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Ralph Nader > In the Public Interest > The Insurance Industry Eyes a PR Campaign

The irrepressible Clint Reilly, who managed to spend a war chest of $70 million for the insurance companies and lose three ballot referendums in California, is drumming up new business for this firm — Clinton Reilly Campaigns. In a private 13 page memorandum, titled “Agenda 1989: The Lessons of the 1988 Insurance Campaign”, he advises his insurance company clients how they can make more money for Clint Reilly.

No mea culpas for Clint in these pages. Only new programs and organizations so that “public education, coalition building and political action will become an integral part of doing business in California.” Which means more lucrative work for the unabashed Clint and his associates right after running the greatest insurance industry debacle in American electoral history.

Fair enough. Reilly has been reading the official reports showing his clients reporting historic record profits for 1986, 1987 and the first half of 1988. He wants a piece of that pie. What is astonishing, though, is the pandering nature of his advice to his clients.

His agenda calls for “a massive reshaping of public sentiment.” The poor, misled voters of California need re-education so that they can appreciate the sacrifices which their insurance companies are enduring. New alliances for the insurance industry need to be built– including a special effort to build “relationships with consumer groups and consumer spokespersons” not connected with the November victory behind the insurance reform measure called Prop. 103.

Special attention needs to be paid to turning around the “working journalists” in both television and print media, he urged.

And what is the message that this conglomerate of organizational tools, including phone banks, forums, millions of mailings, private meetings with editorial boards and business organizations, wants to project? Enter a new proposed group which Reilly wants to call the Insurance Cost Control Commission of California. This entity would push for auto insurance reform by going after the insurance moguls favorite dragons — court costs and lawsuits. There is no mention in Reilly’s puff sheets about the legendary inefficiency of the insurance companies who manage to return only 60t of the premium dollar to their claimants.

Nor does Reilly devote a single word regarding the loss prevention responsibilities of the insurance companies. The legitimate way to cut costs is not to reduce the legal rights of consumers to collect for their injuries and property damage. The way to cut costs is to turn the vast political and economic muscle of this gigantic industry behind the drive for safer motor vehicles, safer highways, more protective bumpers and less repair-prone cars. It should be the sentinel for safety whenever issues come up such as speed limits, drunk driving and mandatory safety and inspection standards. The insurance lobby’s tepid response to loss prevention drives can be contrasted with their vigorous drives to preserve their profits and perks, their non-regulation and their exemption from the anti-trust laws.

If I may attach an addendum to Reilly’s memo, it would be this advice to the insurance industry — remove the waste and inefficiency that inflate your operations, invest funds and talent behind injury and property damage prevention and adhere to sound actuarial principles instead of irrational classifications that penalize good drivers so that your revenues can be maximized.

Instead of following these pathways, the insurance companies are likely to accept Reilly’s trump card which is to create a highly visible spokesperson for the California auto insurance industry who would give it “a human face.” He suggests either an industry executive who would become the industry’s “Lee Iacocca” or an actor type like Cliff Robertson.

“I am convinced”, says Reilly “that the Insurance Industry must either hire a Hollywood spokesperson or create a visible Insurance Personality, such as Don McComber, who comes to symbolize the Insurance Industry in the public mind.”

Well, folks, get ready for the Insurance Kingdom’s version of Smokey the Bear. For $70 million in one state during one election campaign just produced a fog that millions of voters saw right through.