News Scrapbook 1988

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

SEP 14 1988

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vide a fair, thorough and informative examination oi these very complex initiatives that California voters will "It is our intention to shed some bghtontheset ues,wh_1chhavegen- er~te~. more heat than light up to this • face this fall.

tiv~s to be decided by voters in the November election has withdrawn ro~ a mversi_ Y O Review symposmm on the propos1- an iego a~ othermeasurestodolikewise. Harry Miller, a former chief depu- ty state insurance commissioner and currently chief executive officer of the Coastal Insurance Co., announced f u . •t 'f s D' L t· d . . b k f th Miller ttd th ~ f~r~a\~~~h;r~~; spea ers: consumer a v<><;a Nader and Umversity of V1rg1ma law professor Jerome O'Connell, an ex- pert in no-fault in urance. They favor Propositions 103 and 104. Those two speakers were allocated backers of_ the 0th er thr~ 1mhat1ves w~re be1~g allotted 10 mmutes each, Miller said. Grant Morris, acting dean of the Unive® of San Diego Law School, called Mi!Ter~ription of the symposium format "completely Morris said Nader and O'Connell, the symposium's keynote· speakers, will be allowed 15 minutes each to discuss the history of the concept of no-fault insurance and a need for in- surance revision and then will spend about 30 mmutes fielding questions bake . of the various initia- t!ves. He said the remamm~ mitia- t1~e backers then w1_ll be .given 15 mmutes each to explam their propos- "We regret that Mr. Miller feels this way and will not participate in the symposium " Morris said. "We f ~om c rs . . . .. als. poSmkm avore w d t • R 1 h . a P t th · about an ~our each to presen eir cases,, inaccurate" . · . his withdrawal from the Sunday symposium in a prepared statement t d yes er ay. . ,

Could Affect Election

reserve enough money to cover the maximum potential pay-out on clalms already reported but ~ot paid. "But I do question the arbitrary (estimates) or IBNRs " he added. ers'projectedpaymentsonpremlumsineffect in a given year? Answers vacy. "The real answer Is, 'Who knows?' " said JayAngoff,formerlyoftheNatlonal lnsurance Wh t th ' . a are e reasons for the apparent dis-

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and asked them to boycott th ~ event. · sion to the symposium, to begin at 7 p.m. m Cammo T ea er on m us is free but advance tick- Ad mis . . h t

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"IBNR" looks like an ab-

SACRAMENTO -

Miller said his attempts to change

breviatlon for a nuclear weapon.

But ~ou won't discover It ln any nation's Consumers Organization. strategic arsenal. Instead, It Is an accounting weapon, used, critics say, In an Insurance in- "believe their own press releases" with chill- dustry propaganda campaign designed to mis- ing horror stories about huge liability claims. The letters st.and for "incurred but not re- "We've got to jack up our reserves." In Industry parlance, that translates Into the nlaJ;cial !nryel'8'1\ssociation, sai msurers, amount of money auto and other Insurers pre- In eeet, pull IBNR figures "out of their head." diet they will pay to settle unreported claims He described the increases In projected losses - on pollclea that are In effect in any given year. as a "slcyrocketing trend In gues ork" in The relatively obscure concept will play an which insururs "compound their own mis- Important role In lhe debate over auto Insur- takes" hr basing each year's IBNR losses on 11nce r form In California, where voters will be the previous years' inflated estimates. Robert Fellmeth of the Uoivecsity of San Consumcradvocatesandtriallawyersargue onepossiblesourceofinflatedlossprojections that auto Insurers use the IBNR concept. to Is the allegations and complaints filed in courts understate their profits, overstate their losses ror auto accident cases. "Plaintiffs routinely a~ addle drllnvers with ul\)usllfied rate hikes. overstate their damages," he said, which may surers have. Inflated their pro- lead lnsuren to over-reserve for future losses. relation to their actual claims-paid blstory. ClaJma Have Increased, Say Insurers Mooney of the Insurance Information Insti- en to set rates, critics say consumers wind up tute said projected losses have increased fairly paying the price when projected losses are dramatically because of an "expansion of li- Part of the answer, he added, ls that insurers Inform coruumers. The insurers' response to this, saidAngoff, is Will Glennon, a legal analyst for the Califor- ported" losses. raced with four competing ballot initiatives on the subject In November. ~s Center for Public Interest Law said ey aay jected lo ses from claims d1sproportlonatelyln Slnce IBNR losses arc one factor used by carrl-

Percentage Paid Per Premium ·

Claims Paid

Premiums Written

Ye ar ,

62.7 66.4 66 6 62:3 64.5 64 · 0

$1,783,100,000 2,035,497,000 2 335 561 000 2:190:911:000 3,465,899,000 l2, 4 u,o 34 ,ooo

$2,842,235,000 3,063,874,000 3 509 118 ooo 4;479:329:000 5,377,748,000 19 •272 • 3 04,000

11182 1983 1984 1985 1986

Los Angeles,CA (Los Angeles Co.) Times (San Diego Ed.) (Cir. D. 50,010) (Cir. S. 55,573) SEP 15 1988

Total

Percentage increase in claims paid between 1982, 1986 : 1---------- ----------------------1 94.4 - Source: Beot'• Execuuve Data Service

ro')·ect,·ons .

