He says that this bill allows insurers to charge higher premiums to people who switch insurance.
The difference means, in effect, that insurers would be able to charge higher rates for new customers without prior insurance; that's explicitly barred by the 1988 insurance reform measure Proposition 103,
This is how the Attorney General of the state of California describes the proposition:
The Insurance Commissioner may adopt additional rating factors to determine automobile rates and premiums. Currently, 16 optional rating factors may be used for these purposes. For example, insurance companies may provide discounts to individuals for maintaining coverage with them. Insurance companies are prohibited, however, from offering this kind of discount to new customers who switch to them from other insurers.
This measure allows an insurance company to offer a “continuous coverage discount" on automobile insurance policies to new customers who switch their coverage from another insurer
So the statement that
"charging higher rates to new customers who switch is barred by Prop 103" is a false statement, that is it is a lie. It not only is
not barred by that poposition, it is actually
required by that proposition because extending the
"continuous coverage discount" to those new customers is not presently permitted.
Prop 33 would permit extending the "continuous coverage discount" to new customers and would therefor
permit charging lower rates to new customers who switch coverage.
What Prop 103 does is lock drivers into their present insurer and prevent them from switching to other carriers, because they have the "continuous coverage discount" which they cannot transfer to the new carrier. By allowing the discount to be offered by the new carrier Mercury gains an opportunity to pilfer customers from his competitors nad, in fact, the Proposition does increase the competitiveness of the insurance market in California.
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