Assembly Speaker Must Close Revolving Door Between Lawmakers and Insurance Industry, Say Consumer Advocates;

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Former Assembly Insurance Committee Chair Took Lucrative Job With Industry

Santa Monica, CA — Consumer advocates called on Assembly Speaker Fabian Núñez to close the revolving door between lawmakers and industry that allowed Assemblyman Juan Vargas to accept an executive position at one of the nation’s largest insurance companies immediately after leaving his post as Chair of the Assembly Insurance Committee.

Vargas received $300,000 in campaign contributions from the insurance industry in his four years as chair of the insurance panel. He consistently favored the industry, including blocking legislation proposed by victims of the Southern California wildfires that would have helped disaster victims through the homeowner claims process.

Auto insurers also benefited. “As Chairman, Mr. Vargas rallied Assembly support for an insurance industry-supported law (SB 841) in the 2003-04 session that allowed auto insurers to unfairly surcharge low-income good drivers because they had no prior insurance coverage or a lapse in coverage. The law was eventually invalidated by the courts as a violation of voter-approved Proposition 103,” wrote the Foundation for Taxpayer and Consumer Rights (FTCR) to Speaker Núñez.

“We may never know how much before-the-hiring influence his new position with Safeco had, but in accepting this presumably lucrative job, Mr. Vargas has cast a shadow over his tenure in the Assembly and certainly over the activities of the Committee in recent years,” the letter charged.

FTCR called on Speaker Núñez to set new house rules barring members of the insurance committee from accepting campaign contributions from the insurance industry, and require the incoming Insurance Committee chair, Assemblyman Joe Coto, to publicly commit that he will not work for the insurance industry when he leaves the Legislature.

“As Speaker, it is your duty to maintain the integrity of the Assembly. Mr. Vargas’ new employment is an attack on your House and we urge you to take strong measures to ensure that it is fortified by an ethical standard that prohibits this from happening again,” wrote FTCR.

Read the letter:

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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