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NEWS RELEASE
Aug 31, 2000


CONTACT: Pam Pressley - 310-392-0522 x307

Compromise On Public Disclosure of Insurer Market Conduct Exams Reached

An advocate for the Foundation for Taxpayer and Consumer Rights (FTCR) prevailed over more than two dozen insurance industry lobbyists in winning a legislative compromise for public disclosure of market conduct exams of insurers performed by the Department of Insurance. Such exams showed misconduct in the wake of the Northridge earthquake by insurers, but were withheld from the public by former Insurance Commissioner Quackenbush.

Senate Bill 1805 (Escutia) places final market conduct exams of claims practices and settlements of those examinations on the Internet. It will also require the state auditor to determine the propriety of the commissioner's termination or suspension of any exam. SB 1805 is expected to proceed to the Governor's desk tonight.

"This is much needed sunshine on insurer abuses and it gives the public a window into the Department of Insurance and the behavior of insurance companies," said Doug Heller of the FTCR. "This must however be the beginning of reform, not the end. Shedding sunlight on insurance company abuses is invaluable but does not replace the need to provide more remedies for policyholders who have been cheated by unethical insurers. This does not address the cloud of industry influence that may hang over an unethical insurance commissioner like Mr. Quackenbush. We still need a full policyholder bill of rights in the future. If the legislature is unwilling to go further than this reform next year, we may have to go directly the voters to prevent another scandal."


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