Sacramento Bee

A 2003 state law allowing insurers to discount policies for previously insured motorists was rejected Tuesday by a state appellate court.

Consumer groups feared that the law, Senate Bill 841, would have increased rates on low-income drivers and created more barriers for uninsured motorists to obtain new policies. They argued that it was in direct violation of Proposition 103, a 1988 voter-approved initiative.

It’s unclear whether the ruling will be appealed. Attorney General Bill Lockyer is still reviewing the decision, said his spokesman, Nathan Barankin.

SB 841 was written by Sen. Don Perata, D-Oakland, and signed by then-Gov. Gray Davis. Doug Heller of the Foundation for Taxpayer and Consumer Rights said both Davis and Perata – now the Senate leader – benefited heavily that year in donations from Mercury Insurance, a sponsor of the bill.

Perata spokesman Jason Kinney had no comment on the bill or the ruling by the 2nd District Court of Appeal, which affirmed a Superior Court ruling that
initially tossed out the law.