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home / insurance / in the media

San Francisco Chronicle
May 18, 2000

by Greg Lucas

Senate Panel Wants Insurance Chief Appointed, Not Elected

Sacramento -- Over the objection of some consumer groups, a plan to return the position of state insurance commissioner to an appointed post was unanimously approved yesterday by a state Senate committee.

If ultimately approved by voters on a statewide ballot, the constitutional amendment would make the state's top insurance industry regulator an appointee of the governor, as was the case before 1990.

``The authority to impose fines on the people (the commissioner) regulates and simultaneously receive campaign contributions from those entities, I submit to you, is a conflict,'' said state Sen. Jackie Speier, D-Hillsborough, the author of the proposal.

Speier said the idea for the measure stemmed from investigations by the Legislature and the attorney general's office into the actions of the current commissioner, Chuck Quackenbush, who Speier said has received $6.4 million in contributions from insurers.

Quackenbush, a Republican, has been under fire for allowing insurance companies to duck as much as $3 billion in fines by contributing $11.6 million to a nonprofit foundation.

Attorney General Bill Lockyer has gone to court to block further spending by the foundation, which was ostensibly created to aid victims of the 1994 Northridge earthquake, but has yet to spend any money on victims.

Instead, the foundation has spent $6 million. Half it went to earthquake preparedness television commercials featuring Quackenbush, and the remainder to a variety of nonearthquake-related entities, including $263,000 that went to a football camp attended by two of Quackenbush's children.

Speier has another bill to ban creation of such foundations without court or legislative approval.

If successful, a constitutional amendment returning the commissioner's post to an appointed position would not affect Quackenbush, since the amendment would only take effect after his term expires in 2003.

Speier's proposal to make the commissioner a gubernatorial appointee was called ``misguided'' by a representative of the Foundation for Taxpayer and Consumer Rights.

The foundation was created by the backers of Proposition 103. Approved by voters in November 1988, Proposition 103 rolled back insurance rates by 20 percent and made the commissioner's job an elected post.

``We've had the opportunity to elect two different commissioners,'' said Doug Heller, a spokesman for the group. ``It has turned out that one of them is particularly corrupt. If you had a rash of pickpockets, you wouldn't outlaw wallets.''

But Speier argued that only 12 insurance commissioner nationwide are elected and that the commissioner's job is largely regulatory in California.

When Gov. Gray Davis and lawmakers created the Department of Managed Care to regulate health maintenance organizations last year, Speier said, they didn't make that regulatory post an elected position.

Her argument won support from Republicans on the Senate Elections and Reapportionment Committee.

``The governor ought to appoint all these regulatory positions, and the governor ought to be held accountable, whoever that governor is,'' said state Sen. Chuck Poochigian, R-Fresno.

The constitutional amendment, SCA 19, must be approved by two more Senate committees and win a two-thirds vote of the full Senate and Assembly before it can be placed on the next available statewide ballot.

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