News Scrapbook 1988

San Diego, CA (San Diego Co.) Evening Tribune (Cir. 0. 123,064)

SEP 14 1988

SEP 15 19 Jlll..' • , . c. I

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F.sr. ,au Said to Mask Profits With .A:ccouhting Gimmic~ / Propotition 101 backer spurns forum , A chief su~~?er of Proposition have tried to structure the symposi- the rules ?f the symposmm ~e:e :e- selea, did not quarrel with Insurers' need to ------------------------~--------. 101 one of five auto-insurance initia- um in such a way that we could pro- buffed by its sponso~\He .\.as reserve enough money to cover the maximwn f hv~s to be decided by voters in the vide a fair thorougn and informative conta~ted b~ckers o t e O ~r mi ia- Could Affect Election potential pay-out on claims already reported Auto Insurance Cla1·ms Pro 1'ts November election has withdrawn examination of these very complex tives, mcludmg Nader and OConnell, but ~ot paid. "But I do question the arbitrary , from a University ~f San Diego Law initiatives that California voters will and asked_ them to boycott the event. (estimates) of IBNRs," he added. Cal"f . F' ·, Review s m sium on the proposi- face this fall. Adm1ss1•n to the s_ymposmm, to What are the reaSOll8 for the apparent dis- 1omia 1gures , f /· po. . ha ke s of the "It JS our mtentJOn to shed some begin at 7 p.m. in Cammo Theater on parity between claims-paid history and Insur- 1---------------------------------1 1tohns an is urgtindg )'kc r light on these i ues which have gen- the campus, is free, but advance tick- ers' projected payments O • in t . . o er measures o o 1 ew1se , ed ByTOM RESSLAR in a given year? Answersne~~ums e ec Claims PaidHistory Harry Miller, a former chief depu- erat~~ more he t than light up to this ets;:s~::1~~ns 'may be SACRAMENTO - "IBNH" looks llke an ab- "The real answer Is, 'Who knows?' " said ty state insurance commissioner and pom_. . 11' 260 _4650 brevlatlon Cora nuclear weapon. JayAngoff,formerlyoftheNationallnsurance currently chief executive officer of 1tller said h~ attempts t,o change ca mg · But you won't discover It In any nation's Consumen Organization. Year Premiums Written Claims Paid Percentage Paid the Coastal Insurance Co., announced 1trategic arsenal. Instead, It Is an accounting Part oftbe answer, he added, is that insurers Per Premium · his withdrawal from the Sunday w pon, Wied, critics say, In an Insurance In- "believe their own press releases" with chill- 118Z $ 2,842,235,000 $ 1,783,100,000 62.7 symposmm in a prepared •tatement dustry propaganda campaign designed to mis- ing horror stories about huge liability claims. 1983 3,063,874,000 2,035,497,000 66.4 yesterday Inform consumers. 11 Th;lnsurers'responsetothis, saidAngoff,i.s 1184 3,509,118,000 2,335,561,000 66.6 Miller said the format of the sym- po;!1eed~;!~~~tand for "Incurred but not re- ~J'ofeo!i~n~~t;~ ~;1e,i;i~ Califor- ;::: t:~:~:;: t!:~::;:: : : posium favored two high-profile Los Angeles.CA (Los Angeles Co.) Times In Industry parlance, that translates into the nla~al L&.'1i'¼'eP!J1\ssoclation, sai msurers, speakers: consumer adv

increase in claims paid between 1982, 1986:

professor Jerome O'Connell, an ex- pert m no-fault i urance. They favor Propos1t1ons 103 and 104. Those two speakers were allocated thr~ tmtlallves were be1~g allotted 10;inut~each, M1~ler ~1d. f th oms, aDc mg Lean Schol e ran calledMillers ~cription of symposium format "completely Univel]_1ty of San iego aw oo, the discuss the historv of the concept of no-fault insurance and a need form- surance revision and then will spend about 30 minutes fielding questions from backers of the variom mitia- t~ves. He said the r~mamm~ mitia- ll~e backers th n w1U be. given 15 mmutes each toe plam their propos- "We regret that Mr. Miller feels this way and will not participate in the symposium" Morris said. "We . . . . . . . als. bo t h h to resent their a u anh'lourbeack Pf th othe cases,. w. 1e ac ers O • e r inaccurate" . · . , Moms sa_1d Nader and _o Connell,