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Percentage Per Written Premium

Premiums Written - Future Claims

Uni~ San Diego got a header from Mike Brille ~s mto the second overtime period to lead 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. Fullerton's Paul Oldham scored the tying goal at 56:34. USD goalie Doug Wedge made a divmg save to send the ball into overtime, deflecting a 12-foot shot from Steve George that w:-s headed for the lower left corner of the goal. Brille's game-winner came after Kummer's shot was deflected by the Fullerton goalie, tJ

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Year

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000 ::::::~!'.ooo 3, 509 , 118 ,000 4,479,329,000 5,377,748,000 19,272,304,000

::::::~::: 2,8l4,3IZ,600 S,829,826,200 4,587,219,000 15,566,298,000

$

7 7 80.2 85.5 85.3 80.8 128.0 7

1982 1983 1984 1985 1 936

$

Total

Percentage increase in projected

_payments between 1982, 1986:

Source: e..t· • E.:ecut1... Data Service ability." Particularly since 1985, he added, 1---------------------------------f both the number and size of auto accident Auto/Pronerty Casualty Pro~ts (1 987) claims have risen sharply.

inflated.

Critic. Charge Lack of Ovenlght The lack of ovenlght of the industry In Call-

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Mooney :13id the number or ?8ims per l~0

fom)a, critlcs ch rge, allows this .process to cars In California rose from l.9 m 1985 ~o 9- 2 m Underwriting Loss Investment Gain continue unchecked. The alleged inflation of 1987.Butmanyclalms,henoted,donotmvolve

Federal Tax

Net Income

AUTO

lBNR loss s further Illustrates the need for lltlgatlon. , public ovcnlght of the Industry's rate-setting Whatever the cause of lhe sharp rise in auto practic s, according to proponents oftwo of the lnsuren' estimates offuture claims payments,

San Diego, CA (San Diego Co.) Evening Tribune (Cir. D. 123,064) s 6 1988

-$155,000,000

$119,000,000

$986,000,000

$1,022,000,000

ALL PROPERrl'Y-CASUAL....,.

critics contend It has several undeskable First - and r~remostfor California consum- ers who were hit with an average 4i IJ<'!'

reform Initiatives on the November ballot. . Further, critics soy IBNR losses should not consequences. be counted as losses on insurers' annual in-

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2, 799 ,ooo,ooo

$575 ,ooo,ooo

$4 ,o24 ,ooo,OOO

$G60,000,000

Note: Underwriting loss includes claims actually paid and pr(lje~ claims payments.

come 8tatemcnts.

They note the money Is not actually spent by boost In aut.o Insurance rates betwe~:, !9cl4 and

