Monday, December 6, 2021






        California’s ballot initiative process has never been more effective or beneficial to voters (who are also utility customers) than since the strongly consumerist Proposition 103 passed handily in 1988.


        Now the San Diego-based Sixth District state Court of Appeal has brazenly tried to gut a major part of that law, which made the insurance commissioner an elected official and has saved insurance customers more than $110 billion in excessive charges, an average of about $3.4 billion a year.


        No other state has a similar law, and the judges moved to overturn a big part of it in a dispute over delayed car insurance premium refunds from State Farm Insurance resulting from overcharges during the first year of the coronavirus pandemic.


        It’s not only State Farm that’s refusing so far to refund money paid while rates were based on pre-pandemic driving habits. So far, state Insurance Commissioner Richard Lara has asked companies for $5.5 billion in voluntary rebates, but only $1.9 billion has been paid. State Farm’s share of the unpaid $3.6 billion balance due to almost every driver in California comes to about $100 million. The company wants to prevent that payout from becoming mandatory.


        This is one area where part of California’s cost of living should be lower than anywhere else. No other state limits rate increases and allows refunds where justified.


        But the appellate decision maintains voters in 1988 never meant to permit the insurance commissioner to order refunds, as Lara and several previous commissioners have done.


        Voters, said the ruling, were “not concerned about rate manipulation.”


        This was an absurd assertion, since Proposition 103 is almost exclusively about precisely that nefarious practice.


        “We were out to prevent people from getting fleeced by insurance companies,” said Harvey Rosenfield, the Consumer Watchdog lawyer who authored the law. “So this decision could not have gotten the issue more wrong.”


        Rosenfield is appealing the ruling to the state Supreme Court, citing two prior decisions from that court which unanimously upheld the insurance commissioner’s right to order justified refunds.


        But he’s not certain the state’s highest court will even take the case, since several new justices have arrived since the most recent ruling on this issue, repeatedly raised by insurance companies hoping to get a statewide decision exactly like the one from San Diego.


        “Californians passed Proposition 103 to protect themselves against arbitrary rates and discriminatory practices by requiring insurance companies to keep rates and premiums fair at all times or else be accountable to the insurance commissioner,” Rosenfield said.


        But State Farm, Mercury Insurance and some other companies have never stopped trying to return California insurance law to something like what applies elsewhere.


        So far, that effort has failed. But the insurance industry, never short of lawyers, keeps on fighting and the San Diego decision is the most favorable one the companies have ever won.


        The issue of whether insurance commissioners can order refunds is important, but it’s nowhere near as vital as Proposition 103’s giving the commissioner review power over rate increases, a provision that would be at risk if this ruling prevails.


        Amazingly, the San Diego court held that Proposition 103 never intended to protect consumers – despite that being the entire theme of the Proposition 103 campaign and its application for more than 30 years. Rather, the court said voters intended to protect insurance companies.


        Now the only folks who can overturn this astounding, unfounded conclusion are the seven justices of the state Supreme Court.


        Serendipitously, three of them – Chief Justice Tani Cantil-Sakauye, Justice Martin Jenkins and Justice Joshua Groban – are up for voter approval or rejection next fall.


        The three will be subjects of yes-or-no votes on whether each should be permitted to serve another 12 years. If the no side prevails on any of them, that justice would be removed and replaced by a new appointee named by whoever wins the concurrent vote for governor.


        For sure, yes-or-no votes should hinge in large part on how the justices rule on Proposition 103. That’s because any judge voting either not to take the case or to uphold the San Diego decision would essentially be saying the voters’ will counts for nothing.

    Email Thomas Elias at His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit

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