California’s Prop. 33 is Bomb-Tossing Battle to the End

By Don Jergler | November 5, 2012

Attack, attack and attack again. That’s been the modus operandi of each side in the Proposition 33 campaign, an initiative on the California ballot that enables automobile insurance consumers to take the loyalty discount they get with their current insurer and shop it around to other carriers.

Consumer Watchdog, a Santa Monica, Calif.-based group whose founder authored California’s Proposition 103, a central law governing auto insurance in California, has attacked the initiative and its primary backer, Mercury Insurance Chairman George Joseph, for being dishonest and for running a campaign that will serve in the end to enrich auto insurance carriers like Joseph. Joseph has personally sunk more than $16 million into Prop. 33, and the narrowly defeated Prop. 17, a similar initiative in 2010.

Alleged dishonesty has also been the cornerstone of attacks from proponents of Prop. 33, the 2012 Automobile Insurance Discount Act, who have conversely portrayed Consumer Watch dog as having self-serving motives.

Consumer Watchdog’s founder authored Prop. 103. Among the proposition’s many changes to California law it yielded the intervenor fee, in which insurers must pay for consumer advocates to intervene in rate hike requests. The fee has been used almost exclusively by Consumer Watchdog since its inception, and has yielded millions of dollars in attorney fees for the group, its detractors say.

Consumer Watchdog’s argument on Prop. 33: It will unfairly punish drivers without prior insurance; it will undermine existing consumer protections in California law.

The Prop. 33 campaign’s argument: It will promote competition among insurers, enable consumers to use their loyalty discount to shop for the best prices and it will protect members of the military serving overseas and those who lost their jobs due to the economy from losing their discount.

In the days, weeks and months leading up to Tuesday’s election both sides kept the press release machinery and propaganda in high gear.

Consumer Watchdog on Monday called upon the publisher of the San Jose Mercury News to send an email to its subscribers “correcting the record” on what Consumer Watchdog characterized as a misleading paid advertisement sent out via email over the weekend that “made it appear that the newspaper editorialized for Prop. 33 when in fact it came out against it.”

Also on Monday Consumer Watchdog founder Harvey Rosenfield sent an email to the media and the group’s backers decrying some of the Prop. 33 campaign’s battle tactics, referring to Joseph as “The billionaire chairman of Mercury Insurance, a company that has consistently misled regulators and broken state insurance rules.”

“Prop. 33 will punish students, seniors, mass transit commuters, even military spouses and veterans,” Rosenfield’s email stated.

An email from Prop. 33 backers that went out in mid-October with the title “Yes on Prop 33 Campaign Blasts Consumer Watchdog As Hypocritical, Money-Grubbing Operation” touted a decision that day by a Sacramento Court Judge denying Consumer Watchdog’s request to be paid by the Yes on Prop. 33 campaign for a lawsuit initiated and lost by Consumer Watchdog itself.

Rosenfield took issue the allegations that Consumer Watchdog sued the Prop. 33 campaign, saying there was no such suit filed by Consumer Watchdog.

Actually, he noted, it was the Prop. 33 proponents who lost a legal battle in August when a judge ruled against a suit by backers seeking to change the wording on the ballot written by opponents, as well as the language from the Attorney General describing what the initiative does.

On Oct. 25 Rosenfield held a press conference as the attorney representing a former insurance agent, who it was revealed during the conference had filed a class action lawsuit in Southern California against Auto Club over an alleged “illegal commission scheme” that penalizes agents who sell policies to people who previously did not have insurance.

Rosenfield made mention at least twice during the press conference that Prop. 33 would make basing prices on someone’s past driving history legal. While Rosenfield said the suit wasn’t timed as a political attack against the measure, backers of Prop. 33 called the timing of the suit “suspicious.”

Prop. 33 spokesman Terry McHale also said the suit by Consumer Watchdog was “consistent with the way they do business. They like to throw bombs. They just throw everything against the wall to see what sticks.”

And few if any subjects were treated as untouchable during the campaign, including discrimination.

Last week Prop. 33 backers sent out an email noting that the Greenlining Institute, which the campaign called “one of California’s most reputable consumer groups,” is supporting Prop. 33 because it lowers rates and makes auto insurance more accessible to the Latinos, African Americans, Asians and other ethnic communities in California.

Around the same time Consumer Watchdog sent out its own statement on how Prop. 33 would impact minorities:

“Proposition 33 would legalize a discriminatory auto insurance pricing scheme and allow insurance companies to raise rates on drivers solely because they had a break in auto insurance coverage,” the statement red. “Drivers having financial difficulties in this recession and those in low-income communities of color will be hardest hit if Prop 33 reinstates the unjust and unfair discrimination that voters banned 24 years ago in California.”

Even international politics has come in to play during the campaign. Consumer Watchdog in September blasted the Prop. 33 campaign over a radio advertisement targeting a military audience, which opponents called on to be removed following the tragedy in Libya where Libyan Ambassador Christopher Stevens was killed along with three others during an attack on a U.S. Consulate in Benghazi.

“They are spitting in the eyes of foreign service officers and other heroes,” Jamie Court, a spokesman for Consumer Watchdog, said at the time referring to the Prop. 33 ads, which noted that military serving overseas will not lose their persistency discount.

Conversely Prop. 33 proponents characterized Consumer Watchdog’s attack on the ads following the killings in Libya as “unconscionable.”

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Latest Comments

  • November 6, 2012 at 5:26 pm
    Center Point says:
    Ummm, election day? Setting aside partisan feelings, if one supports offering discounts to people who do insure -- and by extension debiting those who do not buy insurance but... read more
  • November 6, 2012 at 3:59 pm
    Tawana says:
    How does every issue get back to Obama????
  • November 6, 2012 at 1:50 pm
    Center Point says:
    In a way, it's really not that much different from Obamacare in that those who are insured stand to benefit from a larger insurance pool of paid policies. Those who go without... read more
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