Source: Inaurance 1morma11on 1n,u1u1e

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lnaunll'II to pay ,:1alms in a reporting year, In,1986 - the mcreases have allowed;~ to --------------------------------'. addition, IBNR losses actually generate in- Inflate rate hikes, critics say. That Is because come for Insurers, 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- mon y Is placed Into re,r.ne accoun~. which greater justification they have to hike premi- on their projected claims payments, along with ments at the Department of Insurance. companies use as in•;-!slment funds. um prices. other information, to justify rate hikes. She But Insurance inrh~•try representatives de- d t if inc · B losse , In,atl,,n:il o !end tbelr use of the e:oncept. 'Inflated Reserves' industry officials contend, "not that big a deal, They contend Propositions 100 and 103 are They argue It 1:1 IIJl appropriate accounting SaldAngoff, "Theirratesarebased (inpart) then they have nothing to wony about." irrational approaches to the auto insurance account for "practically zero" when insurers group's executive director: "The problem Is rates to climb. Proposltlon 103, In particular, And lBNR lo ses, Industry officials aay, are determine auto insurance rates. But he did say insurers are Immune from public accountabll- would force many California insurers out or relatively minor factor ln setting auto Insur- that IBNR losses play a greater role in setting ity." The provisions of Proposition 100, in par- business, they say. · ance rates. rates for the bodily iajury liability portion of ticular, would require insurers to justify the The industry ls backing a competing initia- Th y contend recent upsurges In projected auto premiums than for the property damage appropriateness of IBNR losses and all the tive Proposition 104. That measure would es- loss are justified by Increases in the number portion. The bodily iajury premium accounts other factors they use to raise rates, he added. tablish a no-fault auto insurance system in and size of auto accident claims. And industry for about 60 percent of the total premium. The CTLA supports Proposition 100, and California under which i.ajured drivers collect repres ntatives s y over-Inflation or IBNR Mooney said the argument that insurers use Glennon said one effect of the measure would from their own insurers, regardless of fault. losses ls prevented by regulatory agencies, in- IBNR losses to Impose wtjustified rate hikes on be to require insurers, "when they full a num- The measure would reduce the number of eluding the Internal Revenue Service. consumers "doesn't make any sense." her out of their head, to verify it.' auto accident cases that go to court, propo- But critics contend there should be a slattstl- The IRS would look askance at insurers who nents say, thus reducing insurers' legal costs. cal link between Insurers' clairns-pald history "inflated res es beyond what they should 20% 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 rate for a two-year, 20 percent reduction in the bodl- would make no sense, they say, for actual Inflatedrescrves,criticsagree,alsoserveto rollbackinallllabllityratesfromtheirNovem-Jy iajury and uninsured motorist portions of claims paid to remain fairly constant at the increase rates lndl.rectly 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- dramatlcnlly. note, the less they have avaliable to underwrite drivers. ' lylimit Jzuured drivers' legal rights by restrict- And that appears to be what haa happened In policies. That shrinks supply, which, In turn, The disproportionate increases in IBNR and ing their ability to sue pie negligent drivers California, according to data compiled by Increases prices, they reason. reporteii claims reserv s ,d Ang ff !'" who caused their lzuurles. The measure also Best's Executive Data Service. The debate over the reserves insurers set reason why the 20 pere~t(across~~.:S:) limits the ability to collect p~ and suffering Betwe~n 1982 a~d 1986, the percen~ge ?f id to tlm tedfuture claims . d try rollback in 103 isJ'ustifi d., damagesandcapsattorneycontingencyfeesln total wnttcn premium dollars that Califorma as. e pay es a •m us e · · auto cases. . _, auto insurer.i paid In claims Increased only cn~:y, i!l1illgbts th e :Sed 7tuce ';!d And Harvey Rosenfield, campaign chairman And perhaps most important, Proposition slightly, from 62. 7 percent to 84.5 percent. In ::'allot inl~tl=~~ !!wo'ns 1 g 0 a':i~e~ 3 r fo~ Proposili?n ~03, added, "Propositi~n 103 is 104 criti~ note mo~t of ~e meas~ is devoted total dollars, the amount grew 94.4 percent, in 1 d . . lh f iild -u gomg to reqwre msurers to open up the!I' books to canceling provisions m Propositions 100 and from $1.783 billion to $3.466 billion. tc u e Pdl'OV1S 1? 08 abliwo . ro racJct a~to and prove they need every rate increase It 103 that would regulate rates, require public ra es an reqwre pu c reVIew o ra e m- d to th free . · • ts d d th J?uring the same period, the percentage of crease requests. means an en ~. reign they have had !'1lVleW or rate lncr;ease reques ' an ~en e wntten premium dollars set aside to pay pro- Under current law, insurers, by and large, for all these Y~-. . . . md~try s exemption frorµ state an~ : jected future claims jumped from 70.7 percent 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 rat.es with the · '·· -· " ~ Iner ascd_128 percent, from $2.009 billion to state Department of Insurance. • • • $4.587 billion. Judith Bell, special projects coordinator for Elect1· on on New Ja1·1 s1·tes· Sought the West Coast office of Consumers Union, re- Two Types of Lo es called that when the liability insurance crisis But Scan Mooney, s~nior vice president of first surfaced in 1986, industry officials and the Ins ra ton Institute noted that consumer advocates debated whether the in- futu losses include both proJec c payments dustry was profitable. on unsettled claims already reported and esti- rna ted payments on unreported claims Profit, or Loss? UBNR>. Consumer advocates contended then that IBNR losses, he said, accounted for onlypart California Insurers - including , auto carri- SANTA ANA - Santa Ana city offi- :tired of beinga dumping 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 "wtjust" Supporters say a centraliz!l(i jail would re- initiative that would require all jails to be built duce traffic problems, minimize lhe 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 ~ccepting tia. , " ·• the measure as a county ordinance. ,. · However, opponents argued that transporta- method that helps companies remain solvent on these inflated reserves." by ensuring they r erve enough money to cov- The Insurance Consumer Action Network ls crisis because they reduce rates without ad- But Mooney saJd IBNR losses, in particular, the sponsor of Proposition 100. Said Miller, the dressing the cost factors that have caused er all future losses from claims.

ummer camp, - Ulli_versitr of San Diego's camp sessions: Grades 2-7; sports calnpnl!l'"ages 8-18; all-sports day camp for ! ages 7-13; baseball camp; outd~r camping. • Information: 260-4684. ,;?.'f 5~ f

Vista, CA

(San Diego Co.) The Vista Press (Cir. D. 7,676 (Cir. S. 7,967) SEP 16 1988

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

SEP 1 Gt

Jtlln. ', ,au Nader to debate no-fault ;20~ "'· C. B F.JI, I 888 Jl[lc11 '• P. C. B fo.

