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Tussle Over Language of California Prop. 17

SACRAMENTO (CN) - California approved misleading ballot statements about Proposition 17 to discourage its passage in the June primary, a proponent claims in Superior Court. Prop. 17 involves "persistency discounts" for auto insurance; the plaintiff demands, among other things, that the statement "Californians will pay more for auto insurance" be stricken.

Plaintiff Christina Wilson challenges statements such as this one, from the ballot pamphlet: "Proposition 17 changes our laws to favor big insurance companies like Mercury Insurance, the initiative's sponsor, while hurting responsible drivers who have done nothing wrong. (Emphasis in original.)"

Wilson claims the ballot pamphlet makes misleading statements about the so-called "persistency discount."

Under current law, insurance companies can offer the discount only to people who have had continuous auto insurance coverage with the same company. Wilson says the regulations preclude people from taking a persistency discount with them when they change insurers. She says that "Prop. 17 merely allows the currently insured to transfer their discounts to another insurer."

She also objects to the statement: "Proposition 17 will result in a surcharge for California drivers."

Wilson claims that switching insurance companies will not necessarily result in a surcharge, and asks that the statement be stricken and revised to state: "'(T)he impact Proposition 17 will have on each of an insurers' customers is difficult to predict.'"

Wilson also challenges the claim that Prop. 17 will drive up the cost of auto insurance and punish returning soldiers who let their auto insurance policies lapse. Wilson says Prop. 17 actually makes military personnel eligible for a persistency discount even if their policies lapse while they are overseas.

She says it is difficult to predict how the new regulations will affect insurance rates; she asks that the statement "Californians will pay more for auto insurance" be stricken.

Wilson is represented by Richard Martland with Nielsen Merksamer.


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