California Panel Supports Candidate for State Insurance Commissioner

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San Jose Mercury News

SACRAMENTO, Calif.–The state Legislature took its first step Tuesday toward installing a new leader at the troubled Department of Insurance by supporting the nomination of retired appeals court Judge Harry W. Low to replace Charles Quackenbush as insurance commissioner.

A special Assembly committee unanimously backed Low for the job after the 69-year-old Democrat vowed to be a tough-but-fair leader who would protect consumers, boost department morale and shore up the insurance industry.

Appearing in the same Capitol auditorium where lawmakers earlier this year grilled Quackenbush about insurance deals that ultimately forced his resignation, Low fielded 85 minutes of gentle questioning from legislators who praised him for his integrity.

“I will use my best efforts to restore trust and confidence to the Department of Insurance,” said Low, who was nominated by Gov. Gray Davis to fill out the final 28 months of Quackenbush‘s elective term.

Low easily cleared the first legislative hurdle to taking over the job. He will appear before a Senate committee today and is expected to be approved by both houses of the Legislature before they wrap up work for the year next week.

Once confirmed, Low will have the tough task of rebuilding the 1,100-member department that has been battered by the biggest political scandal to hit Sacramento in years.

Quackenbush, a former Silicon Valley assemblyman, resigned last month when it became clear legislative hearings rapidly were moving toward an impeachment vote.

In its final report released Monday, the Assembly Insurance Committee concluded that Quackenbush abused his post by allowing earthquake insurance companies accused of short-changing victims of the 1994 Northridge earthquake to avoid massive fines by paying much smaller amounts to non-profit foundations created by his top aides.

Rather than going to consumers and education programs as proposed, much of the $ 13 million sent to the foundations was used for television commercials featuring Quackenbush, political polling and donations to charities unrelated to earthquake safety.

During the hearing, Low said he believes he has the legal power to throw out the settlements if the companies fail to do so on their own. Clark Kelso, a law school professor who agreed to run the Insurance Department until Davis was able to find a permanent replacement, has been trying to get the companies to voluntarily set aside the agreements.

Low also said he wanted to see if it was possible to throw out contracts Quackenbush approved before he left office that set aside up to $ 700,000 to cover legal expenses for himself and his top aides, some of whom are still facing potential charges from an ongoing joint federal-state-local criminal probe of their actions.

During the hearing, Low was hailed by a series of witnesses — including Attorney General Bill Lockyer, former Secretary of State March Fong Eu and leaders of the insurance industry — for his integrity, honesty and intelligence.

Eu joked that she and Low were both clean politicians because they were coincidentally born in the back of the same hand laundry in the Sierra Nevada town of Oakdale.

In an effort to avert any possible questions about his integrity, Low told the committee he will take no political contributions and is leaning against running for the office in 2002.

Low retired as an appeals court judge in 1992 after 26 years on the bench. For the past eight years, Low has worked in San Francisco as a private mediator for one of the largest arbitration and mediation firms in the country. He’s also worked as head of the San Francisco Human Rights Commission and the city Police Commission.

While Low said protecting consumers would be one of his top priorities, some pressed him for assurances that he would be more than an impartial mediator of the insurance industry.

“You’ve indicated that you will be open, fair, equitable, even-handed,” said Assemblywoman Sheila Kuehl, D-Santa Monica. “But I haven’t heard the word tough.”

Doug Heller, an attorney with the Foundation for Taxpayer and Consumer Rights, also said it remains to be seen if Low’s background as a judge and mediator will be a good fit for the job.

“Integrity alone does not make a good insurance commissioner,” he said.

Consumer Watchdog
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