Saturday, August 24, 1996
Home Edition
Section: PART A
Page: A-23
Insurance Firms Hedge on Resuming Sales;
Coverage: Lobbyist who claimed homeowner policies would be issued in 90 days was speaking
out of turn, companies say. Consumer activist seeks antitrust inquiry.;
By: KENNETH REICH
TIMES STAFF WRITER
Three big insurance companies hedged Friday on when they will resume sales of homeowners
policies, and a consumer leader asked for an antitrust inquiry in the aftermath of
Thursday's legislative deal to create a state earthquake
insurance agency.State Farm, Allstate and Farmers insurance companies all declared in
separate statements that a top industry lobbyist in Sacramento, Dan Dunmoyer, was speaking
out of turn when he gave a flat assurance that sales would resume in 90 days.
Dunmoyer spoke within minutes of an announcement Thursday that Senate Democratic Leader
Bill Lockyer of Hayward and Republican Assembly Speaker Curt Pringle of Garden Grove had
agreed on the final details of the earthquake
insurance bill, virtually guaranteeing its passage.
The West Coast co-director of Consumers Union, Harry Snyder, said Friday that as an
insurance industry lobbyist, Dunmoyer must have known what he was talking about when he
promised that homeowners sales would resume. Snyder
asked the U.S. Justice Department, Federal Trade Commission and state Atty. Gen. Dan
Lungren to investigate.
Snyder charged that the big companies--which together share 53% of the state's homeowners
insurance market--were acting in illegal restraint of trade when they cut off most sales
months ago.
He said their aim was to blackmail legislators into relieving the companies of their
overexposure to paying future quake losses by creating the California Earthquake Authority
and leaving the lucrative homeowners market to the insurance industry.
But state Insurance Commissioner Chuck Quackenbush said Snyder is "whining"
because he has been unable to prevent creation of the quake authority. Quackenbush added
that he hopes and expects the big insurance carriers to resume homeowner sales before 90
days.
Dunmoyer, the lobbyist who had made the 90-day promise, said Friday: "Each company
independently confirmed its desire to reenter the market in legislative testimony, and I
was simply confirming the public record."
But one by one, the companies demurred on the timing.
Farmers said it does not plan to resume until 90 days after the state insurance is
established, which could delay new sales to six months from now.
Allstate said it has not set a date.
State Farm said it would expand its sales, which it said had never fully lapsed, "as
soon as humanly possible" after the earthquake authority starts operations.
Quackenbush said that when the Legislature passes the law creating the authority, probably
next week, he will consider whether to reopen sales under California's FAIR plan to those
who cannot find homeowners insurance in the interim before the big companies resume sales.
Meanwhile, the state Senate, in accord with the deal made Thursday by legislative leaders,
passed amendments to the quake authority legislation on a 32-0 vote.
The amendments will go before the Assembly next week, and then, upon assurances of support
for both amendments and the total bill by Gov. Pete Wilson, the plan of legislative
leaders is to adopt the earthquake authority by the Legislature's adjournment next
Saturday.
Descriptors: LEGISLATION -- CALIFORNIA; HOMEOWNERS INSURANCE;
EARTHQUAKE INSURANCE; INSURANCE INDUSTRY -- CALIFORNIA;
LOBBYISTS;
Copyright (c) 1996 Times Mirror Company
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