You asked what is Proposition 213, how it affects automobile insurance rates, and who opposed its adoption.

SUMMARY

Proposition 213, officially entitled, The Personal Responsibility Act of 1996, was an initiative measure submitted to California voters that limited the right of uninsured motorists, drunk drivers, and felons to sue and recover damages from law-abiding citizens.

In March 1998, Insurance Commissioner Quackenbush attributed a $71 million reduction in rates filed by Mercury Insurance Co. to Proposition 213. Mercury reduced its auto rates by 20% for uninsured motorist coverage and 15% for bodily injury coverage.

Proposition 213 was supported by Mothers Against Drunk Driving (MADD), the California Police Chiefs Association, California Association of Highway Patrolman, Doris Tate Crime Victims Bureau, California Peace Officers' Association, Peace Officers Research Association of California, and the Association for California Tort Reform among others. It was opposed by the Proposition 103 Enforcement Project (this proposition lead to the use of sequential analysis in setting rates) lead by Harvey Rosenfield, Consumer Action, the California Trial Lawyers Association, and United Policyholders.

PROPOSITION 213

The initiative included the following findings and declaration of purpose:

Under prior law, people who suffered an injury in a car accident could sue the responsible person, business, or government in order to recover their losses. Those losses could include both economic losses (such as lost wages, medical expenses, and property damage) and noneconomic losses (such as pain and suffering).

Proposition 213 prohibits the recovery of noneconomic losses in certain accidents. With one exception, an uninsured driver or a driver subsequently convicted of driving under the influence of alcohol or drugs ("drunk drivers") at the time of an accident cannot sue the responsible party for noneconomic losses. They can be sued only for economic losses. An uninsured motorist who is injured by a drunk driver can still sue to recover noneconomic losses from the drunk driver.

The measure also prohibits a person convicted of a felony from suing to recover any losses suffered while committing the crime or fleeing from the crime scene if those losses resulted from some other person's negligence. Convicted felons can still sue to recover losses for some injuries suffered while committing or fleeing a crime (for example losses resulting from the use of "excessive force" during an arrest).

Court Challenge

Immediate implementation of Proposition 213 was delayed because the California Trial Lawyers Association challenged its constitutionality.

The California Second District Court of Appeals upheld the part of Proposition 213 which limits the recovery of pain and suffering damages (noneconomic losses) by fleeing felons, drunk drivers, and uninsured motorists. The challenged portion of the law was the provision applying to uninsured motorists (Yoshioka vs Los Angeles Superior Court).

Rate Reduction

According to Insurance Commissioner Quackenbush, Mercury Insurance Co. reduced its overall auto insurance rates 6.4% as a result of Proposition 213. Mercury customer will pay rates below 1991 levels according to the commissioner (see Attachment).

Quackenbush also claims to have approved a total of 228 auto insurance rate decreases at a savings of $771 million. He states that competition was the key.