Proposition Summary

INSURANCE RATES, REGULATION, COMMISSIONER. INITIATIVE STATUTE. Requires minimum 20-percent rate reduction from November 8, 1987, levels, for automobile and other property/casualty insurance. Freezes rates until November 8, 1989, unless insurance company is substantially threatened with insolvency. Thereafter requires every insurer offer any eligible person a good-driver policy with 20-percent differential. Requires public hearing and approval by elected Insurance Commissioner for automobile, other property/casualty insurance rate changes. Requires automobile premiums be determined primarily by driving record. Prohibits discrimination, price-fixing, unfair practices by insurance companies. Requires commissioner provide comparative pricing information. Authorizes insurance activities by banks. Summary of Legislative Analyst's estimate of net state and local government impact: Would increase Department of Insurance administrative costs by $10 to S15 million in first year, varying thereafter with workload, to be paid by additional fees on the insurance industry. State and some local governments would have unknown savings from lower insurance rates. Gross premium tax reduction of approximately $125 million for first three years offset by required premium tax rate adjustment. Thereafter, possible state revenue loss if rate reductions and discounts continue but gross premium tax is not adjusted.

Proposition Number

103

Year

1988

Document Type

Proposition

Pass/Fail

Pass

Popular Vote Results

Y: 4844312; A: 51.13; N: 4630752; B: 48.87

Election Type

General Election

Proposition Type

Initiative statutory

Relevant Case

Fireman's Fund Ins. Co. v. Quackenbush, No. 92-15861: 1996 U.S. App. LEXIS 19493, 9th Cir. 1996; Dudley v. Government Emples. Ins. Co., No. 91-15717: 1993 U.S. App. LEXIS 1703, 9th Cir. 1993; Guaranty Natl. Ins. Co. v. Gates: 916 F.2d 508, 9th Cir. 1990; United States v. Cannabis Cultivators Club: 5 F. Supp. 2d 1086, N.D. Cal. 1998; Fireman's Fund Ins. Co. v. Garamendi, No. C-91-2854-CAL, No. C-91-2855-CAL: 1992 U.S. Dist. LEXIS 3306, N.D. Cal. 1992; Fireman's Fund Ins. Co. v. Garamendi: 790 F. Supp. 938, N.D. Cal. 1992; Proposition 103 Enforcement Project v. Quackenbush, S072613 : 1998 Cal. LEXIS 6090, 1998; Quelimane Co. v. Stewart Title Guar. Co.: 19 Cal. 4th 26: 960 P.2d 513: 77 Cal. Rptr. 2d 709, 1998; Professional Eng'rs in California Gov't v. DOT: 15 Cal. 4th 543: 936 P.2d 473: 63 Cal. Rptr. 2d 467, 1997; Amwest Surety Ins. Co. v. Wilson: 11 Cal. 4th 1243: 906 P.2d 1112: 48 Cal. Rptr. 2d 12, 1995; In re Brown: 12 Cal. 4th 205: 906 P.2d 1184: 48 Cal. Rptr. 2d 29, 1995; Manufacturers Life Ins. Co. v. Super. Ct.: 10 Cal. 4th 257: 895 P.2d 56: 41 Cal. Rptr. 2d 220, 1995; 20th Century Ins. Co. v. Garamendi: 8 Cal. 4th 216: 878 P.2d 566: 32 Cal. Rptr. 2d 807, 1994; Gerken v. Fair Political Practices Comm'n: 6 Cal. 4th 707: 863 P.2d 694: 25 Cal. Rptr. 2d 449, 1993; Farmers Ins. Exch. v. Super. Ct.: 2 Cal. 4th 377: 826 P.2d 730: 6 Cal. Rptr. 2d 487, 1992; Raven v. Deukmejian: 52 Cal. 3d 336: 801 P.2d 1077: 276 Cal. Rptr. 326, 1990; Travelers Indem. Co. v. Gillespie: 50 Cal. 3d 82: 785 P.2d 500: 266 Cal. Rptr. 117, 1990; Calfarm Ins. Co. v. Deukmejian: 48 Cal. 3d 805: 771 P.2d 1247: 258 Cal. Rptr. 161, 1989; California Ins. Co. v. Deukmejian, Nos. S007838, S007840, S007841, S007846: 1988 Cal. LEXIS 589, 1988; VPS Management, Inc. v. Pacific Rim Assurance Co.: 71 Cal. App. 427: 83 Cal. Rptr. 2d 772, 1999; Barret v. Dawson: 61 Cal. App. 4th 1048: 71 Cal. Rptr. 2d 899, 1998; Economic Empowerment Found. v. Quackenbush: 65 Cal. App. 4th 1397: 77 Cal. Rptr. 2d 390, 1998; Proposition 103 Enforcement Project v. Quackenbush: 64 Cal. App. 4th 1473: 76 Cal. Rptr. 2d 342, 1998; Americans v. State: 51 Cal. App. 4th 724: 59 Cal. Rptr. 2d 416, 1997; Cates Constr., Inc. v. Talbot Partners: 53 Cal. App. 4th 1420: 62 Cal. Rptr. 2d 548, 1997; County of Alameda v. Pacific Gas & Elec. Co.: 51 Cal. App. 4th 