The insurance industry and its allies in the GOP leadership could have won, if they just hadn't been so greedy.

They could have come up with a bill to revamp Arizona's automobile insurance laws that would have satisfied enough Republicans--and maybe even a handful of Democrats--to get the necessary votes for approval in the last hours of the just-completed legislative session. And while they might not be able to stop Representative John Kromko from trying to enact a clone of California's Prop 103 insurance reform, they at least would have given constituents a reason to say no.

Instead, they tried to put out what was, at least in part, a scam.
"I don't understand what the Democrats want," whined Glendale Republican Karen Mills as she watched support for her package evaporate in the early hours of Friday morning. "We gave them the three things they want: a rate freeze, a consumer advocate and prior approval," the last to require companies to seek state permission before raising rates.

Yet even her own party leadership couldn't say that with a straight face.
House Majority Whip Chris Herstam, preparing for a joint TV interview with Senate Minority Leader Alan Stephens, asked a staffer to prepare a "crib sheet" for him on the provisions of the insurance bill. The internal memo suggested that Herstam avoid discussing the rate-freeze provisions of the bill.

"Don't you bring it up because it's been gutted," reads the memo. "It only addresses rates, not premiums." The difference is crucial. A state insurance regulator says rates are the basic figure for what a company charges for coverage. But the premium includes the various extra charges for things like how far someone drives each year, the motorist's accident record and even his or her age. The "rate freeze" is meaningless because it would have allowed a company to impose sharp price hikes in all the factors it uses to determine premiums, thereby increasing what motorists pay.

"If Stephens attacks this provision, your only comeback may be to say that it is patterned after the California initiative," the memo reads.

Herstam dodged questions about knowing the rate-freeze provision wasn't worth the paper it was written on, complaining instead how it wasn't right that someone took his copy of the memo.

Beyond that, the insurance company lobbyists who camped outside Mills' office for much of the session forgot it was in their interest to come up with a meaningful compromise. Mike Low, lobbyist for Allstate Insurance, complained the industry really hated having to get prior approval for rate increases. And that, he said, showed how they were dealing in good faith.

But the industry wouldn't settle for a simple bill. Instead, its lobbyists tacked on a host of provisions to overturn Arizona court rulings which gave motorists specific rights to collect under their insurance policies. Adding all that extra baggage didn't get them any more Republican votes and only served to ensure that the final package would be too distasteful for even the most business-oriented Democrats to support. "This thing had too many moving parts," Low conceded after the 27-28 defeat. "In hindsight, maybe we could have improved the bill."

But Don Isaacson, lobbyist for State Farm, was unapologetic for trying to load the bill up with industry goodies. "Reform works both ways," he insisted.

Even Mills didn't understand that the road to legislative success was taking out the unpalatable sections rather than try to bribe House Minority Whip Debbie McCune--the leading opponent of the Republican plan--with more largely meaningless concessions. "Debbie said she wasn't interested in anything," Mills said. "So, as far as I'm concerned . . . " Mills raises her thumb to her nose and wiggles her fingers.

But it may be the Democrats who end up making the gesture at Mills, Isaacson, and Low. Without a bill, the only game in town belongs to Democrat Kromko, who will start gathering signatures late this summer for a wholesale revamping of the insurance code. And it's for sure that whatever Kromko wants, the industry will hate.

Having told the Democrats to take a flying leap, that left it up to the Republicans to pass the bill by themselves, the way they put out the budget and revenue package. But as Thursday evening turned to Friday morning, it became painfully obvious to the GOP leadership the votes weren't there. Two of their members were absent. And others found something to hate in the multiprovision bill. Those in this last group were marched into a back office, one by one, and asked what it would take to get their support.

Bill Mundell and Susan Gerard knew exactly what it would take: Resurrect a measure to increase the power of the Department of Environmental Quality over polluters and increase the size of some fines. The measure actually cleared both the House and Senate earlier this session. But when lawyers for industry couldn't strip some provisions from the bill, they decided instead to lean on Senate Republicans to kill the measure. Senate President Bob Usdane was happy to oblige, burying it by refusing to appoint a conference committee to work out the differences between the House and Senate versions of the bill.