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Dec 15, 1998
Suit Alleges Insurance Commissioner Qauckenbush Secretly Raising Rates and Slashing Coverage, Costing Consumers Millions
Suit Alleges More than 10,000 Secret Rate Actions in Past Two YearsThe Proposition 103 Enforcement Project, a project of The Foundation for Taxpayer and Consumer Rights, filed a lawsuit this week against Insurance Commissioner Chuck Quackenbush revealing that the Department of Insurance has systematically and secretly approved approximately ten thousand insurance company applications for auto, homeowners and business insurance, costing consumers millions and millions of dollars in rate increases.
In just one of the many examples cited by the Project in the lawsuit, the Commissioner approved 20th Century Insurance Companyís request for a 6% rate increase for its homeowners insurance without giving the public notice of the increase. In another example cited by the Project, the Commissioner gave the public "notice" of a request by USAA General Insurance Company of a 10% rate decrease for its personal auto line of insurance, and yet he approved a 10% rate increase for USAA General. The impact on consumers of this one 10% rate increase alone is approximately 45 million dollars.
"Quackenbush's flagrant disregard for the law has cost consumers tens and probably hundreds of millions of dollars in illegal rate increases," said Lillian Salinger, staff attorney for the Project. "The Commissioner has been secretly approving rate increases behind consumersí backs; an attack against the very heart of Proposition 103, which is a protection against unfair rate increases," said Salinger.
The following is just some of the evidence which supports the Project's lawsuit:
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