National effect seen in 10 percent return ruling. (1988 California Proposition 103 case could hurt free enterprise)

National Underwriter Property & Casualty-Risk & Benefits Management, October, 1994 by Haggerty, Alfred G.

SEATTLE--The California Supreme Court's recent ruling imposing a 10 percent rate of return on insurers represents "possibly the greatest single perceptual change in the way America does business in 50 years," an industry leader said. Gordon Stewart, president of the New York-based Insurance Information Institute, urged insurers to attack the court's ruling in a Proposition 103 case involving 20th Century Ins.

Co. before such reasoning takes hold. If the idea represented by the ruling takes hold, he added, "it will be very difficult to dislodge." The case involved the requirementin Prop. 103, which was passed in 1988, that rates be cut by 20 percent for the year 1989. (See NU, Aug. 29, page 1.) The California Supreme Court upheld regulations in which...

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