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Occupy LA/Los Angeles, CA -- Consumer Watchdog, whose founder Harvey Rosenfield wrote Proposition 103, the 1988 insurance reform initiative that has saved drivers $62 billion, celebrated the 100th birthday of the California ballot initiative process at Occupy LA in downtown Los Angeles Thursday.  The nonprofit, nonpartisan group blew out 100 birthday candles on a giant birthday cake decorated with the California Constitution’s language creating the initiative process and served the cake to participants in “Occupy LA” on the steps of Los Angeles City Hall.
 
On October 10, 1911 a special election called by Governor Hiram Johnson established the initiative process by a margin of 168,744 in favor to 52,093 against.  Consumer Watchdog says that the initiative process was created to be a formidable tool of democracy empowering average citizens to protect themselves from the corporate interests that ruled the State Capitol and that this tool of populist power remains essential to California democracy.
 
"100 years ago, California voters created a new and powerful tool of direct democracy that could be used by the 99% when the 1% ­ the wealthy and big corporations ­ control California government,” said Consumer Watchdog founder and Prop 103 author Harvey Rosenfield.  “The initiative process belongs to the People, and in this age when Wall Street occupies Washington and Sacramento, there's no better place to celebrate it then here, where Americans from all walks of life are gathering to regain control of our democracy and restore 'the people' to 'We the People.'”
 
Consumer Watchdog has spent twenty years enforcing the grassroots 1988 insurance reform initiative Proposition 103, which the Consumer Federation of America reports has saved California motorists over $62 billion on auto insurance premiums alone.  Consumer Watchdog is drafting a proposal for the 2012 ballot to regulate out-of-control health insurance premiums and create an option for Californians to get health coverage through a public plan.
 
“Today Californians want to rein in skyrocketing health insurance premiums, but health insurance companies control enough votes in Sacramento to stop reform in its tracks just like the railroad barons gridlocked Sacramento in 1911 and auto insurance companies did in 1988. ” said Consumer Watchdog President Jamie Court, the author of The Progressive’s Guide to Raising Hell.  “Thanks to Hiram Johnson, a ballot initiative can be our answer to giving consumers control over their health insurance premiums and to take back control from the medical insurance complex.”
 
Consumer Watchdog has also been fighting a series of high-priced initiative proposals by Mercury Insurance to repeal provisions of Proposition 103. Voters rejected Mercury's 2010 initiative, Proposition 17 that would have repealed Proposition 103’s prohibition against insurers surcharging people who did not have a car or carry auto insurance in the past.  Despite the defeat, Mercury Chairman George Joseph has recently contributed $8 million towards a potential November 2012 initiative virtually the same as Proposition 17.  Consumer Watchdog estimates that Mercury’s proposal would increase premiums by as much as 40% or more for millions of Californians including students who went away for college, Californians who previously used mass-transit, and the long-term unemployed.
 
““Unfortunately, some corporations are attempting to use the initiative process to enrich themselves,” said Rosenfield. "Mercury Insurance and its chairman have spent tens of millions of dollars trying to increase their own profits by manipulating the Legislature and the ballot initiative process at the expense of Californians. The immediate antidote is voter vigilance; the long term solution is to prevent special interests from interfering with the rights the Founders gave to the American people.”
 
The 1988 Voter Revolt and Prop 103
The voter revolt that led to the passage of Proposition 103 highlights the value of the initiative process, Consumer Watchdog said. In the mid-1980s, auto, home and business insurance rates skyrocketed, as insurance companies sought to recoup investment losses. At the time, California law did not provide government officials with authority to limit unjust insurance rates or practices. Insurers were also exempt from state antitrust, civil rights and consumer protection laws. When insurance company lobbyists killed modest legislation sponsored by consumer groups to regulate rates in 1987, Rosenfield authored Proposition 103 and led the grassroots campaign for its passage on the November 8, 1988 ballot.

Proposition 103 mandated an immediate 20% rate rollback and refund; regulation of auto, home and business insurance rates; public disclosure and prior approval of rate increases; a further 20% discount for good drivers; auto premiums be based on driving safety record rather than zip code; a ban on penalties for persons applying for insurance for the first time; application of state laws to the industry; right to challenge violations of the law; and the election of the insurance commissioner.

Insurers, including Mercury, spent $63.8 million against Prop 103 in 1988. But the grassroots-backed 103, with only $2.9 million in spending based on donations averaging $8, passed. All totaled, the insurance industry has spent about $100 million on ballot campaigns alone to defeat or overturn Prop 103.  Insurers have spent tens of millions more on unsuccessful attempts to block the law in the courts.

Proposition 103 has saved California drivers more than $62 billion since its passage in 1988, according to a 2008 study by the Consumer Federation of America. Insurance companies paid over $1.2 billion in refunds. Data published in 2007 show that between 1989 and 2004, California auto insurance premiums declined by 7%, while rates nationally increased 47%. During that period, California went from 2nd most expensive state for auto liability premiums in the country to 21st. Californians, who paid 52% more than the national average for auto insurance in 1989, paid less than the national average in 2004.
 
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