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Insurance Commissioner Lara Gives Insurance Industry Money Back, But Questions Remain About Circumstances Of Influence-Peddling At Agency

Wed, 07/10/2019 - 09:37
Posted in:
Ricardo Lara

Los Angeles, CA -- Consumer Watchdog said Insurance Commissioner Ricardo Lara’s decision to return over $54,000 in contributions from donors tied to a company seeking the Commissioner’s approval for an acquisition was an “important first step that protects the credibility of the elected position you hold.” The non-profit advocacy organization urged the Commissioner to return the money in a letter yesterday. In a follow up letter, Consumer Watchdog asked Commissioner Lara to clarify the circumstances under which the donations from an insurance executive and the wives of industry executives with business before him were offered or solicited.

“A nursery school administrator from New Jersey, a production company president from Connecticut, and her insurance executive husband, don’t just max out on contributions to an Insurance Commissioner from California with the power to approve a change of ownership for the company they’re all connected to. The contributions look like they were intended to covertly grease the wheels for that acquisition. The public and policyholders you are legally bound to protect deserve an explanation of how and why these contributions came to you,” wrote Consumer Watchdog.

Download the full letter: https://consumerwatchdog.org/sites/default/files/2019-07/7%3A9%3A19LettertoCommissionerLara.pdf  

Applied Underwriters, the company seeking Commissioner Lara’s approval for its proposed acquisition, has faced Department of Insurance enforcement actions. Applied Underwriters settled an enforcement action brought by the Department for bait and switch marketing in 2017 and the company is currently fighting legal actions brought by five other businesses it insured. 

“Three of the donors - Stephen and Carol Acunto and Theresa DeBarbrie - are connected to Applied Underwriters through the Boards of Directors of other insurance companies controlled by Steven Menzies. Menzies currently owns a minority share of Applied Underwriters and stands to gain control of the company if it is successfully spun off from Berkshire Hathaway. Were the contributions made at Mr. Menzies’s suggestion? Did the $54,300 originate with him? It would be illegal money laundering if Mr. Menzies repaid the Acuntos and Mrs. DeBarbrie for their contributions to your 2022 campaign,” Consumer Watchdog’s letter continued.

“Your job is to make sure the insurance industry’s books are in order. You have a duty to fully answer and be accountable for your own. The public deserves to know whether the donors acted unilaterally, or if the contributions were solicited and by whom. 

“We would expect you to want the answers to these questions too. We ask you to investigate and inform the public: 1) If you or your representatives met or communicated with the donors, or Mr. Menzies; 2) If Applied Underwriters’ pending matters before the Department, or IHC business in California, were discussed; 3) How, when, and where the contributions were offered, for example at a fundraising gathering or meeting; or 4) If the contributions were simply mailed with no other contact between you or your representatives and the donors.

“Full transparency is necessary to address any appearance of impropriety or undue influence and lay this matter to rest,” the letter concluded. 

The insurance industry contributions totaling $54,300 include:

  • $15,500 from Stephen Acunto, managing director of the Constitution Group, which wholly owns Constitution Insurance Company and whose directorate interlocks with Applied Underwriters and California Insurance Company. Acunto is also a spokesperson for Applied Underwriters.
  • $15,500 from Carole Acunto, identified in campaign reports as the president of a production company and the wife of Stephen Acunto.
  • $15,500 from Theresa DeBarbrie, identified in campaign reports as an administrator at a nursery school. She is married to Carl DeBarbrie, an insurance broker for Applied Underwriters and former executive with Constitution Insurance Company and California Insurance Company.
  • $7,800 from Darlene Graber, identified as a homemaker in campaign reports and the wife of Larry R. Graber, Senior Vice President and Director of Independence Holding Company which has multiple health insurance subsidiaries. 

Download Consumer Watchdog’s July 8, 2019 letter calling on Lara to return the contributions HERE.

Read the San Diego Union-Tribune story disclosing the contributions: https://www.sandiegouniontribune.com/news/watchdog/story/2019-07-05/states-top-insurance-regulator-accepted-tens-of-thousands-of-dollars-from-industry-executives-records-show
 

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