The recommendations of the report released today by the California Assembly on the Insurance-gate scandal largely ignore the role of insurers and the need to reform the pernicious industry practices of low-balling Northridge earthquake victims highlighted by the scandal.

The Foundation for Taxpayer and Consumer Rights (FTCR) said the report’s recommendations were watered-down and offered too many equivocations to the insurance industry, though it appropriately placed blame on ex-Insurance Commissioner Chuck Quackenbush for his role in the debacle.

“At a very minimum this report should have called for public disclosure of market conduct exams and a ban on insurer contributions to the elected insurance commissioner,” said Jamie Court, FTCR’s executive director. “The recommendations appear carefully crafted to avoid reforms that might offend insurance companies even though the insurers’ role in low-balling Northridge earthquake victims was a central part of the scandal. The legislature must not miss this historic opportunity to better protect policyholders from abusive insurance industry practices. Mr. Quackenbush is not the only party to this scandal that unjustly profited from the pain of Northridge earthquake victims. The public deserves a policyholder bill of rights that protects consumers from insurer abuses.”

Last week, the California Assembly Elections Committee approved SB 953 (Speier), which limits to $250 contributions to the elected insurance commissioner by companies with business pending before the Department for a set time period. The bill could come up for a vote in the Assembly Appropriations Committee this week if it receives the appropriate rule waivers to be heard.

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