Questions 4, 5 may fall short of goals

Stephen Curran and Christina Littlefield

Friday, Oct. 15, 2004 | 9:47 a.m.

Two ballot initiatives touted by trial lawyers as a panacea for Nevada's sky-high insurance rates would, if passed, fall short of their advocates' stated goals, according to two opinions released by the state Legislative Counsel Bureau.

The two initiatives, commonly known as Questions 4 and 5, have been portrayed as either benefitting consumers or as a cleverly disguised measure that would disrupt tort reform in Nevada.

Question 4, The Insurance Rate Reduction and Reform Act, would change the state Constitution to require a 20 percent reduction in insurance rates on cars, homes and businesses. If the ballot question is approved next month and again in 2006, the 2002 law that put restrictions on lawyers against physicians could be repealed if insurance companies do not lower their medical malpractice insurance rates by 10 percent.

The act would also provide a 20 percent "good driver discount" to relieve drivers from high auto insurance rates for drivers who had not been at fault in car accidents that resulted in bodily injury or death in the past three years.

But in a copy of the opinion provided to the Sun, the counsel bureau stated it "cannot conclude that the ultimate passage of the Reform Act would actually reduce the premiums paid for motor vehicles insurance by drivers in this state."

Question 5, meanwhile, would stop the state Legislature from imposing any limits on the amounts a jury can award in lawsuits and would prohibit the Legislature from imposing a cap on fees earned by doctors.

In the opinion, the counsel bureau said that "the provisions of Ballot Question 5 would not, in any substantive way, provide greater protections or penalties against the filing of vexatious and frivolous lawsuits."

Larry Matheis, executive director of the Nevada State Medical Association, said he wasn't surprised by the opinions. He said his organization has always viewed the ballot measures as incapable of lowering insurance premiums or stopping frivolous lawsuits.

"I think that has been the consensus from everyone except the trial lawyers who brought up the initiative," he said.

Matheis said that in addition to being ineffective Question 4 may be unconstitutional and Question 5 may limit the power judges already have to sanction lawyers who file frivolous lawsuits to the court.

Matheis said he believes those behind the ballot measures are really just trying to circumvent the medical malpractice liability limits established by the Legislature.

If passed, Matheis said the measures would effectively tie legislators' hands.

But Gail Tuzzolo, campaign manager for the "Yes on 4 and 5" effort, said similar legislation led to insurance premium rollbacks in California and prevented insurance companies from increasing rates.

"We believe it is going to work and we can't see how it wouldn't work," Tuzzolo said. "We all know that insurance companies are making oodles of dollars on us in Nevada and there's no one to regulate them."

Tuzzolo said the legislation only reverses the previous caps on pain and suffering damages if insurance companies fail to provide the decreased rates they promised lawmakers.

"What we're saying is, if they're not going to give us the reduced rates, then give us our rights back."