Interesting LA Times article on Prop. 33

[petronius]

Prop. 33 is billionaire's attempt to manipulate public policy

George Joseph must think that the old saw defining insanity as doing the same thing over and over and expecting a different result doesn't apply to him — or at least that it's amenable to tweaking.

Joseph, the billionaire nonagenarian founder and still kingpin of the insurance company Mercury General Group, is represented on November's statewide ballot as the promoter and virtually sole bankroller of Proposition 33. This initiative would allow auto insurers to offer discounts to drivers who have maintained coverage without a break, which is known as "persistency."

That sounds innocent — what ballot proposition doesn't? But it's a significant change in the law, which currently allows auto insurers to offer such discounts only to customers who have maintained unbroken coverage with their current carrier, not with others. The difference means, in effect, that insurers would be able to charge higher rates for new customers without prior insurance; that's explicitly barred by the 1988 insurance reform measure Proposition 103, which has led to sharp reductions in California auto insurance premiums overall.

-- Snip --

http://www.latimes.com/business/la-fi-hiltzik-20121021,0,507978.column

This is one of those things I hate about our proposition system - a potentially misleading change to a law, with complex implications, is not something that should be decided this way...

[Live and Learn]

1. Our proposition system is out of control.

It really irks me to have to decipher what they actually mean and you know most people don't bother and just vote on their gut instincts or ads. It is really problemsome.

[SoapBox]

2. Ditto to what you said below...

"This is one of those things I hate about our proposition system - a potentially misleading change to a law, with complex implications, is not something that should be decided this way..."

It really is criminal and should be against the law, to intentionally miss lead the citizens and voters.

[KamaAina]

3. Props 31, 32, 38 and even 39 are also billionaires' attempt to manipulate public policy

(or at least multi-millionaires' ) And to think, a century ago, the ballot initiative was considered a progressive reform, taking power back from a legislature that was bought and paid for by the Big Four robber barons. The difference back then was that there was no such thing as a saturation media buy.

[IndyJones]

4. That doesn't make sense, though.

We get calls from other carriers all the time. Sometimes I even listen to their pitch, which typically will offer me the same coverage for less money. Why would they call me in the future to steal my business away from my current carrier in the future if they will try to charge me more? If I have had insurance for many years uninterrupted, seems like they will want to try to beat my current rates, no?

I guess I need to go read up!

[pinboy3niner]

6. The Stop Prop 33 site has a lot of information

Check out the fact sheet links (lower right on the home page) and the information on Mercury's troubling history.

http://stopprop33.consumerwatchdogcampaign.org/

[JayhawkSD]

5. Interesting conflict in the author's own statements here

The author praises Prop 103 and the protection it offers against higher rates, saying that Prop 33 is an effort to reverse those protection and allow higher rates for drivers who switch insurance carriers. He says that under Prop 103 length of time with current carrier cannot be used in determining the premium rate charged.

But it's a significant change in the law, which currently allows auto insurers to offer such discounts only to customers who have maintained unbroken coverage with their current carrier, not with others. The difference means, in effect, that insurers would be able to charge higher rates for new customers without prior insurance; that's explicitly barred by the 1988 insurance reform measure Proposition 103

But then he describes Proposition 103:

Proposition 103 barred the basing of auto rates on anything other than a driver's safety record, years of driving experience and miles driven annually. It allowed other factors that could be shown to have a substantial relationship to the risk of loss, including a driver's longevity with his or her current carrier.

So by the author's own statements Prop 103, and current california law, does actually allow the longevity with current provider to be a factor in deciding the premium rate charged and Prop 33 would seek to ban that permission and base it only on the continuity of insurance coverage itself, regardless of carrrier.

The new insurance carrier could charge a higher rate if they wanted to, but why on Earth would they do so? They aren't going to pirate much business from other insurers by charging higher rates.

[JayhawkSD]

7. The author Michael Hiltzik is a liar and a fraud.

He says that this bill allows insurers to charge higher premiums to people who switch insurance.

The difference means, in effect, that insurers would be able to charge higher rates for new customers without prior insurance; that's explicitly barred by the 1988 insurance reform measure Proposition 103,

This is how the Attorney General of the state of California describes the proposition:

The Insurance Commissioner may adopt additional rating factors to determine automobile rates and premiums. Currently, 16 optional rating factors may be used for these purposes. For example, insurance companies may provide discounts to individuals for maintaining coverage with them. Insurance companies are prohibited, however, from offering this kind of discount to new customers who switch to them from other insurers.

This measure allows an insurance company to offer a “continuous coverage discount" on automobile insurance policies to new customers who switch their coverage from another insurer

So the statement that "charging higher rates to new customers who switch is barred by Prop 103" is a false statement, that is it is a lie. It not only is not barred by that poposition, it is actually required by that proposition because extending the "continuous coverage discount" to those new customers is not presently permitted.

Prop 33 would permit extending the "continuous coverage discount" to new customers and would therefor permit charging lower rates to new customers who switch coverage.

What Prop 103 does is lock drivers into their present insurer and prevent them from switching to other carriers, because they have the "continuous coverage discount" which they cannot transfer to the new carrier. By allowing the discount to be offered by the new carrier Mercury gains an opportunity to pilfer customers from his competitors nad, in fact, the Proposition does increase the competitiveness of the insurance market in California.