zens by laws; and guarantee citizens of In July, Voter Revolt dispatched can- INTRODUCTION California access to a fair and efficient vassers to begin gathering signatures on system of justice. a new voter initiative that would amend Each regulatory agency of In 1988, AJF and its campaign com- the Insurance Code and the Code of Civ- California government hears mittee-the Voter Revolt to Cut Insur- il Procedure to establish a state-operated from those trades or industries it ance Rates-sponsored and qualified nonprofit auto insurance company in respectively affects. Usually Proposition 103, the only one of four California. (See CRLR Vol. 10, No. I organized through various trade competing insurance reform initiatives (Winter 1990) p. 20 for background associations, professional lobby- approved by the electorate in the information.) Voter Revolt said it is ists regularly formulate positions, November 1988 election. launching the new "Proposition 103 draft legislation and proposed AJF publishes a bimonthly report, Enforcement Act" signature drive to rules, and provide information as Citizens Alliance, on citizens' rights protest the delays in implementation of part of an ongoing agency rela- issues and actions at the local, state, and Proposition 103, which have been tionship. These groups usually federal levels. Legislative, judicial, and caused by the insurance industry's unre- focus on the particular agency administrative activities which impact lenting legal challenges to every clause overseeing a major aspect of their on the public justice system and the of the initiative and every regulation business. The current activities of exercise of citizens' rights are a major issued by the Department of Insurance. these groups are reviewed as a focus of the organization's research and This is the second attempt to qualify part of the summary discussion of educational activities. AJF is funded by such a measure for the ballot, the first each agency, infra. grants and individual memberships. having failed earlier this year. If the There are, in addition, a num- group obtains 372,000 valid voter signa- ber of organizations which do not MAJOR PROJECTS: tures, the initiative will appear on the represent a profit-stake interest in Along with many other consumer June 1992 ballot. Under the measure, the regulatory policies. These organi- groups and public interest organizations, state-run auto insurance system would zations advocate more diffuse AJF and Voter Revolt have almost given be formed by September 1, 1993, but interests-the taxpayer, small up hope that Proposition 103 will ever be only if the private insurance industry business owner, consumer, envi- implemented by present Insurance Com- refuses to reduce its rates in accord with ronment, future. The growth of missioner Roxani Gillespie and Gover- Proposition 103's rollback standards, regulatory government has led nor Deukmejian. Disgusted with almost adjusted for inflation, and only if more some of these latter groups to two years of delays, stalling, refusals to than 15% of motorists remain uninsured. become advocates before the reg- act, and noncompliance with the initia- Voter Revolt believes that the "Cali- ulatory agencies of California, tive, most consumer groups have aban- fornia Non-Profit Insurance Fund"-the often before more than one agen- doned their participation in ongoing public insurance system to be created by cy and usually on a sporadic Proposition 103 hearings before the the initiative-would reduce insurance basis. Department of Insurance, and will await costs to consumers because there would Public interest organizations the election of the new commissioner in be no high executive salaries to pay, and vary in ideology from the Pacific November to renew their efforts to com- surpluses and reserves would be unnec- Legal Foundation to Campaign pel enforcement of the 1988 initiative. essary. The Fund would be accountable California. What follows are In an August 6 letter to Insurance to the public through a board of public brief descriptions of the current Commissioner Gillespie, Voter Revolt members appointed by the Insurance projects of these separate and demanded that Gillespie call off sched- Commissioner and subject to recall by diverse groups. The staff of the uled hearings which would grant rate policyholders. Voter Revolt hopes to col- Center for Public Interest Law increases to some of the state's largest lect a total of one million signatures with has surveyed approximately 200 its grassroots network in eleven field such groups in California, direct- insurers-at least until Gillespie has ordered the companies to first roll back offices around the state and hundreds of ly contacting most of them. The citizens who have volunteered since the following brief descriptions are their rates as required by Proposition 103. Speaking at a Los Angeles news idea was first announced. only intended to summarize their Another initiative being considered conference, Voter Revolt Chair Harvey activities and plans with