Delay Expected in Auto Policy Pricing System : Insurance: Commissioner Roxani Gillespie’s goal on new regulations was the end of November. Advisers say they need more time to analyze data.

SAN FRANCISCO —  Doubts arose Tuesday over whether Insurance Commissioner Roxani Gillespie can meet her goal of promulgating new regulations for the pricing of auto insurance by the end of this month.

One of the members of a three-member panel appointed by Gillespie to seek compromise solutions for implementing provisions of Proposition 103 said it may take to the end of January to analyze data needed to make her decision.

The consumer member of the panel of actuarial experts said that while insurers have become cooperative in providing computerized data on which to base a new pricing system, there must be enough time to fully evaluate its effects.

Otherwise, said J. Robert Hunter, head of the National Insurance Consumer Organization, there could be unpleasant surprises for millions of policyholders when the principles of the new system are put into practice.

Proposition 103 implementation has been plagued by months of delays, but Hunter said the actuaries are reluctant to rush just to meet the latest deadline and want complete computer analysis of their proposed rate-setting formula before finally recommending it.

Proposition 103 states that a driver’s safety record, the number of miles driven annually and the number of years of driving experience should be the most important factors in setting insurance rates instead of the home address of the driver, as has been the case.

But Gillespie has stated repeatedly that such a change could result in premium increases for 70% of the state’s 18 million drivers and decreases for only the 30% concentrated in the most heavily congested urban areas. For months, she has delayed promulgating regulations while she sought a compromise interpretation of Proposition 103 that would minimize price adjustments.

Finally, the commissioner, under pressure to act, set a goal of doing so within 30 days of the Oct. 30 start of comprehensive Proposition 103 implementation hearings and named the actuarial team of experts to help her.

In the meantime, representatives of a coalition of minority and low-income groups have been insisting in testimony at the hearings that the present system of neighborhood-based pricing has resulted in racial and class discrimination and that Proposition 103’s pricing provision should be interpreted as literally as possible, even if some policyholders get rate increases.

The insurance companies first called last summer for retention of neighborhood-based pricing, no matter what Proposition 103 said, but since then most have bowed to the initiative and agreed to accept some revision in their pricing methods.

Hunter on Tuesday said he was supported in delaying a decision by the two other panel members--Michael Miller representing the insurers, and Deputy State Insurance Commissioner Ray Bacon, a top deputy to Gillespie. Miller and Bacon could not be reached for comment.

Hunter did not say what kind of compromise pricing solution the actuaries are contemplating. He lauded Allstate, State Farm and the Insurance Services Organization, the insurers that have been providing pricing information to the actuarial team, for their help.

Gillespie’s special counsel for the implementation of Proposition 103, Karl Rubinstein, responded to Hunter’s remarks by saying that while Gillespie is eager to proceed, she may prudently decide to wait if all the information is not in.

In another insurance development, the staff of Gillespie’s state Department of Insurance formally recommended that a request by insurers to raise assigned-risk auto rates by a statewide average of 112.3% be rejected.

The staff said such an increase could result in many drivers, unable to afford insurance, illegally becoming uninsured. The staff members said the companies that run the assigned-risk system--under which drivers who cannot buy auto coverage in the regular market are assigned to various companies in proportion to their share of the business--should propose less costly reforms.

The staff recommendation is subject to approval by Gillespie, who has not taken a position.