Quit Stalling on Prop. 103

Ten years after California voters revolted against skyrocketing auto insurance rates and passed Proposition 103, the legal wrangling continues over the reform initia tive’s formula for a fair break on premiums. Wednesday, a Superior Court judge in Oakland struck down a pricing plan approved last year by Insurance Commissioner Chuck Quackenbush, saying the insurance companies continue to give too much weight to geographical ZIP Codes in setting premiums.

Quackenbush could appeal, but he should not waste more time on legal challenges. The court will issue its final order soon. At that point, Quackenbush should draft a new plan on an emergency basis--one that better balances the mandates of Proposition 103 and other factors. This delicate balancing has been the No. 1 problem since passage of the initiative, and Quackenbush, the third commissioner since then, is the first to implement its provisions. But supporters of Proposition 103 charge that his actions are heavily influenced by the insurers, whose clout in Sacramento is formidable.

Proposition 103 requires that a motorist’s driving record, years of experience and miles driven annually be the primary criteria in calculating premiums. Until 103 passed, territorial ratings--ZIP Codes--had been a dominant rating factor. Good and bad drivers were lumped together based only on their neighborhood, with the presumption that motorists in poor areas owned less reliable cars and posed higher risks and that congested wealthy areas were lawsuit bait.

A variety of “optional factors� can still be taken into consideration in setting rates, but driving record, experience and miles driven must be paramount. What weight should be given to the optional factors--which include local costs of settling claims--is still a matter of dispute.

The insurance industry maintains that the ruling by Superior Court Judge Henry J. Needham Jr. could mean 65% to 70% of California policyholders would face rate increases if all optional rating factors were eliminated. But instead of crying wolf, surely the industry can come up with more equitable pricing mechanisms and more affordable insurance for more drivers.

Now is the time to act, and Quackenbush should not wait for a call from the insurance lobby to make his move. Rates already are inching downward and company profits are rising as car safety improves. Getting Proposition 103 fully implemented would help to rebuild consumer confidence in the insurance industry. Failing to do so invites more trouble for Quackenbush and his industry supporters.