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diet they will p y to settle unreported claims He described the Increases In projected losses w on policies that are In effect In any given year. a& a "skyrocketing trend in gue or " ln The relatively obscure concept will play an which insurers "compound their own mis- Important role In the debate over auto Insur- takes" by basing each year's IBNR losses on ance reform In California, where voters will be the previoUJ years' ln.Oated estimates. Consumer advocates and triallawyers argue one possible source of lnflated loss projections that auto Insurers use the JBNR concept. to lsthealleg~onsandcomplalntsfiledlncourts unddeniddJtale th Ir pronu, oventate their losses for auto air dent cases. "Plalntdiffs hirochutinely e drlv rs with uf\lustifted rate hikes. overstate the damages," he sai , w may They say Insurers have ln.Oated their pro- lead lnsuren to over-reserve for future losses. rel Uon lo their actual claims-paid history. Claim• Have IncnHed, Say Insurers Since IBNH lo es are one factor used by carrl· Mooney of the Insurance Information Insti- en to I t rates, critics say consumers wind up tute said projected losses have increased fairly paying the price wh n projected losses are dramatically because of an "expansion of Ii- an Jected Joa es rrom clalmsdlsproportlonatelyln The lack or ov rslght of the Industry in Call- Mooney ~d the number of ~aims per l~0 fomia, critics charge, allows this process to can In California rose from 1.9 lII 1985 continue unch eked. The alleged Inflation of 1987. But many clnlms, he noted, do not anvolve IBNR losses rurth r Illustrates the need for litigation. , public oversight of the Industry's rate-setting Whatever the cause of the sharp rise in auto pr ctices, according to proponents of two ofthe Insurers' estimates offuture claims payments, raced with four competing ballot lnitlaUvea on the ubject In November. Robert Fellmeth of thl' U11brecsity of San JllM2.'..s Center for Public Interest Law said Inflated, both the number and size of auto accldent Critic Ch rge Lack or Oversight claims have risen sharply.

Percenta

SEP 15 1988

&oun:e: Beot', Executive Data &er,,1eo

' Cla,·ms

--o•iect,·ons

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Percentage Per Written Premium

Premiums Written - Future Claims

Year

/ Uni~~~n Diego got a head~r from. Mike Brille 39 seconcls mlo the second overtime penod to I ad the host Toreros past Cal State Fullerton, 2-1. Leo Ronces opened the scoring at the 41:57 mark, assisted by Brendan Griffin and Andrew Kummer. Full rton's Paul Oldham scored the tying goal at 56,34. USD goalie Doug Wedge made a divmg save to send the ball mto overtime, deflecting a 12-foot shot from Steve George that w- s headed for the lower left comer of the goal. Brille's game-winner came after Kummer's shot was deflected by the Fullerton goalie.

$ 2 , 009 , 460 , 100 2 , 325 , 480 , 300 2 , 814 , 312 , 600 3,B29,826, 2 oo 4587 219 ooo 15,566,298,000 ' ' '

$ 2, 842 , 235 , 000 3 , 063 ,874 , 000 3 , 509 , 118 , 000 4,479,329,000 5,377,748,000 19,272,304,000

1982 1983 1984 1985 1988

70 _7 75 _9 80.2 85.5 85.3 80.8 128.0

Total

payments between 1982, 1986;

Percentage increase in projected

Source: Belt'• Executive Data Service abU1ty." Particularly since 1985, he added, 1-------------------------------i will be allowed 15 minutes each to the symposrnm' keynote speakers,

Auto/'Pronerty Casualty Proi:ts (1987)

a •

•

t'

9 -2 m Underwriting Loss Investment Gain

Net Income

Federal Tax

•.

