Gov. Davis Derails Mercury Money Train, Protecting Motorists & Military

Santa Monica– FTCR tonight praised Governor Davis for his veto of SB 689 (Sen. Perata), legislation sponsored by Mercury Insurance. The bill, which was opposed by Insurance Commissioner Harry low, consumer groups and civil rights groups, would have allowed insurers to alter drivers’ insurance rates according to their prior insurance status, which is illegal according to voter approved Proposition 103.

Mercury Insurance, whose CEO George Joseph, through campaign contributions, has repeatedly tried to undermine Proposition 103 in Sacramento, contributed more than $1 million to politicians and their causes during the legislative session. State Senator Don Perata, the author of SB 689, received $25,000 from Mercury before he gutted an unrelated bill in order to insert Mercury‘s proposal. Mercury also contributed $25,000 to Governor Davis after the bill was passed by the legislature.

FTCR President Harvey Rosenfield and senior consumer advocate Doug Heller said:

“SB 689 was an attack by one insurance company, Mercury Insurance, on consumer protections contained in voter-approved Proposition 103, the 1988 insurance reform initiative. By vetoing SB 689, Governor Davis derailed the Mercury money train, and protected motorists against auto insurance surcharges that would have particularly penalized the poor and armed forces personnel now serving overseas. In the process, Gov. Davis acted to safeguard the initiative process against an attack by greedy and unscrupulous special interests which have no respect for Democracy or the will of the people.”

If enacted, the bill would have raised auto insurance rates for drivers who have a lapse in their insurance coverage, such as soldiers called up for duty and low-income drivers looking to get into the insurance market. Additionally, most consumers would have seen their “Uninsured Motorist” premiums increase because SB 689 would have left more drivers uninsured.

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