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home / insurance / in the media

Associated Press
May 18, 2000

by Steve Lawrence

Panel backs amendment for an appointed insurance chief


SACRAMENTO -- Responding to criticism of elected Insurance Commissioner Chuck Quackenbush, a state Senate committee has voted to make his job an appointive post.

The five-member Senate elections committee yesterday unanimously approved a constitutional amendment that would require the governor to appoint the commissioner after Quackenbush's term expires in January 2003.

The appointment would be subject to Senate confirmation.

Quackenbush has been under heavy criticism for letting insurers accused of mishandling Northridge earthquake claims avoid billions of dollars in potential fines by contributing to a foundation he set up.

About a third of the $12.8 million the insurers gave to the California Research and Assistance Fund paid for public service television spots that featured Quackenbush.

The nonprofit fund, ostensibly set up for consumer assistance and seismic research, has given nothing to earthquake victims.

Quackenbush has also been criticized for accepting campaign donations from the insurers he regulates.

The amendment, proposed by Sen. Jackie Speier, now goes to the Senate Constitutional Amendments Committee. If the Assembly and Senate approve the measure by June 29, California voters would consider it in November.

Speier said the change would eliminate the "gross conflict of interest" created by the flow of campaign contributions to the Republican commissioner from the insurance industry.

"I have a very difficult time trying to justify an elected commissioner that has sole responsibility to regulate an industry and continues to take contributions from that industry," she said. Speier, a Daly City Democrat, has expressed interest in the commissioner's job.

But consumer advocates contend that the change would give insurers exactly what they want.

"They always had their way in the days of appointed commissioners," said Doug Heller of the Foundation for Taxpayer and Consumer Rights.

California's insurance commissioners were appointed by the governor until voters approved Proposition 103, a 1988 ballot measure that made the office elective. The measure included sweeping changes in how insurance rates were established.

Heller said voters are not clamoring for a chance to reverse that decision.

Bill Powers, who testified against the current amendment for the Congress of California Seniors, said the last appointed commissioner, Roxani Gillespie, who was accused of being pro-industry, was one of the reasons 103 was approved.

Democrat John Garamendi became the state's first elected insurance commissioner in 1990. Quackenbush, a Republican, won the office four years later.

Quackenbush's campaign has received $6.4 million from the industry, a Senate analysis shows.

Near the end of his first race for commissioner, two-thirds of his contributions had come from industry sources.

Spokesman Scott Edelen said Quackenbush supports the amendment because it would allow the commissioner to "focus primarily on the business of insurance rather than politics and fund raising."

But he would not comment on claims that the measure was needed because of the commissioner's conduct.

Bill Packer, a spokesman for the Association of California Insurance Companies, said his group hasn't taken a position on the amendment but supports the concept of an appointed commissioner.

"Basically our feeling is that an appointed commissioner insulates the commissioner from political pressures," he said.

"This is a regulatory job," said John Norwood, a lobbyist for the Insurance Agents and Brokers Legislative Council, which supports the amendment. "We don't think it ought to be a political football."


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