Insurance Information Service

Los Angeles

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