The Los Angeles Times reported Saturday that auto insurance experts agree that Insurance Commissioner Chuck Quackenbush is allowing insurers to illegally use ZIP code as one of the prime determinants of auto insurance rates, in violation of Proposition 103 and his own auto insurance regulations promulgated pursuant to the 1988 initiative.
Last Thursday, Quackenbush permitted new auto insurance plans, which were supposed to force insurer compliance with Proposition 103‘s ban on ZIP code-based territorial rating, to take effect, despite the testimony of the Proposition 103 Enforcement Project in public hearings that insurers were breaking the law.
Proposition 103 requires that mandatory factors — 1) driving safety record 2) annual mileage 3) years of driving experience — count more than all other factors, including ZIP code, in the determining of auto insurance rates. The Commissioner can allow for the use of other optional factors, but these cannot count more than any of the first three mandatory factors.
The Times report demonstrates how insurers have statistically manipulated Quackenbush‘s regulations so that ZIP-code or territory, an optional factor, has a larger impact on premium than any of the mandatory factors — keeping the pernicious territorial rating system banned under Proposition 103 in tact.
“Commissioner Quackenbush has abdicated his responsibility to enforce the law by allowing insurance companies that have contributed millions to his campaign fund to illegally charge consumers based on where they live, not how they drive,” said Harvey Rosenfield, author of Proposition 103 and executive director of the Proposition 103 Enforcement Project. “This blatant violation of Proposition 103 must not be allowed to stand. The Commissioner must reverse himself in light of the overwhelming evidence of insurers’ continued use of territorial rating in violation of Proposition 103 and his own regulations. This is not a controversy that Mr. Quackenbush will be able to duck, but one which will continue to haunt him. This is a defining moment for Quackenbush‘s administration and the voters will hold him accountable for any further delay.”
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