Calif. Insurance Initiative Narrowly Misses Shot at Nov. Ballot

A measure that included new restrictions on how some auto insurers rate policies set for the Nov. 6 ballot failed to reach the signature threshold in a random verifiable sampling last week, leaving an already qualified auto insurance initiative on the upcoming ballot that would have competed against it.

California-based Consumer Watchdog announced in May that the Insurance Rate Public Justification Accountability Act (IRPJA) sponsored by the group had gathered more than 800,000 signatures from voters in the state, far past the 504,000 required by state law to bring a petition onto the ballot for voters’ consideration.

But IRPJA fell short in verifying a random sampling of its signatures by the state’s deadline last week, getting 109 percent of the needed signatures instead of the 110 percent required by state law.

“We simply did not have the resources or volunteer signatures to do it any quicker,” Consumer Watchdog president Jaime Court said in a statement.

Act Would Have Clashed with Other Measure

The main thrust of IRPJA was to establish a prior approval process for health insurers’ rates to promote affordability, much in the same way that auto insurers currently operate in the state.

Another IRPJA provision sought to bar insurers from using whether or not a policyholder had continuous car coverage as a rating factor for auto insurance prices.

That provision conflicted with the Automobile Insurance Discount Act (AIDA), approved in January for the November ballot, which seeks to allow insurers to consider prior coverage history more freely than they currently can. Under AIDA, insurers employing that rating factor will be able to maintain discounts for having prior coverage even when they switch California auto insurance companies. They currently can only offer a renewal discount for drivers staying with the same company.

The ability to honor discounts across insurers would increase competition within the industry and benefit consumers, according to AIDA supporters.

Had both measures appeared on the ballot and passed, state officials would have had to reconcile the opposing provisions in both initiatives.

Campaigns Waged Public Fight

Campaigns and officials backing IRPJA and AIDA had publicly clashed with each other leading up to last week.

Consumer Watchdog released a video last December depicting George Joseph, Mercury chairman and a main AIDA supporter, as “Chairman Grinch” who “loves money more than you know.”

In a March statement, Sen. Juan Vargas (D-San Diego), an AIDA supporter, said he was “extremely disappointed” by Consumer Watchdog’s tactics.

The group “resorted to fear mongering and name calling in an ugly bit of behavior that demeans them as a group and deliberately misleads consumers,” Vargas said.

Even though IRPJA will not be appearing against AIDA on this year’s ballot, Consumer Watchdog officials say it is certain for a vote next year, with control over rates being especially essential in the light of the recent Supreme Court decision requiring all Americans acquire health coverage.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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