James P. Sweeney,
COPLEY NEWS SERVICE
SACRAMENTO — Millions of Californians could face higher auto insurance rates, and some already are having a tough time finding jobs, as a result of the Wilson administration’s decision to quietly rewrite rules that govern public disclosure of driving records.
The administrative edict lengthened the time that offenses ranging from too many moving violations to drunken driving remain public record. The change was made in November by Gov. Pete Wilson’s appointees in the Department of Motor Vehicles.
Those guilty of such vehicular misconduct tend to evoke little sympathy. But motorists who have had old violations resurface or linger longer than expected say it amounts to changing the rules after their debt to society was set and, in some cases, paid.
Insurance companies almost certainly will use the additional information to raise rates for those with spotty driving records and to assess such penalty premiums much longer than they have in the past.
Brian Soublet, an attorney and rating specialist with the Department of Insurance, said the industry has clear legal authority and is expected to factor the new information into their premiums.
The Department of Insurance recently repealed rules that had restricted insurers to a “three-year snapshot” of driving records for rating purposes, he noted.
Harry Benedict, a construction manager from Encinitas, was incensed when he discovered his nearly 7-year-old DUI, which under the old rules was about to be wiped off his record, is going to be with him for three more years.
“What the DMV is doing … benefits insurance companies to the tune of millions of dollars, and I think it’s an outrage,” Benedict said.
The new disclosure revisions were executed with no public notice, although the insurance industry had been involved and at least some of the new rules clearly reflect insurers’ wishes.
Industry is a supporter
Throughout Wilson’s political career, the insurance industry has been one of his strongest supporters, providing more than $1 million for his 1994 re-election effort alone.
Wilson administration officials say the changes were dictated solely by a multiyear review prompted by numerous changes in law.
Nonetheless, the new guidelines position the industry to take advantage of two potentially landmark developments about to play out in the auto insurance arena. They also could generate a new, backdoor revenue stream for an industry under mounting political and competitive pressure to reduce auto rates for its best customers.
On Feb. 18, insurers must submit new auto rating plans based on the “good driver” provisions of Proposition 103. For the first time, those rating plans must make individual driving records the dominant factor.
A new law effective Jan. 1 also threatens the state’s estimated 5 million uninsured motorists with the loss of their cars and their licenses if they continue to drive without coverage.
Such license suspensions in the past have been public record for one year. Under the new rules, they will remain on drivers’ records for three years, the precise window that insurers can use such blemishes to deny the 20 percent “good-driver” discount mandated by Proposition 103.
Little-noticed action
Sally Reed, a respected former Los Angeles County chief administrator who heads the DMV, ordered the disclosure revisions in a little-noticed action on Nov. 1.
“It’s strictly looking at the law, the information that we maintain and the requirement that we make it available,” Reed said. “We are required to maintain the information. We don’t have a legal basis to refuse to provide it.”
Disclosure periods for a handful of offenses, such as reckless driving and hit-and-run, were shortened. But for twice as many other situations, time lines were lengthened. The most contentious change has been the extension from seven to 10 years for drunken driving convictions. However, untold millions with less serious violations also will be affected.
In addition to insurers, many employers review driving records of job applicants.
“It’s unfair,” said Mark Lopez, an unemployed truck driver from Rancho Dominguez near Los Angeles. “I did everything the court asked, everything the DMV asked — community service, AA meetings, paid a lot of money to go to this drunk driver school.”
Lopez had expected an old DUI to disappear from his record late last year as the court and DMV promised in terms set out at his sentencing. It did lapse, for two months.
“I went to get a DMV printout for a job interview and all of a sudden they had it all back on there,” he said.
With his DUI back on his record, Lopez said he didn’t bother to go to the interview.
“It’s going to hurt a lot of people,” he said. “It makes it tough.”
Maze of rules consolidated
Reed and her top lieutenants say the department merely consolidated a complex, overlapping maze of statutory and administrative obligations to maintain driver records.
Over the years, changing laws required the DMV to keep some records, such as DUIs, longer than it historically had made those records public. Reed said she simply concluded that the state’s Public Records Act required full disclosure.
That may be true, conceded state Sen. Quentin Kopp, a San Francisco Independent and chairman of the Transportation Committee. But he said the department should have aired its intentions at a public forum.
Kopp said he suspects the DMV acted largely at the behest of the insurance industry and the governor’s office. It would be unusual for Reed to pull the trigger on such a potentially controversial move without clearance from Wilson’s top aides.
“It’s the manner of making the changes and the secrecy in doing so, which bothers me,” he said. “I think the department deserves a spanking for acting in response to insurance companies’ pressure and without a public hearing.”
Sean Walsh, Wilson’s press secretary, said the governor’s office neither initiated nor passed final judgment on the revisions.
“There was no decision made in the governor’s office,” Walsh said. “The (DMV) simply informed us that the changes made in reporting were to bring DMV policies in compliance with statute.”
Kopp plans to grill Reed at a public hearing soon and is pondering legislation that would roll back some of the reporting time lines.
Reed insisted she was not prodded by anyone.
“I never had a call from an insurance company. I never met with an insurance company,” she said. “I haven’t had any dealings with them. Now they are interested, obviously. But they haven’t made any requests of me. … Nobody intervened in this decision. It was strictly looking at the law and what options we had.”
No one disputes that insurers have for years been pushing the DMV for greater access to its records, particularly since the passage of Proposition 103. A top priority was extending from one to three years the disclosure of license suspensions.
The Personal Insurance Federation, a trade group that represents most of the state’s largest auto insurers, sponsored legislation to do just that two years ago. The bill was shelved when DMV officials said they could provide the access administratively, said Dan Dunmoyer, the federation’s president.
Consumer groups surprised
While the new disclosure guidelines were being developed, the federation reminded the DMV of its desire to have all license suspensions declared public record for at least three years, Dunmoyer said.
Consumer groups, in contrast, had no idea the disclosure rules were being revised until they received a DMV bulletin sometime in November, after the changes had been made.
“This is exactly what the industry wants,” said Michael Shames of the San Diego-based Utility Consumers’ Action Network. “I can tell you it was not driven by consumers or consumer groups.”
Harvey Rosenfield, the author of Proposition 103, said he has no objection to the changes.
“In our view, you get a 20 percent discount if you’re a good driver,” Rosenfield said. “That means not more than one moving violation in three years. But people who have a better record than that could conceivably get an even better discount. So it’s good for us to have this information out there.”