AUTO

San Diego, CA (San Diego Co.I Evening Tribune (Cir. D. 123,064) EP 198

-$155,000,000

$119,000,000

$986,000,000

$1,022,000,000

ALL PROPERTY-CASUALTY

critics contend it has several undesirable First - andf~remostforCalifornia\.'ODEum- ers who were hit with an average 4i V<'!\.-ent the increases have allowed ;'}Surers to

reform Initiatives on the November ballot. 1''urthrr, critics soy IBNR lo ses should not coruiequences. be counted as losses on Insurers' annual ln·

$ 02 4 • 4 ,000,000

$S 7S,OO0,OO0

$

2 • 789 • 000 •000

$S&O,OOO,OOO

Note: Underwriting loss includes claims actually paid and projec~ claims payments.

come tat ments.

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Th y note the mon y Is not actually spent by boost In auto Insurance rates betwe.-~ :9<14 and Jnsuren ta pay c:1alml in a reporting year In,1986 - e!idition, IBNR losses actually generate In- Inflate rate hikes, critics say. Thal Is because

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F.st, 1888

come for In urers, critics add, because the the more insurers can count as losses, the passes, insurers would be required to file data and cite the availability of their annual state- money Is placed Into resr.r-,e accounts, which greater jusWicatlon they have to hike premi- on their projected claims payments, along with ments at the Department of Insurance. companies use as in..-.. ·tment funds. um prices. other information, to justify rate hikes. She But insurance lno1•~try representatives de- added at if lncreas · 1B losses , matllmal·Appro es fend their use of tho c.oncept. 'InOated Reserves' industry officials contend, " not that big a deal, They contend Propositions 100 and 103 are 'I'hey argue It Is an appropriate accounting SaidAngoff, "Their rates are based (in part) then they have nothing to worry about." irrational approaches to the auto insurance method that helps companies remain solvent on these ln.Oated reserves." The Insurance Consumer Action Network Is crisis because they reduce rates without ad- by en uring they reserve enough money to cov- But Mooney said IBNR losses, in particular, the sponsor of Proposition 100. Said Miller, the dressing the cost factora that have caused er all future losses from claims. account for "practically :r.ero" when Insurers group's executive director: "The problem Is rates to climb. Proposition 103, In particular, And IBNR losses, Industry officials say, are determine auto Insurance rates. But he did say insurers are Immune from public accountabil- would force many California Insurers out of a relatlY1!1y minor factor In setting auto Insur- that IBNR losses play a greater role in setting lty." The provisions or Proposition 100, In par- business, they say. ance rates. rates for the bodily iajury liability portion of Ucular, would require insurers to justify the The industry ill backing a competing initia- They contend recent upsurges in projected auto premiums than for the property damage appropriateness of IBNR losses and all the live Proposition 104. That measure would es- lo es are Justified by Increases In the number portion. The bodily iajury premium accounts other factors they use to raise rates, he added. tabli.sh a no-fault auto insurance system in and size or auto accident claims And Industry for about 60 percent of the total premiwn. The CTLA supports Proposition 100, and California under which iajured drivers collect r prea ntatives say over-Inflation of IBNR Mooney said the argument that Insurers use Glennon said one effect of the measure would from their own Insurers, regardless of fault. loss s Is prevented by regulatory agencies, in- IBNR losses to Imposewtjustified rate hikes on be to require insurers, "when they full a num- The measure would reduce the number of eluding the Internal Revenue Service. con.swners "doesn't make any sense." ber out of their head, to verizy it.' auto accident cases that go to court, propo- But criliC3 contend there should be a sflltlstl- The IRS would look askance at Insurers who nents say, thus reducing Insurers' legal costs. cal link between Insurers' claims-paid history "Inflated reserves beyond what they should 20o/o Rate Rollback That justifies the Initiative's provision calling and their projected losses from claims. It be," he said. Proposition 103 calls for a 20 percent rateforatwo-year,20percentreductionlnthebodi- would