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Group claims Quackenbush let insurance industry collect hefty profits
Ten years after California voters passed Proposition 103 a measure designed to keep insurance costs down consumer groups and insurance industry regulators are still battling over how to implement the law.
The Proposition 103 Enforcement Project a Santa Monica-based consumer watchdog group and Insurance Commissioner Chuck Quackenbush have been duking it out in the courts since April 1998. Quackenbush has vowed to appeal an Alameda County Superior Court ruling that he violated Proposition 103 by allowing auto insurers to base their prices too heavily on where a driver lives.
Most recently, the nonprofit consumer group has accused Quackenbush of failing to crack down hard enough on insurance industry profits. A study sponsored by the Proposition 103 Enforcement Project and conducted by insurance economist Birny Birnbaum claims that California motorists paid $5.2 billion more than they should have in auto liability premiums since Quackenbush took office.
The study, using data collected from the National Association of Insurance Commissioners, found that, on average, California auto insurers enjoyed a profit margin 60 percent higher than the national average. "Commissioner Quackenbush has spent his time and over $1 million of Department of Insurance funds on TV ads claiming he is enforcing Proposition 103. But this data shows that Commissioner Quackenbush is in fact costing California customers billions of dollars each year in excessive auto liability insurance premiums alone," said Harvey Rosenfield, head of the Proposition 103 Enforcement Project.
Rosenfield's organization has long accused Quackenbush of being soft on the insurance industry. While it does not officially endorse any candidate in the upcoming election for Insurance Commissioner, it has compiled an impressive array of damning information about Quackenbush.
Dana Spurrier, Quackenbush's press secretary, disputes the study's findings, noting that auto insurance premiums have fallen for the first time in California history. "Under Commissioner Quackenbush, during the past three years, rates have gone down 5.5 percent for California consumers. Auto insurance rates have gone down for three reasons: first, an open, competitive marektplace; second, Proposition 213; and, finally, the Department's crackdown on auto insurance fraud," said Spurrier. Proposition 213 prohibits drunk drivers and uninsured motorists from suing law-abiding citizens for pain and suffering damages.
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