Kim Alexander

Insurance billionaire defends initiative spending

SACRAMENTO, Calif. George Joseph, the up by the bootstraps billionaire funding Proposition 33 on the November ballot, says he tried to find a way to change state insurance law without spending $32 million, but ran out of options. After failing to win permission from the courts and the Legislature to charge drivers based on their history of coverage, the nonagenarian founder of Mercury General Corp. spent $15.8 million of company money on a 2010 ballot measure that would have accomplished the same thing. That measure lost, with 48 percent of voters supporting it, but the narrowness of the defeat convinced him to come back this year. He has spent $16 million of his own money to bankroll a nearly identical initiative on the November ballot. “I tried to do it cheaper; I tried to do it through the Legislature,” Joseph said of his latest effort to roll back a provision of California’s landmark consumer protection law. Grinch. But Joseph, who is ranked by Forbes magazine as the 392nd richest American, said he is not in need of vacation homes or yachts: What he wants is a way for his company steal customers from the competition. A provision of Proposition 33 would permit the creation of a new policyholder discount for maintaining continuous coverage, meaning drivers would not lose out if they switched insurance companies. Joseph said his company would benefit from that because motorists now insured by other companies will be attracted by Mercury’s cheap rates. Those customers are also statistically likely to be low risk drivers. “They make a lot of comments about billionaires, millionaires, all that,” said Joseph, who was educated at Harvard but still carries a faint accent from his upbringing in rural West Virginia. “I’m 91 years old. I don’t have boats or jets; I don’t need them. But I do want to provide our company with a way to grow.” Joseph came closest to achieving his goal in 2002, when then Gov. Gray Davis, a Democrat, signed a Mercury sponsored bill that would have allowed insurers to offer a “continuous coverage” discount to anyone without a 90 day lapse in payments, even if they changed insurers. At the same time, drivers who had dropped insurance coverage in the past would have paid higher premiums. But that legislation, written by then Sen. Don Perata, also a Democrat, was struck down in the courts. Joseph said he is bankrolling this year’s initiative himself because rank and file Mercury employees grumbled about the millions the Los Angeles based company spent on the 2010 measure. “A lot of our people didn’t get very much of a bonus that year,” Joseph said. “There was a lot of criticism that we spent this money and it didn’t really help the employees any.” The former World War II bomber navigator spent 50 years turning Mercury into California’s fourth largest auto insurance company, pioneering the art of risk assessment and becoming one of the state’s wealthiest residents. The campaign in support of Proposition 33 has attempted to paint him as cheap jerseys generic cialis do they work. less expensive viagra. an eccentric workaholic with a strong belief in the value of competition. But critics say voters are unlikely to separate Joseph from the special interest he represents. “When you get to billionaire status, I think you’re pretty much indistinguishable from your company,” said Consumer Watchdog founder Harvey Rosenfield, who has been sparring with Joseph since the 1980s. Joseph stepped down as Mercury’s chief executive officer in 2006, pledging to spend more time lobbying for insurance industry interests. Even so, he comes to work each day in his 2007 BMW 7 Series. In addition to his direct campaign spending, he has given $2 million to the California Republican Party over the last two years. Kim Alexander, president of the nonpartisan California Voter Foundation, said she could not recall a time when voters have approved an initiative funded exclusively by a single rich individual. But she is not surprised that California’s most affluent keep trying. “It’s a gambit,” she said. “People who make it in business take risks, and nothing could be riskier than the California initiative process.”.
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