Today's discussion is why governments are dysfunctional and I offer you Proposition 17 which is unquestionably the least sexiest item on the June 8 primary ballot in California.
Prop 17 is the Rodney Dangerfield of the June 8 primary.
All the attention is focused on Meg Whitman and Steve Poizner spending millions on television ad attacks for the Republican nomination for governor. Incumbent Democratic Sen. Barbara Boxer is fending off lesser opponents from her own party knowing full well that she will go to the big dance in November most likely against another Republican millionaire in Carly Fiorina.
Essentially, Prop. 17 would allow good drivers to change automobile insurance companies without losing their discounts. Sounds as good as motherhood and apple pie, right? The devil is in the details. Well, let's take a look at the Official California Voter Information Guide, which, as far as these things go, is a good read.
The insurance commissioner regulates automobile insurance companies doing business in the state. Because the elected commissioner and Legislature refused demands from consumer groups, voters in 1988 passed Proposition 103.
The essence of administering Prop. 103 is that its provisions cannot be changed by the commissioner, nor the Legislature, but by another voter state initiative, thus Prop. 17. Progressive democracy at its best, right?
Why, one might ask, did it take 22 years to correct what proponents maintain is a glitch in Prop. 103?
A groundswell of irate drivers, it wasn't.
It was Mercury Insurance Co. It bankrolled 99% of the cost to pay for the signature drive qualifying Prop. 17 for the ballot and to fund the campaign for its approval June 8. That's according to some former powerhouses in state government, former Insurance Commissioner John Garamendi and former Atty. Gen. John Van De Kamp.
Mercury's face is not on this pig. Proponents are listed as Allan Zaremberg, president of the California Chamber of Commerce, and Joel Fox, president of the Small Business Action Committee.
They say the current law does not allow "drivers from taking this continuous coverage discount (under Prop. 103) with them if they switch insurance companies to get lower rates." Yet, they use Mercury's claim that families can save as much as $250 annually in premiums as well as "increased competition" and "more choices and options for consumers" under the cloak of Prop. 17.
The big losers in Prop. 17, the antis argue, are good drivers who drop auto insurance for 91 days for any reason. The largest segment in that group would be our military who serve their country out of state for continued periods of time.
Using Mercury's own numbers, these good drivers would pay up to $1,000 annually in surcharges to renew coverage as required to drive a vehicle in the state.
Nor so fast, argue the proponents. In their rebuttal, they make the following claims:
Prop. 17 eliminates existing surcharges for changing insurance companies; exempts the military serving out of state, protects drivers whose insurance lapsed because of loss of jobs or illness, and preserves Prop. 103 protections in which insurance premium rates are based on driving safety record, miles driven and driving experience.
Whom is one to believe? Mercury Insurance Co., or an affiliation of watchdog groups forced into action?
The answer is in the fine print of exceptions, conditions and qualifications of each driver based on the whims of any given auto insurer whose claims of savings are guesses based on new market conditions that have not been tested.
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EPILOGUE
Auto insurance is big business in California. It collected $19.7 billion amounting to 36% of all insurance premiums collected in 2008 in the state. If Prop. 17 passes, certainly Mercury will not be the only auto insurance company benefiting. The question is whether consumers will. It sill remains this entire process is a travesty. You cannot have good, efficient government when every time you want to make a rule change you must have a vote of an electorate which in California is part of 32 million residents. With Prop. 17, there was no burning drive from the electorate to change the law. For all you (lower case) democrat purists, once a state agency is created, the job of running it is, in this case, the elected insurance commissioner with the overseers being the governor and state lawmakers. Voters still hold the upper hand by outing the elected officials if they don't approve how they are running things. California voters are a piece of work. They approve bond issues for new prisons, rail transit, schools and state-or-the-art embryonic cell research -- all worthy causes -- and then bitch bloody murder when the bonds cost them a fortune because the state's bond rating has tanked from AAA to the bottom of the toilet. They blame it on their elected leaders and the cost of supporting illegal immigrants. Perhaps this outrage should shift to examine their inner selves for they are as much to blame for the dysfunction in Sacramento as anyone. It was California voters, mind you, that changed the state constitution in an initiative passed by a simple majority that required a two-thirds vote by the Legislature to adopt a budget. In California, as is most areas of the country, even motherhood and apple pie would fail to reach a 67% majority threshold.
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