1691: 60 Cal. Rptr. 2d 187; Economic Empowerment Found. v. Quackenbush: 57 Cal. App. 4th 677: 67 Cal. Rptr. 2d 323, 1997; Fireman's Fund Ins. Cos. v. Quackenbush: 52 Cal. App. 4th 599: 60 Cal. Rptr. 2d 732, 1997; Pala Band of Mission Indians. v. Board of Supervisors of San Diego County: 54 Cal. App. 4th 565: 63 Cal. Rptr. 2d 148, 1997; Yoskioka v. Super. Ct. of Los Angeles County: 58 Cal. App. 4th 972: 68 Cal. Rptr. 2d 553, 1997; Miller v. Super. Ct. of San Francisco County: 50 Cal. App. 4th 1665: 58 Cal. Rptr. 2d 584, 1996; Pacific Mut. Life Ins. Co. v. State Bd. of Equalization: 41 Cal. App. 4th 1153: 49 Cal. Rptr. 2d 99, 1996; RLI Ins. Co. Group v. Super. Ct. of San Francisco County: 51 Cal. App. 4th 415: 59 Cal. Rptr. 2d 111, 1996; State Farm Fire & Cas. Co. v. Super. Ct. of California for Los Angeles: 45 Cal. App. 4th 1093: 53 Cal. Rptr. 2d 229, 1996; Wilson v. Fair Employment & Hous. Comm'n: 46 Cal. App. 4th 1213: 54 Cal. Rptr. 2d 419, 1996; Wolfe v. State Farm Fire & Cas. Ins. Co.: 46 Cal. App. 4th 554: 53 Cal. Rptr. 2d 878, 1996; Schimmel v. NORCAL Mut. Ins. Co.: 39 Cal. App. 4th 1282: 46 Cal. Rptr. 2d 401, 1995; Schmidt v. Foundation Health: 35 Cal. App. 4th 1702: 42 Cal. Rptr. 2d 172, 1995; Manufacturers Life Ins. Co. v. Super. Ct.: 32 Cal. App. 4th 821: 33 Cal. Rptr. 2d 424, 1994; Manufacturers Life Ins. Co. v. Super. Ct. of San Francisco: 23 Cal. App. 4th 1629, 1994; Amwest Sur. Ins. Co. v. Wilson: 40 Cal. App. 4th 225: 25 Cal. Rptr. 2d 611, 1993; Barnes v. State Farm Mut. Auto. Ins. Co.: 16 Cal. App. 4th 365: 20 Cal. Rptr. 2d 87, 1993; Sequoia Ins. Co. v. Super. Ct.: 13 Cal. App. 4th 1472: 16 Cal. Rptr. 2d 888, 1993; State Compension Ins. Fund v. State Bd. of Equalization: 14 Cal. App. 4th 1295: 18 Cal. Rptr. 2d 526, 1993; Allstate Ins. Co. v. Gillespie, No. B050439: 1992 Cal. App. LEXIS 194, 1992; Safeco Ins. Co. v. Garamendi: 27 Cal. App. 4th 400: 14 Cal. Rptr. 2d 621, 1992; Wilshire Ins. Co. v. Garamendi: 5 Cal. App. 4th 1573: 8 Cal. Rptr. 2d 55, 1992; California Auto. v. Garamendi: 232 Cal. App. 3d 904: 283 Cal. Rptr. 562, 1991; California Auto. v. Garamendi: 234 Cal. App. 3d 1486: 286 Cal. Rptr. 257, 1991; California Auto. Assigned Risk Plan v. Gillespie: 23 Cal. App. 4th 975: 280 Cal. Rptr. 217, 1991; National Indem. Co. v. Garamendi: 233 Cal. App. 3d 392: 284 Cal. Rptr. 278, 1991; Sanford v. Garamendi: 233 Cal. App. 3d 1109: 284 Cal. Rptr. 897, 1991; AIU Ins. Co. v. Gillespie: 222 Cal. App. 3d 1155: 272 Cal. Rptr. 334, 1990; Allstate Ins. Co. v. Gillespie: 225 Cal. App. 3d 798: 275 Cal. Rptr. 525, 1990; Dairyland Ins. Co. v. Gillespie: 223 Cal. App. 3d 1229: 273 Cal. Rptr. 80, 1990; Maler v. Super. Ct. of Los Angeles City: 220 Cal. App. 3d 1592: 270 Cal. Rptr. 222, 1990; Beatty v. State Farm Mut. Auto. Ins. Co.: 213 Cal. App. 3d 379: 262 Cal. Rptr. 79, 1989; Kennedy Wholesale, Inc. v. Board of Equalization: 227 Cal. App. 3d 228: 265 Cal. Rptr. 195, 1989; Kincaid v. Mangum: 189 W. Va. 404: 432 S.E.2d 74, 1993; State Farm Mut. Auto. Ins. Co. v. State: 124 N.J. 32: 590 A.2d 191, 1991

Code Sections Affected

Added Cal. Ins. Code sections 1861.01, et seq., 12900, and 12979, Added Cal. Rev & Tax Code section 12202.1, Repealed Cal. Ins. Code sections 1643, 1850, 1850.1, 1850.3, 1852, 1853, 1853.6, 1853.7, 1857.5, 12900, and 1854, et seq.

For Author

Ralph Nader, Consumer Advocate; Harvey Rosenfield, Chair, Voter Revolt to Cut Insurance Rates/Proposition 103

Against Author

Kirk West, President, California Chamber of Commerce; William Campbell, State Senator, 31st District Chairman, Joint Legislative Budget Committee; David Davreux, Author, Consumers' Guide to Auto Insurance

Rebuttal Author

Alister McAlister, Former Chair, Assembly Finance and Insurance Committee; Ed Davis, State Senator, 19th District; Kirk West, President, California Chamber of Commerce

Rebuttal Against Author

Harvey Rosenfield, Chair, Voter Revolt to Cut Insurance Rates/Proposition 103

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