make no aeru:e, they say, for actual lnOatedreserves,critlcsagree,alsoserveto rollbacklnallliabllityratesfromtheirNovem-Jy iajury and uninsured motorist portions of claims paid to remain fairly con.stant at the Increase rates indlrectly in another way. The ber 1987 levels. Both Propositions 100 and 103 auto premiums, Industry officials say. same time projected payments Increase more money insurers place in reserve, they provide for a 20 percent rate discount for good But critics say Proposition 104 would severe- dramaUeally. note, the less they have available to underwrite drivers. ly limit htjured drivers' legal rights by restrict- And that appears to be what has happened In policies. That shrinks supply, which, In turn, The disproportio~te increases In mNR d ing their ability to sue the negligent drivers California, according to data compiled by increases prices, they reason. reported claims reserves said Angoff !'Is :e who caused their iajurles. The measure also BeS t '• Executive Data Service. The debate over the reserves insurers set reason why the 20 perce~t (across-th~board) limits th e ability to collect pain_ and suffering Betwe~n 1982 a~d 1986, the percen~ge of id to t' atedfutureclaims industry rollback in 103 isJ'ustified,, damagesandcapsattomeycontlngencyfeesln total wntten premium dollars that California as. e pay es un ' · auto cases. auto insurer11 paid in claims Increased only cnUcs say• hi~ghts th e need to red uce and And HarveyRosenfield, campaign chairman And perhaps most Important, Proposition sllghlly, from 62.7 percent to 64.5 percent. In :;esi:::i~~ msuran~:s~n!'ioo ~i::r~ for Proposition 103, added, "Proposition 103 is 104 critics note most of the measure ls devoted total dollars, the amount grew 94.4 percent, 1nJ d th t uld ll b going to require insurers to open up their books to canceling provisions in Propositions 100 and from $1.783 bllllon to $3.466 billion. t u e Pdl'OVISl?ns ubaliwo . ro ra ta~ and prove they need every rate increase It 103 that would regulate rates, require public ra es an reqwre p c review o ra e 10- d th fre . · . In ts d d th · f:luring the same period, the percentage of crease requests. means an en to e reign they have had ~view o! rate cr:ease reques , an en e • wntten premium do~ars set aside to pay pro- Under current law, insurers, by and large, for all these ~ ·. . . md~try s exemption, frorp state and 1'~~ . jected future claims Jumped from 70.7percent are not required to justify rate increases, and Industry officials ms1St thell' books are open, antitrust laws. ,·· , to 85.3 percent. In total dollars, the amount do not even have to file their rates with the · • · Increased 128 percent, from $2.009 billion to state Department of Insurance. · ---- $4 587 billion. Judith Bell, special projects coordin~tor for Elect1·on on New Ja1·1 S1"tes Sought the West Coast office of Conswners Union, re- Two Types of Losses called that when the liability insurance crisis But Scan Mooney, senior vice president of first surfaced in 1986 industry officials and the Ins ra i n Institute noted that consumer advocates debated whether the in- futu losses in~lude both pro;ec e payments dustry was profitable. on unsettled claims already reported and esti- mated payments on unreported claims Profit, or Loss? (IBNHl. Conswner advocates contended then that IBNR losses, he said, accounted for only part California insurers - including ·auto carri- SANTA ANA - Santa Ana city offi-1ired of being a dwnping ground for every pro- cials called on the Board of Supervisors Mon- posal that comes along." day to let voters decide the fate of an "uajust" Supporters say a centralized jail would re- initiative that would require alljails to be built duce traffic problems, minimize the cost of in Santa Ana, the county seat. transporting prisoners and provide more safe- At its meeting today, the board will consider ty for residents In the remote canyon area near placing the Taxpayers for a Centralized Jail Yorba Linda, Anaheim, Fullerton and Placen- initiative on the June 1990 ballot or accepting tia. ' • ·• the measure as a county ordinance. • However, opponents argued that transporta-

ummer camp, - Uq1vereity of San Diego's camp sessions: Graaes 2-7; sports campnm"'"ages 8-18; all-sports day camp for l ages 7-13; baseball camp; outd~r camping. ! Information: 260-4684. d<.15~ f

