$3.5 Million Lobby Tab For Auto Insurance Reform

By Daniel Hays

NU Online News Service, June 16, 4:23 p.m.EDT?The industry coalition that ran a two-year campaign topush through New Jersey's omnibus auto insurance reform law spentabout $3.5 million on the effort, the head of the group said.

The extended, but tightly focused effort "in the scheme ofthings," by comparison with insurance issue campaigns in otherstates was not particularly costly, said John P. Friedman, chairmanof the Coalition for Insurance Competition.

According to the Insurance Information Institute, insurers inCalifornia during the 1988 debate over no-fault insurance spent$55.87 million.

The voluminous New Jersey legislation that was signed into lawlast week includes provisions to gradually eliminate a "take allcomers" requirement and expands the level for expedited ratechanges from three percent to seven percent.

It also modifies the excess profit law to encompass a wider timeperiod and repeals a requirement for prior approval of a withdrawalplan.

Mr. Friedman, who is also assistant vice president and seniorlegislative counsel for USAA in Florham Park, N.J., said during theCoalition's effort, they had focused on newspaper, cable and radiooutlets and visited countless newspaper editorial boards.

The coalition, he said, had individually met with and lobbiedall 40 state senators and the 80 Assembly members to educate themon the issues and the condition of the state's fractured insurancemarketplace.

"There's always been a level of skepticism by the averagelegislator how insurance is regulated. That's why we had to meetwith everyone," he explained.

To help push its case, Mr. Friedman said the coalition hired thePrinceton Public Affairs Group, Princeton, N.J., a high-poweredlobbying concern, and the Newark, N.J.-based Winning Strategiesmedia firm. The group also employed the Sacramento, Calif. firm ofGoddard, Claussen, Porter and Novelli, which ran the "Harry AndLouise" campaign that help defeat the Clinton Administration healthcare proposal.

Mr. Friedman, David Smith the Princeton Public Affairs Group'slobbyist for the effort, and Jim McQueeny, who heads WinningStrategies, said a key decision was to avoid issues involvingprices, damage and injury reimbursement, and to focus instead onchoice and availability.

Mr. Friedman said because of that limited focus, interest groupssuch as auto body shops and medical providers remained neutral,leaving trial lawyers as the main resistance.

By the Coalition's count, 20 auto insurers have left the statewithin the past 10 years. Mr. Friedman said legislators were madeto understand that "when Progressive and Geico are not interested"in doing business in a state that "something is fundamentallywrong."

Mr. McQueeny commented, "availability and choice?once thatmessage was settled on, it started rolling along." It helped, hesaid, that the bill was not put in until the end of "a consensusprocess that reflected a lot of different voices."

New Jersey's Senate is split evenly between Democrats andRepublicans. In the Assembly, Democrats have a five-vote edge. Mr.Friedman said the effort got an "enormous boost' when DemocraticGov. Jim McGreevey made auto insurance reform a central theme inhis "State of the State" message, and worked to make it abipartisan effort.

Mr. Friedman said that among the companies that were active inthe coalition were his own firm, Selective, as well as One Beacon,National Association of Independent Insurers, Fireman's Fund,American Insurance Association, Insurance Council of New Jersey andNew Jersey Association of Professional Insurance Agents.

He said it now is up to the state to develop regulationsimplementing the law, which should happen this summer.

Despite the coalition's success, Mr. Friedman said his group iskeeping a wary eye on a bill backed by trial lawyers that wouldrevise the state's no-fault system by lowering the threshold forpain and injury lawsuits.

He said that would inflate costs and premium prices, making rateregulation an issue for political debate