Spanish Speaking Citizens' Foundation, Inc. v. Low (2001)

First Dist., Div. Four.

Jan. 25, 2001.]

[Modification of Opinion (85 Cal. App. 4th 1179 ) on denial of petition for rehearing.]

SPANISH SPEAKING CITIZENS' FOUNDATION, INC., et al., Plaintiffs and Respondents, v. HARRY LOW, as Commissioner, etc., Defendant and Appellant; STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al., Intervenors and Appellants.

PROPOSITION 103 ENFORCEMENT PROJECT, Plaintiff and Respondent, v. HARRY LOW, as Commissioner, etc., Defendant and Appellant; STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al., Intervenors and Appellants.

REARDON, Acting P. J.-

The petition for rehearing filed by respondents on January 16, 2001, is denied.

The opinion filed herein on December 29, 2000, is ordered modified as follows:

1. On pages 29 and 30, the paragraphs which begin "The testimony of State Farm actuary Becraft was representative . . ." (2d par.) and "Becraft also found substantial differences in the effects . . ." (carry over par.) are deleted [85 Cal. App. 4th 1206 , advance report, last par., lines 1-2 and p. 1207, lines 1-31] and replaced by the following paragraph:

The testimony of State Farm actuary Becraft was representative of the evidence presented in support of the insurers' arguments. Becraft testified that, because of the pumping or tempering of factors required under Birnbaum's method, good drivers in most of the state would pay higher BIPD premiums under that method than they would under State Farm's interpretation. Conversely, under Birnbaum's method more drivers who did not meet [86 Cal. App. 4th 839b] good driver criteria would have premium decreases, and fewer of those drivers would have premium increases, than under State Farm's interpretation. Becraft also testified that there would be substantial differences in the effects of Birnbaum's interpretation on the premiums in different counties. She said that "[u]nder the Project's proposal, if the relativities for the optional factors were compressed to achieve the required order of weights, our policyholders in most California counties would pay at least ten percent higher premiums than under our approved Class Plan filings[, w]hile no more than three counties, including Los Angeles and San Francisco, would pay at least ten percent less. The cost of insuring the policyholders in those counties paying less remains the same, but is shifted to the policyholders in other counties. That is, policyholders in most of California have to pay for the cost of insuring policyholders in a few urban centers. This effect is not dependent upon a policyholder's ability to pay - wealthy policyholders in Beverly Hills benefit just as much as the Los Angeles urban poor, and the rural poor in counties like Humboldt County pay significantly higher rates to subsidize policyholders no worse off than they are."

2. On page 36, in the first lines of the second and third full paragraphs [85 Cal. App. 4th 1212 , advance report, first lines of the 3d and 4th pars.], the year "1988" is replaced with 1998.

3. On page 58 [85 Cal. App. 4th 1230 , advance report, last par. and p. 1231, lines 1-7], the paragraph which begins "As previously noted, State Farm actuary Becraft presented a study in the administrative proceeding . . . " is deleted and replaced by the following paragraph:

As previously noted, State Farm actuary Becraft testified in the administrative proceeding that more good drivers, and fewer "poor" drivers, would pay more for BIPD coverage if the Birnbaum method were followed instead of the current regulations. These results are plainly contrary to the intent of Proposition 103. Becraft also predicted that the premiums of State Farm policyholders in most counties would increase by at least 10 percent if Birnbaum's method were followed. Although we have observed that Proposition 103's "affordab[ility]" standard is not a clear criterion for evaluating alternative constructions of the factor weight ordering statute, Becraft's prediction of large premium increases for some insureds was consistent with the findings years earlier that led to the imposition of limits on premium increases when an aggregate cap on optional factor weights was first tried in the Tempered Regulations. (Note at p. 728.12.) Those earlier findings at the least give added credence to Becraft's conclusions.

There is no change in the judgment.