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NEWS RELEASE
Aug 31, 2002


CONTACT: Jamie Court - 310-392-0522 x327

The Fix Is In : Dems Side With Insurer Over Poor

Surcharge On Those With Lapsed Coverage Violates Prop 103
Sacramento, CA -- California Senate Democrats today are railroading through legislation (SB 689) allowing insurers to surcharge previously uninsured motorists and those with lapses in coverage, including American soldiers returning from war and those who cannot afford to drive for more than 90 days.

SB 689, by Sen. Don Perata (D-Oakland), violates voter-approved Prop 103, court rulings and is opposed by Insurance Commissioner Harry Low, consumer groups and civil rights groups. The Foundation for Taxpayer and Consumer Rights said it would sue to invalidate the measure, as it has twice in the past with other bills unconstitutionally amending 103, each time successfully.

The bill's sponsor Mercury Insurance greased the vote with $1,077,550 million to state lawmakers and candidates since 2000. Mercury has donated to 25 Senators and 56 Assembly Members --two-thirds of the California legislature; 45 Democrats and 36 Republicans were recipients of Mercury's largesse.
The Senate Majority Fund controlled by Senator John Burton received $100,000. Mercury donated an additional $150,000 to the failed term limit extension initiative Prop 45, led by Senate Pro Tem John Burton.

"This bill is a hit-and-run on the poor and those with coverage lapses, including soldiers returning from war," said Jamie Court, executive director of the Foundation For Taxpayer and Consumer Rights. "Senate leader John Burton was behind the wheel and Mercury Insurance filled the gas tank. Only a bill with Burton's backing could turn previous Democratic opponents to supporters and silence Burton's house and party about an outrageous attack on their core constituency, the poor, cloaked in the veil of insurers' free market economics. When the conscience of the state house becomes the mouthpiece for corporate competition, the Democratic party has sunk to an even lower level in Dante's inferno. This legislation will increase the number of uninsured and raise uninsured motorist premiums for all drivers. It could only pass in the chaos and darkness of the last day of session. Today the Democrats mugged the poor to put more money in the pockets of one of their biggest contributors."

At a hasty Senate Insurance Committee hearing this morning, previous opposition to a similar measure by Senators Speier and Escutia turned to support. Senator Figueroa, a "no" vote at the previous hearing, did not vote. This presaged passage by the full Senate later today. Many senators are hesistant to speak on the floor against the measure despite expressing concerns about it. Only Senator Burton's backing of this bill could have produced this result in a State Senate traditionally more defensive of the poor than the Assembly, which had a vigorous debate on SB 689 two days ago. Reported concerns in the caucus about extending drivers' licenses to the undocumented and surcharging the uninsured in the same session have been apparently been quashed by Burton's support.

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