Customer activist 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 USO law school-sponsored event is free and open to the public, but tickets are required for admission. For tickets, please call 260-4650. Nader 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 questions and a panel dtscussion examfnmg the Califorrl'1 . initiatives on the November 7 ballot tha. deal 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-

cess to Justice Foundation and head of "Voter Revolt to Cut Insurance Rates." (This is the proposition that Nader is sup- porting.) Propositions l04 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 law 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." USO 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.

ofthe $1.8 billion in projected property-damage ers - were makinga 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 irtj ury opP.'!_site was the case. llablllty portion or auto premiums was much 'AblgpartofthedebatewaslBNRsandhow larger. Mooney said the total projected bodily (insurers) played with them," said Bell. The h\jury liability claims payments totaled $4.392 controversy, she added, "showed acl!ounting billion for California auto insurers in 1987, a principles are really important in this battle. It portion of which was allocated for IBNR losses . becomes one of the central points of the Steven Miller, executive director of the In- debate." sw:ance Co0$ 11 Ulct Action Nchy_ork of Lo~ Bell noted that if Proposition 100 or 103

The initiative was spearheaded by a group lion 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 DE'';::; conferei:ce';""some ·City ,. · Council members s. ~l their densely populated community alreadJi fulfilled its obligation by housing the Orange County Jail. For best results .Los Angeles Daily Journal , Classified 62S-2141 "Santa Ana has more than paid its fair share," Councilman Ron May said. "We're

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

t fresh start vs. Claremont Mudd

The USD offense produced its only touchdown late in the third quarter, freshman running back Charles Tau- moepeau scoring on a 19-yard run. It was his only carry of the game. USD finished with 155 yards" total offense. "Offensively, we were mediocre," Fogarty said. 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 there," he said. In addition, sophomore quarter- back Brendan Murphy is returning from off-season shoulder surgery. He was 4-of-10 for 40 yards against Menlo.

back Greg Clark scored from the 1 to make it 17-12. With only a few minutes left, Menlo used another 54-yard pass 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 fum- ble recovery in the end zone by de- fensive back Mark Crisci. Just before halftime, USD moved to a first-and- goal at the 1 - and Jim Morrison ended up missing a 17-yard field-goal attempt on fourth down.

However, the Toreros probably are relieved to be facing anyone but Menlo College. The last two times USD has played, it has lost heartbreakers to Menlo. The first came in the Toreros' 1987 finale. Menlo won, 17-15, to keep USO out of the Division III playoffs. Last Saturday, in the season open- er for both, Menl" rallied from a 17-6 fourth-quarter o~fi:.it to edge visiting USD, 18-17, Ah three Menlo touch- downs came on or followed long gains, Having scored on a 54-yard pass in the first quarter, the Oaks stunned USO on the opening play of the fourth, returning a kickoff 76 yards t~ 8. Moments later, quarter-

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I" C B Eu LOCAL BRIEFS -------- UC Irvine beats Toreras ~r.~ Kn Rob rts liaifi4 kill and Ali Men'• • occer - Mark Bjorklund Wood d 10 to h Ip UC Irvme defeat scored v.1th 27 mmutes, 26 seconds U D, 15 5 15 11, 15-8 m a worn n's rcmamtng to lead Portland past host non-conference volleyball match 'ast U IU, 1-0, in a Divis10n I game. Gar- night at th USD Sports Center. rett m1th assisted on the goal. An I R IS had 1x kills for the Portland. ranked 10th in Soccer Toreras (2-5) Th Anteaters are 4-0 Amenca this week, is 6-0 The Gulls SD ho t Cal State Fullerton to- are 0-4. mot row mght t 7 30 Th USIU women and men host team from Cal State Dominguez Th San Diego Hill tomorrow at l and 3 p.m., re- pect1vely. Community college • occer -

By Ken Stevens Staff Writer

. Tonight at 7:30, USD will play its 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 III last year. "They were a throwing type of team until (Dabrow) came along, and we expect them to be like that again," USD coach Brian Fogarty said. Junior quarterback Mike Pem- broke leads Claremont'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.

Craig Giangregorio had two goals and an a s1st m the Cuyamaca men's ~-1 non -conference victory over Orange Coast at Grossmont College. Cuyamaca is 3-0, Orange Coast 2-1.