respect by Voter Revolt Rosenfield said, "Once again, it looks is the "Fair Share Prop- to the various regulatory agencies erty Tax Initiative." The measure is in California. like Roxani Gillespie is trying to under- designed to solve California's housing mine Proposition 103 and allow insur- crisis and reverse the rapid decline of ance companies to raise rates, even local government services. The initiative though she still has not implemented any would split the property tax "roll" portion of Proposition 103, passed by between property used for domicile and ACCESS TO JUSTICE voters over twenty months ago." Voter property used for profit. No changes FOUNDATION Revolt also complained that insurers would be made to the tax on residential 3325 Wilshire Blvd., Suite 550 have failed to comply with Proposition property; however, the tax rate on non- Los Angeles, CA 90010 103's requirement to supply information residential property would be increased (213) 383-9618 to consumer groups so they can chal- from 1% to 2.2%. This change would lenge insurer expenses, pricing, sales result in new revenues totalling $9.5 bil- Access to Justice Foundation (AJF) is practices, and other matters which would lion yearly. Of that revenue, $4.6 billion a nonprofit, nonpartisan citizen advoca- justify denial of a rate increase applica- would be used to give California fami- cy organization established to inform the tion. A judge hired by Gillespie to over- lies a $500 annual tax break; $2 billion public about the operation of the legal see the hearings recently refused to order per year would be spent on three new system; provide independent, objective the insurers to open their books and sup- housing programs that would benefit research on the protection accorded citi- ply the requested data. first-time buyers, low- and moderate- The California Regulatory Law Reporter Vol. 10, No. 4 (Fall 1990) PUBLIC INTEREST ORGANIZATION ACTION income tenants, and the homeless; and ADVOCATES for related information.) Committee) brought a federal lawsuit $1.9 billion per year would be made The six basic principles of the plan are: challenging the Plan as being unenforce- available to local governments. (See (1) universal coverage, regardless of able and based largely on unproven tech- CRLR Vol. 10, No. I (Winter 1990) pp. age, sex, health status, or ability to pay; nology. The court agreed, and ordered 20-21 and Vol. 9, No. 3 (Summer 1989) (2) comprehensive benefits including EPA to impose its own plan on the basin, p. 10 for background information.) all health and related social services to which includes the counties of Los Voter Revolt is also considering join- prevent, diagnose, and treat disease and Angeles, Riverside, Orange, and San ing with children's advocacy groups to disability, including long-term care Bernardino. coordinate support for a proposed initia- health services for chronic illness; In its July 31 announcement, EPA Children's Act" for (3) progressive financing based on stated that the SCAQMD Plan is tive known as "The "extraordinarily the 1992 ballot. The measure was draft- ability to pay; ambitious and coura- ed by Robert Fellmeth, Director of the (4) economic efficiency to assure geous," but agreed that some of the mea- Center for Public Interest Law and the maximum results for funds invested, and sures adopted do not contain legally Children's Advocacy Institute. Voter control over inflation in health costs; enforceable commitments or are not Revolt asserts that 1.5 million children (5) publicly guided allocation of technologically feasible. EPA also noted (about 21%) in California live in pover- health resources, assuring access for all that it would not have imposed its own ty, while more millionaires per capita Californians to facilities and services; plan on the Los Angeles basin had not live here than in any state or nation and the environmental groups' lawsuit suc- around the globe. The Children's Act (6) accountability to consumers, ceeded. would add a surcharge to the income tax including full disclosure of the costs and EPA's plan derives heavily from the of the wealthiest Californians and allo- quality of care provided under the sys- SCAQMD Plan, but also includes some to benefit chil- tem. new approaches. These include possible cate the funds generated "no-drive" days for commuters dren in poverty. The Act creates a 2.5% after additive to gasoline surcharge on joint income above 1996; an alcohol $400,000, and a 3% surcharge on joint during winter months to reduce carbon AMERICAN LUNG emissions; stricter rules for income above $800,000. The surcharges monoxide would only affect income in excess of ASSOCIATION OF CALIFORNIA federal vehicle fleets: and new controls on hydrocarbon emissions from oil these amounts rather than all income P.O. Box 7000-866 the taxpayer is taxed. The Redondo Beach, CA 90277 tankers. upon which conceding that the federal surcharges would raise almost $2 billion While (213) 378-3950 implementation plan is a step forward, per year for children's programs.