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Jun 12, 2000
CONTACT: Doug Heller - 310-392-0522 x309
Documents Refute Quackenbush's Alibi
Insurance Company Examinations, Released by Senate, Give Devastating Account of Rampant Violations By Insurers After the Northridge QuakeSacramento--Commissioner Quackenbush's main alibi in defense of his special deals with insurance companies after the Northridge earthquake -- that he had insufficient evidence against insurance companies to fine them -- was refuted today when Senator Martha Escutia released Executive Summaries of the detailed examination reports conducted by the Department of Insurance (DOI) Market Conduct Bureau. According to the documents, the formal examinations of State Farm, Allstate and 20th/21st Century provide thorough documentation in support of high fines against the companies and a massive victim restitution fund to remedy cheated policyholders.
"Until now Mr. Quackenbush has claimed that the state did not have sufficient evidence to take serious action against insurance companies. These exams are the smoking guns that expose the insurance companies' bad behavior after the Northridge quake," said Douglas Heller of the Foundation for Taxpayer and Consumer Rights. "Insurance companies signed a sweetheart deal when they agreed to making tax-deductible donations to Quackenbush's foundations, because, as these reports show, they had a lot to hide."
Contrary to insurance companies' descriptions of these reports as generic negotiating tools, the executive summaries indicate that the Department, in fact, conducted full-scale investigations between November 26, 1997 and November 18, 1998 into the companies' behavior. The exams show violations of a variety of claims handling laws and regulations. For example :
1. Make sure that Northridge victims are fully paid for unresolved and low-balled claims;
2. Make sure that insurance companies are punished for their misbehavior;
3. Pass new consumer protection legislation to prevent this kind of tragedy in the future;
4. Determine if Mr. Quackenbush should be removed from office," said Heller.
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