Bill seeks voter OK for appointed insurance chief

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Sacramento Bee

With scandals swirling around state Insurance Commissioner Chuck Quackenbush, California moved a step closer Wednesday to changing his powerful post from an elected job to a governor’s appointment.

The plan — which could be sent to voters as early as November — was unanimously approved by the state Senate Elections and Reapportionment Committee after a spirited debate. It would apply only to future insurance commissioners, not Quackenbush, whose elected term ends in early 2003.

“The present insurance commissioner has received over $6.4 million in campaign contributions from the very people that he is charged to regulate. How do you deal with that — the inherent conflict that is created by virtue of that?” said state Sen. Jackie Speier, a Daly City Democrat who is asking the Legislature to put the proposed constitutional amendment on the ballot.

But some consumer advocates — who in 1988 supported voter-approved Proposition 103 that made the insurance commissioner an elected post — vehemently argued against returning to a governor’s appointment. They said voters would forever lose the chance to elect reformers and consumer advocates to the office and that an appointed insurance chief could have even closer relations with the industry.

“In the midst of the greatest insurance corruption scandal in California history, a handful of lawmakers in Sacramento have voted to punish the voters of the state rather than the insurance companies or Mr. Quackenbush,” declared Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer Rights, after the vote.

Sara Bacon, a victim of the 1994 Northridge earthquake, agreed. She told the committee that she and many other quake victims who were forced to battle insurance companies don’t want to lose their say at the ballot box over who will be the future regulators of the industry.

“What kind of message does this give to still-suffering earthquake victims, when one week legislators are in Northridge to hear our concerns and the next week they are back in Sacramento proposing legislation that takes away our voice as voters?” she said. “It’s not going to solve the problem.”

Opponents also argued that more insurance industry campaign contributions would simply shift to the governor’s race under Speier’s plan.

But committee members weren’t swayed, casting a bipartisan, 5-0 vote to advance Speier’s measure, SCA 19, to the Senate Constitutional Amendments Committee.

“You can’t have it both ways. If you trust the voters to make a decision and put it before them once, why would you not — given the change in circumstances — let them make that call?” said Sen. Kevin Murray, the Culver City Democrat who chairs the elections panel.

Speier, chairwoman of the Senate Insurance Committee, said most other states don’t have elected insurance commissioners, and that other key California regulatory posts are appointed by the governor — not elected.

She added that the Senate would have the right to confirm or reject the governor’s choice for the job.

Edward Lascher, a California State University, Sacramento, professor who has written about politics and the insurance industry, said candidates running for an elected insurance commissioner post can face a major problem.

“To mount a credible statewide campaign, any candidate needs a lot of money. The fact is that there simply aren’t many good sources for this post from people outside the industry,” he said in support of Speier’s measure.

At least one insurance-related group — the Insurance Agents and Brokers Legislative Council — also formally supports the measure.

Scott Edelen, a spokesman for the state Department of Insurance, said Quackenbush has supported making the commissioner’s post an appointed position so that “the appointee would be able to focus solely” on the regulation of insurance.

Constitutional amendments require a two-thirds vote of the Legislature to be placed on the ballot, meaning that both Democrats and Republicans would have to continue to agree to keep supporting Speier’s measure for it to reach the voters.

In addition, the full Legislature would have pass the measure relatively quickly — by June 29 — to have the best chance for it to appear on the November ballot rather than in a future year’s election.

Consumer Watchdog
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