Capitol Alert

The latest on California politics and government

By Torey Van Oot
tvanoot@sacbee.com

Backers of a proposed initiative on auto insurance rates say they have collected more than 800,000 signatures in hopes of placing their measure on next year's ballot.

The proposal, backed by a leading auto insurance industry group, would allow companies to consider coverage history when determining rates for new customers. Supporters argue the change would give companies the option of offering motorists who want to switch providers so-called "loyalty" discounts now available only to current customers.

The proposed initiative is similar to insurance industry-backed Proposition 17, last year's failed ballot measure. Supporters have updated the text of this version to address concerns about the effect such a change would have on members of the military and young drivers.

Mike D'Arelli, American Agents Alliance's executive director who submitted the initiative, said the measure would fix a currently broken system.

"It is ridiculous that the consumer loses the discount they have earned if they go to a new insurance company," D'Arelli said in a statement. "We strongly believe that allowing the consumers to control their discount will create a more competitive and cost-effective insurance market."

Opponents have argued that the change would actually increase rates for more consumers, allowing companies to hike premiums for motorists who went through a period of no coverage. A group opposing the change has countered with its own proposed initiative that includes a provision prohibiting insurers considering a lapse in coverage when determining rates.

Election officials will conduct a raw count and check the validity of submitted signatures. Backers need to submit 504,760 valid voter signatures for the proposal to quality for the November 2012 ballot.

RELATED POSTS:
Prop. 17 supporters submit new auto insurance rate initiative
California group files health insurance regulation initiative



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