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Re: Fraud - California style

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Posted by tonyba> on January 13, 2000 at 02:38:13:

In Reply to: Fraud - California style posted by tonyb on December 11, 1999 at 16:48:42:


SACRAMENTO, Jan 12 (Reuters) - An insurance industry coalition has raised $44 million to support a
March voter initiative aimed at blocking a new California law that would expand the rights of ordinary
people to sue their insurers, a spokeswoman for the group said Wednesday.

The ``No on 30 and 31'' coalition seeks to persuade voters to torpedo two ballot measures that would
endorse California's new Fair Insurance Responsibility Act, which was approved last year by the state
legislature and signed by Gov. Gray Davis.

The new law, and a companion bill that was also approved by Davis, have been on hold pending an
outcome of the March referendum on the two ballot measures.

According to statements filed this week, the campaign raised about $44 million in 1999 -- far more than
proponents of the measure. That promises to make the battle over insurance suits one of the costliest in
the California since last year's $100 million fight over Indian gambling.

Davis, ignoring loud protests from the insurance industry, signed the bill in October allowing
auto-accident victims to sue the other driver's insurance company for bad faith.

The insurers contend that the new law would open the door to frivolous lawsuits and boost insurance
premiums across the state.

``Our participation in this campaign is a good investment for our policy holders,'' said State Farm
spokesman Bill Sirola, whose company contributed $16.7 million. ``(This law) will absolutely impact our
policy holders on the price they pay for insurance.''

Proponents of the new law, which include some consumer advocates and trial lawyer groups, say it would
bring California's insurance settlements into line with the national average.

``I'm not surprised they are ponying up this kind of (campaign) cash,'' Kelly Hayes-Raitt, a consultant
whose clients favor the new law, told the Los Angeles Times.

``But I'm outraged that insurance companies are spending my premiums on a campaign to mislead their
customers. We are talking about letting good drivers sue bad drivers.''

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