Vista, CA

(San Diego Co.) The Vista Press (Cir. D. 7,676 (Cir. S. 7,967)

San Marcos, CA Courier (Cir. D. 3 ,205)

e 19sa

SEP

SEP 16

~l/e,i', P, C 8

...Alic,.'•

F.st, 1888

P. C. 8 far. 1888 Nader to debate no-fault

cess to Justice Foundation and head of "Voter Revolt to Cut Insurance Rates." (This is the proposition that Nader is sup- porting.) Propositions 104 and 106 will be advocated by Sam Sorich, an insurance industry rep- resentative. An advocate for Proposition 101 and a moderator for the panel discussion had not been named at press time. Grant Morris, acting dean of the law school, said this program "will provide a desperately needed focus on these issues of state and national importance. The discus- sion and debate should enable us to make rational decisions on these momentous ini- tiatives when we vote in November. Edmund Ursin, a Jaw professor who .helped organize the Sept. 18 event and an expert in tort law, said, "the stakes arena- tional. If insurers, trial lawyers or con- sumer activists prevail in California, simi- lar techniques will undoubtedly be employed across the nation." USD Law Professor Robert Fellmeth, one of the original "Nader's Raiders" and an organizer of this conference, pointed out that the ad campaigns for the five proposi- tions is expected to cost more than any po- litical campaign in American history, with the exception of the 1984 presidential race. "Insurance companies have announced they will spend $43 million against the in- surance reform measures and for no-fault," said Fellmeth, who is also director of the USO Center for Public Interest Law. "Trial lawyers and others (public interest groups) will spend $10 to $15 million in opposition." The San Diego Law Review, a USO law school publication, will publish a transcript of the debate and an in-depth analysis shortly after the event. For more information, please contact John Nunes at 260-4682.

Cust~era~ivist Ralph Nader and Uni- versity of Virginia Law Professor Jeffrey O'Connell will square off September 18, in what is being billed as perhaps the best presentation of the controversial November ballot no-fault, insurance and tort reform initiatives that California voters will have the opportunity to witness. The SD Ia~school-sponsored event is free and open to the public, but tickets are required for. admission. For tickets, please call 260-4650 ader is considered the leading public in- terest attorney in the nation, while O'Con- nell co-authored the 1965 book the sparked the movement toward adoption of automobile no-fault compenstion plans by 24 states. The hour-long Nader/O'Connell debate will be followed by a half-hour of uestions and a panel dtScuss on examimng the Califorp· initiatives on the November 7 ballot th... :;ieal with no-fault automobile in- surance, regulation of insurance company rates, practices and antitrust status, as well as attorney compensation in accident cases. Nader and O'Connell have been at the forefront of no-fault insurance, tort and in- surance reform for the past 25 years. O'Connell has backed no-fault as a means to lower insurance costs. Nader has opposed no-fault concepts and favors insurance reform, including removing the current in- surance exemption from antitrust law, pro- viding for rate regulation where competi- tion is lacking and guaranteeing consumer representation in insurance rate-setting proceedings. During the panel discussion: Proposition 100 will be covered by at- torney Harvey Levine, president-elect of the California Trial Lawyers Association, which has endorsed Prop. 100. Proposition 103 will be reported on by Harvey Rosenfield, executive director, Ac-

ofthe $1.8 blUlon in projected property-damage ers - were making a healthy profit in compar- losses reported by California auto Insurers In Ison to the national average . Industry 1987. representatives, Bell added, countered that the But the figure for losses on the bodily injury op~site was the case. liability portion of auto premiums was much 'Abig part ofthe debate was IBNRs and how larger. Mooney said the total projected bodily (Insurers) played with them," said Bell. The 11\fury llablllty claims payments totaled $4.392 controversy, she added, "showed acc!ounting billion for California auto Insurers in 1987, a principles are really important in this battle. It portlonofwhlchwasnllocatedforIBNRlosses. becomes one of the central points of the Steven Miller, executive director of the In- debate." sll);ance Coosumec Ac_tlo9 Network o! Lo~ Beil noted that if Proposition 100 or 103

