Insurers Attempt 11th Hour End-Run Around Proposition 103’s Good Driver Reforms

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Assemblyman Knowles Flouting the Legislative Process With Last-Minute Amendments to Gut Good Driver Discount

In these final days of the 1995-96 legislative session, the insurance industry is launching a sneak attack on the good driver protections mandated by Proposition 103, the voter-enacted insurance reform initiative. Regulations implementing the 1988 reforms are scheduled to go into effect in the next few months, lowering rates for good drivers statewide. The attack against the long-awaited reforms is being led by elected officials who are flouting the legislative process by amending an unrelated bill on the Assembly floor today. In just two days, the current legislative session will end and this is the last day to amend bills.

Assemblyman David Knowles (R-Placerville) has submitted proposed language to subvert Proposition 103‘s auto rating reforms through an amendment to S.B. 1646. However, it is possible that another Senate bill could end up as the vehicle for the industry’s assault on 103. Knowles’ proposed language would overturn Proposition 103‘s requirement that auto insurance rates be based primarily upon a driver’s safety record, as opposed to other factors such as a driver’s age, sex, income level or ZIP code. Prior to Prop 103, insurance companies often based rates exclusively upon such factors and often redlined whole communities. The legislation seeks to nullify recent Department of Insurance regulations lowering rates for good drivers and implementing nearly all of Proposition 103‘s auto insurance rating reforms.

The attempt to gut Proposition 103‘s auto rating reforms is a last-ditch end-run around the legislative process. Two prior attempts to kill the reforms either failed or languished in committee. A prior bill authored by Knowles, AB 341, failed in the Assembly last February by a vote of 50 – 22, 4 votes shy of the 2/3 margin needed for passage. Senator Steve Peace (D-El Cajon) subsequently picked up the legislation in his bill, S.B. 1433, which languished in legislative committees.

The insurer-backed anti-reform legislation will brought up again today, where industry lobbyists will wage a final press for the bill to succeed. “Despite previous failures to squelch Proposition 103‘s good driver protections earlier in this session, the army of insurer lobbyists continue to stalk the people’s law in the Capitol corridors in the eleventh hour,” warned Diane de Kervor, Staff Attorney for the Proposition 103 Enforcement Project. “They are calling in favors from legislators beholden to insurance industry money to lead the assault against Proposition 103, hoping that their misdeeds will be hidden by the flurry of activity at close of session.”

In addition to providing a 20% discount for good drivers, Proposition 103 also requires that driving safety record, miles driven annually and years of driving experience count more than any other factors, including ZIP-code, in determining auto insurance premiums. The proposed amendments to S.B. 1646 threaten these reforms and will raise rates for good drivers statewide.


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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