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.