The initiative was spearheaded by a group tion of inmates would not be an issue because opposing construction of a 6,700-bed, maxi- the jail would house Inmates who've already mum-secuirty jail in Coal-Gypsum Canyon. been sentenced , In a City Hall nr-,;,:; conferecce;-s<,me City · Council members s. ~I th-'- ' • · · ·

'or best results 1geles Dally Journal Classified 625·2141

community already 91s l by housing the Orange C "Santa Ana has mon share," Councilman Rot

San Diego, CA (San Diego Co.) San Diego Un ion (Cir. D. 217,089) (Cir. S. 341,840) SEP •719B8

Snn Diego, CA (San D1e90 Co.) San Diego Union (Cir. D. 217,089) (Cir. S. 341,840) SEP 14 1988

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'JIii - -------'---~---~- ---~~~-~- '• &.llUffl P, C. 8 F.sr. l&U

./ ~~pe~lrortet further damage

..A/lot I ,. C I for LOCAL BRIEFS

touchdown late m the third quarter, freshman running back Charles Tau- moepeau scoring on a 19-yard run. It his on_ly carry of ;he game. USD fmtShed with 155 yards total offense. "Offensively, we were mediocre," Fogarty attributed the slow start to the Toreros' switch to the wing-T formation, a misdirection type of of- fense. "The wing-T is a timing type of offense, and our timing's just not In addition, sophomore quarter- back Brendan Murphy is re,urning from off-season shoulder surgery._He was 4-of-10 for 40 yards agamst Fogarty said. there," he said.

make it 17-12.

are relieved to be facing anyone but

With only a few minutes left,

Menlo College.

times USD has Menlo used another 54-yard pass

The last two

.

from big plays

play to move to USD's_ 10. Clark scored again from the 1 with 1:22 left to give the Oaks the victory. "The big play was the maJor fac- tor," Fogarty said. "Other than those three plays, they did very little." USD's offense didn't do much, ei- ther. The Toreros' first touchdown came in the second quarter on a furn- ble recovery in the end zone by de- fcnsive back Mark Crisci. Just before halftime, USD moved to a first-and-

played, it has lost heartbreakers to Menlo. The first came in the Toreros' 1987 finale. Menlo won, 17-15, to keep USD out of the Division Ill playoffs. Last Saturday, in the season open- er for both, Menlo rallied from a 17-6 fourth-quarter a~fi:.il to edge visiting USD 18-17. Ali three Menlo touch- dow~s came on or followed long Having scored on a 54- •ard pass in the first quarter, the Oaks stunned USO on the opening play of the fourth, returning a kickoff 76 yards t USD's 8. Moments later, quarter- gains.

By Ken Stevens Staff Writer

. Tonight at 7:30, USD will play it3 home opener against Claremont Mudd. Claremont Mudd returns 16 start- ers from the team that was co-cham- pion of the Southern California Inter- collegiate Athletic Conference. Gone, however, is running back Chris Da- brow, leading rusher in Division Ill last year. "The) were a throwing type of team until (Dabrow) came along, and like that again," USD coach Brian Fogarty said. Junior quarterback Mike Pem- broke leads Clarem1>nt's offense. Last year, Pembroke passed for 682 yards and was second to Dabrow with 545 yards rushing. USD beat Claremont. 23-7, last year. This will be Claremont's open- er. we expect them to be

and Jim Morrison

goal at the 1 -

ended up missing a 17-yard field-goal

Menlo.

attempt on fourth down.

l

Community college 1occer - Craig G1angr gor10 had two goals and an a I t m the Cuyamaca men's 4 I non conference victory over Orang Coast at Grossmont College. Cuyama 1 3-0, Orange Coast 2-1.