Total Victory: Judge Upholds Attorney General’s Ballot Label & All Consumer Advocates’ Ballot Arguments That Prop 33 Deregulates Insurance Rates
Sacramento, CA -- Sacramento Superior Court Judge Timothy Frawley rejected in full arguments in a lawsuit by the insurance industry backers of Proposition 33 and upheld the Attorney General’s Ballot Label as “Changes Law to Allow Auto Insurance Companies to Set Prices Based on a Driver's History of Insurance Coverage.”
Frawley also upheld all statements made by consumer advocates against the initiative in the ballot pamphlet, including those that Prop 33 would deregulate the insurance industry and raise rates for good drivers across the state.
“I don’t find anything false,” stated Judge Frawley. “I just don’t see it.”
“The quarrel the petitioners have with the argument comes down to a difference of opinion,” Frawley stated.
“The insurance industry needs to understand that it cannot give voters only the propaganda it wants to share with them,” Harvey Rosenfield, author of Prop 103 and founder of Consumer Watchdog, who was sued over the ballot argument. “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.”
"I'm grateful that the judge recognized that the opponents of the Mercury measure have the right to make their case against it to the voters," said James Harrison of Remcho, Johansen & Purcell, LLP, representing consumer advocates.
Proposition 33 is funded 99% by George Joseph, whose company, Mercury Insurance, sponsored a nearly identical initiative (Proposition 17) just two years ago. It was rejected by the voters despite $16 million in campaign spending by Mercury.
Lawyers for consumer and senior advocates who authored the ballot arguments against Prop 33 explain that Mercury was misleading the court by failing to acknowledge that the ballot initiative would repeal a civil rights protection against redlining enacted by voters in 1988.
Prop 33 will increase premiums for Californians with perfect driving records who stop driving and have a lapse in insurance coverage for good reasons – such as going back to school, a serious illness, long-term unemployment or using public transit.
“Proposition 33 will literally undo a critical part of the regulatory scheme governing automobile insurers by nullifying Insurance Code section 1861.02(c), which bars the practice of basing premiums on a motorist’s absence of prior insurance, and it will also nullify the Insurance Commissioner’s regulation that enforces that statutory bar,” according to advocates’ brief. “By nullifying the express prohibition against consideration of prior insurance coverage [in current California law] and authorizing prior insurance coverage as a rating factor, Proposition 33 will require insurers that use the new rating factor to impose surcharges along with any discounts.”
The fact that Prop 33 will give insurance companies new power to increase premiums for good drivers led the California Democratic Party to vote to oppose Prop 33 at its Executive Board meeting last month.
Joseph and his company Mercury Insurance have waged a decades-long war in the legislature and the courts against the consumer and civil rights protections enacted by voters in Proposition 103. In 2010, state regulators revealed that the company was found to be violating numerous state laws including the provision of law that Joseph now seeks to repeal. Mercury has a “deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference,” according to a brief filed by the California Department of Insurance in an administrative lawsuit against Mercury. The initiative's official proponent, Michael D’Arelli, is an executive in a Sacramento insurance lobbying group comprised primarily of Mercury insurance agents, and is the official spokesperson for the Mercury measure.
“Mercury lost this campaign gambit to try and hide the truth from voters, but we have no doubt they’ll be back with the same lies and deception in a multi-million dollar campaign of TV and radio advertising backed by a horde of paid PR hacks and phony endorsers,” said Carmen Balber of Consumer Watchdog Campaign, the advocacy arm of Consumer Watchdog, a non-profit, non-partisan organization founded in 1985.
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For more information visit our website: http://www.StopProp33.org.
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