Insurance Rate Plan Is a Government ‘Shakedown’

In “6% Auto Rate Hike Proposed to Aid Quake-Devastated Firm” (Aug. 16), it was reported that the state Insurance Department and two consumer groups are endorsing a plan for a 3% rate increase (about a third of the needed 9.2%) in auto premiums for 20th Century Insurance and 21st Century Casualty Co. Also, an additional 3% would be temporary until an increase in the insurers’ capital became apparent.

In order to obtain even this improvement in viability for the company, part of its vital capital would have to be placed in less than the best of hands (local banks) to “promote economic development” of the Oakland area, and a further amount would have to be given directly to “support nonprofit community activities” there.

This appears to be another case of malfeasance and collusion to commit a shakedown (extortion) by “self-serving” government for political purposes. All persons from Commissioner (John) Garamendi’s office involved in this outrage should be clearly disciplined.

An explanation for further jeopardizing the health of this company, which has provided such major benefit to all of the citizens of California as well as its policy-holders, for the benefit of Mr. Whitehead’s Oakland Economic Empowerment Foundation is something to which John Garamendi should give very, very careful thought.

CHARLES W. FOX

Mission Viejo