Experts Work to Resolve Prop. 103 Issues - Insurance: A panel representing consumers, companies and the state begins the first serious effort to tackle differences on pricing car policies.

A panel of experts began work Friday drawing up an official interpretation of Proposition 103 as it relates to new methods of pricing auto insurance.

The panel--composed of a leading insurance industry actuary, the head of the National Insurance Consumer Organization and the chief deputy state insurance commissioner--was formed as a result of negotiations involving representatives of Insurance Commissioner Roxani Gillespie, the big insurance companies and leading consumer organizations. It is the first serious effort by all parties to resolve issues relating to implementation of Proposition 103.

The talks are aimed at producing a court settlement by early next week under which the industry would formally accept Gillespie’s freeze on all auto insurance rate increases, and Gillespie would cancel her order of last week telling the companies to stop setting premiums based on where a driver lives.

Gillespie said Friday she hopes that the panel of experts will be able to present a new auto insurance pricing plan, acceptable to both the industry and consumer groups, at the onset of hearings she has scheduled to begin Oct. 30.

This, if adopted, would replace the order to drop neighborhood-based pricing with a new system that adheres to Proposition 103’s provision that a driver’s safety record, the number of miles driven annually and the number of years of driving experience be the most important factors in pricing auto insurance. The new system would also allow where a driver lives to be used, but as a less important factor.

Members of the panel are Gillespie’s chief deputy, Ray Bacon, a veteran of 31 years with the Fireman’s Fund company; J. Robert Hunter, head of the National Insurance Consumer Organization, and Michael Miller, a longtime industry actuary and consultant who is now with the Tillinghast firm.

Harvey Rosenfield, author of Proposition 103 and head of the Voter Revolt organization, said he and other consumer leaders had asked Hunter to represent consumers on the panel. Rosenfield said Hunter will have to consult with the consumer organizations before agreeing to compromises on the pricing provisions, and presumably Miller will consult with insurers.

Meanwhile, Gillespie’s special counsel for Proposition 103, Karl Rubinstein, and attorneys for the Farmers group of companies made plans to ask Los Angeles Superior Court Judge Miriam A. Vogel on Tuesday to clarify her decision last week upholding Gillespie’s auto insurance rate freeze, but possibly only until the end of November.

Spokesmen for both parties said they could not agree among themselves on precisely what Vogel was getting at in her ambiguous decision. Farmers interpreted it as allowing its companies to raise their rates at the end of November, while Gillespie insisted that she was empowered by the decision to block any rate increase.

In other insurance developments Friday:

- The board of governors of the California Assigned Risk auto plan said it will file Monday with an Insurance Department administrative hearing judge for an immediate interim rate increase averaging 112.3% for assigned-risk drivers statewide. A request for a permanent 112.3% increase has been pending since February.

James R. Woods, attorney for the group, said California insurance sellers are losing $2 million a day handling assigned-risk policies. Robert Gnaizda, attorney for a minority-consumer coalition that opposes the increase, said he will try to block the request for an interim increase.

- The Insurance Department said it believes that the Farmers group is violating state law by referring thousands of new customers with good driving records to a subsidiary company that charges higher rates, and may issue a formal notice of non-compliance, ordering refunds.

A Farmers spokesman said that as far as the company is concerned the matter is still under discussion with the department and no disciplinary action is yet in the offing.