"The controversial stuff doesn't make it all the way," acknowledged a Schwarzenegger aide, who was not authorized to speak publicly on the issue and requested anonymity. "It gets watered down or it gets killed."
In 2004, former Assemblyman Darrell Steinberg, a Sacramento Democrat, introduced a bill that would have barred insurers from refusing coverage to nonprofit developers. Housing activists said the insurance industry was crimping the affordable housing market by engaging in such practices. Insurance companies denied they had done so.
A meeting between the two sides took place July 14. Among the two dozen lobbyists speaking for the insurance industry was Dunmoyer, then president of the Personal Insurance Federation of California. Housing advocates said the lobbyists vowed to kill the bill.
Less than a week later, on July 20, the Schwarzenegger administration sent a letter to Steinberg saying the bill went "too far.''
Fearing defeat, Steinberg changed his bill so it no longer banned the industry from denying coverage to the developers and required simply that the state Department of Insurance study the matter.
Stripped of its original purpose, the measure passed the Legislature, and Schwarzenegger signed it.
When a bill the industry dislikes passes intact, the governor can veto it -- and often does.
Terry Tillery earns $10 an hour working for a state program aimed at helping sick and elderly people remain in their homes. The Sacramento resident cares for three patients, driving her 2000 Ford minivan to supermarkets and drugstores for food and medication.
One day in 2004, she got a letter from her auto insurance company: Her rates would be going up. Her job put her in the same commercial category as a pizza delivery driver, her insurer said, making her a higher-risk driver.
Tillery said she told her insurance company, "I don't speed. My driving record is good, and I haven't had any tickets in the last 14 years."
Assemblyman Gene Mullin (D-San Mateo) offered a bill last year that would have barred insurers from raising rates in circumstances like Tillery's. Among the measure's opponents was the Assn. of California Insurance Cos., which represents 300 property-casualty firms.
Lawmakers passed the bill, but the governor vetoed it. If rates dropped for these workers, his veto message said, echoing arguments made by insurers, then other motorists would be forced to pay more.
