An insurers trade group executive said today that carriers willbe in court Monday to appeal a judge's refusal to halt newregulations limiting carriers' use of ZIP codes to rate Californiadrivers.

Sam Sorich, president of the Association of California InsuranceCompanies said the organization expects "to go to the CaliforniaCourt of Appeal and ask for a reversal."

Yesterday's decision by Superior Court Judge Loren McMaster inSacramento was hailed by State Insurance Commissioner JohnGaramendi, who issued a statement terming it "a great victory forCalifornia voters and good drivers wherever they live."

He said it meant that state residents "will finally realize thebenefits of Proposition 103," the 1988 voter initiative forinsurance reform, "Good drivers should reap the rewards of beingsafe," he added.

Under Mr. Garamendi's new regulations, which he refers to as theGood Driver Auto Insurance Reforms, insurers are required to ratedrivers based primarily on their safety record, annual mileage anddriving experience.

Although Judge McMaster denied the application for a stay byACIC, the Personal Insurance Federation of California and theAmerican Insurance Association, he extended the time for carriersto file new rating plans from Monday to Thursday, during which timethey can appeal.

Mr. Sorich noted that the judge's ruling was not on the validityof the regulations, but on the question of whether an injunctionshould be granted.

The insurers, he said, had argued to Judge McMaster thatimplementation of the regulations would harm drivers and people whopay premiums, because if a court ultimately finds they are invalid"the drivers who paid more [under the regulations] will havedifficulty getting money back."

"And we will have difficulty explaining to other drivers why weare making them pay more," he added. It's going to be a consumerhardship."

ACIC contends that the change in regulations will penalizedrivers living in rural areas who currently pay less.

Mr. Sorich said ACIC believes the judge was mistaken in denyingthe stay. The judge found that the organizations' suit to overturnthe regulations did not have a good likelihood of success because acourt will give deference to the commissioner.

He noted that the first requirement for filing under theregulations only calls for a 15 percent compliance, "but ultimatelythe companies have to achieve a full 100 percent compliance withintwo years."

According to Mr. Garamendi, while insurers have two years, "theymust show significant progress during the first year."

The lame-duck commissioner, who is the Democratic candidate forCalifornia lieutenant governor, has been battling insurers sinceissuing the regulations, and during his primary campaign he chargedthat their negative ads about his rules were "blackmail."

In his statement yesterday after the court ruling, he said ChuckQuackenbush, his Republican predecessor as commissioner had alloweda system that "permitted insurers to charge widely varying rates tosimilarly situated drivers who live across the street from oneanother, based solely on their respective ZIP Codes."