The new regulations promulgated by Commissioner John Garamendi are aimed at fulfilling the mandate of Proposition 103, which requires rates to be tied directly to driving record, frequency of use and number of years driving.

Norman Williams, a spokesman from Mr. Garamendi's office, explained that while a few leading insurance companies have threatened to sue; it is “difficult to argue that the regulations will do the harm that they believe.”

Mr. Williams noted that the Automobile Club, in addition to revising its rating factors, was able to give its 1 million customers a 7 percent premium decrease.

This will save customers an average of $134 per year, according to the department.

However, noted State Farm Insurance representative Bill Sirola, whose company opposes the regulation, “There is no question that territory–where your car is driven and garaged–is a very accurate indicator in the cost to insure.”

State Farm is reviewing all the actions they could take to stall the “hasty” passage of the proposal, as well as the possible options and outcomes, according to Mr. Sirola.

Insurers have only 30 days to submit new rating plans to Mr. Garamendi's office. They will have two years to implement the changes, according to his department.

The support of the Automobile Club, amidst all the hostility of the rest of the industry, is a “welcome change” which “validates” the commissioner's regulations, said Mr. Williams.