Judge Upholds Ballot Title, Summary for Calif. Insurance Initiative

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A California Superior Court judge rejected a bid to dismiss the official ballot label for a statewide automobile insurance initiative, handing a defeat to backers of Proposition 33.

Proponents of the measure to allow insured drivers to take continuous coverage discounts with them from when they change insurance companies had filed a lawsuit against state Attorney General Kamala Harris, Secretary of State Debra Bowen and leaders of Consumer Watchdog, the lead opponent of the proposition.

They alleged that the ballot title and summary for the Nov. 6 vote contain inaccuracies "highly likely to prejudice voters against the measure."

But Sacramento Superior Court Judge Timothy Frawley said Aug. 9 that he found nothing false in the label written by the state Attorney General's office and therefore had no grounds to order a rewrite.

Opponents claimed total victory, noting that the judge also upheld their rebuttal statement in the official ballot pamphlet. "The insurance industry needs to understand that it cannot give voters only the propaganda it wants to share with them," Harvey Rosenfield, the founder of Consumer Watchdog, said in a statement. "The judge appropriately allowed voters to hear the truth about Prop 33: it deregulates the insurance industry and raises rates on good drivers who follow the law."

Foes of the 2012 Automobile Insurance Discount Act have described it as a back-door means of allowing insurance companies to raise rates on drivers who are the most likely to go without coverage for time, including the unemployed and the working poor. Proponents have framed it as improving consumer choice and highlighted consumer-friendly improvements over a 2010 version rejected by voters, such as proportional discounts and allowances for those serving in the military or who are unemployed for up to 18 months.

The official language states that Proposition 33 "changes law to allow auto insurance companies to set prices based on a driver's history of insurance coverage." The measure's supporters claimed this was false, as insurance companies in California do not have free rein to set their own rates. They also objected to the phrase "set prices," saying in the lawsuit that it is commonly used to describe illegal practices.

The Yes on Proposition 33 campaign took heart from the judge's description of the attorney general's wording as not as clear as it could be. "We also believe that Proposition 33 will win on its merits: it will allow consumers to control their discount and shop it with an insurance carrier they choose. It will increase competition between insurance carriers, lower rates and was written to be inclusive and provide incentives for everyone to obtain insurance," spokeswoman Rachel Hooper said in a statement.

More than 99% of the Yes campaign is underwritten by $8.2 million in personal funds from George Joseph, the chairman of Mercury General Corp. The company supports Proposition 33, but has not contributed. The three top writers of private automobile insurance in the state in 2011 – Farmers Insurance Group of Cos., State Farm Mutual Automobile Insurance Co. and Allstate Corp. – are officially neutral.

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