Campaign Funding Updates Will Track Insurance Industry’s Attempt to Corrupt the Office of the Insurance Commissioner

The Foundation for Taxpayer and Consumer Rights (FTCR) unveiled the QUACK-O-METER, a tool with which to measure insurance industry campaign contributions to candidates for California Insurance Commissioner. FTCR will update the QUACK-O-METER on a daily basis, or as often as contributions are electronically filed with the Secretary of State. FTCR will fax the updates to the news media and make it available to the public.

To receive a copy of the most recent QUACK-O-METER e-mail FTCR.

“Every insurance industry contribution to a candidate for commissioner creates a potential conflict of interest,” said Jamie Court, Executive Director of FTCR.

Only candidates who have received more than $250,000 in total contributions will be tracked. The more insurance company money received by a candidate, the more he will look like disgraced former Insurance Commissioner Chuck Quackenbush on the Quack-o-Meter. In addition to the visual update, FTCR will provide information about the role of the insurance industry in the campaign and potential conflicts of interest that may arise from the insurance contributions.

“Insurance companies that donated to Quackenbush received special treatment, and those companies want special treatment from the next commissioner. California voters should know how much the insurance companies are investing in the candidates,” said consumer advocate Doug Heller of FTCR.

Among the potential conflicts of interest tracked by the first QUACK-O-METER are:

• Mercury Insurance ($150,000 donated to date) Mercury is the sponsor of legislation, AB 1488, which would increase rates for drivers who file an accident claim, even when they are not at fault. Whether or not the bill is successful, Mercury will likely bring this controversial proposal to the Commissioner for regulatory approval.
  

• Farmers Insurance ($135,404 donated to date) Farmers has asked for four homeowner rate hikes this year, totaling a 26% increase. Farmers and other contributors will likely pressure the next Commissioner to accept rate hikes such as these on a regular basis.
  

• 21st Century ($30,000 to date) 21st Century just announced that it will be exiting the homeowners insurance business, which may require the Commissioner to take actions ensuring that the transition for 21st Century policyholders is fair and appropriately handled. 21st Century (then 20th Century) had one of the worst records of dealing with homeowner policyholders after the Northridge earthquake, according to Dep’t of Insurance data. At that time, Commissioner Quackenbush, a recipient of 20th century contributions, covered up these findings.
  

• St. Paul Companies ($25,000 to date) The St. Paul group of insurance companies currently has 10 separate regulatory filings before the Department of Insurance.
  

• Allstate ($20,000) Allstate recently withdrew a new auto insurance rate plan as it waits for the Department of Insurance to take a position on a highly contested rule governing whether or not insurers can surcharge drivers who did not previously carry auto insurance.

FTCR noted that the insurance industry’s financial support of Quackenbush led him to protect insurance company interests over consumers even after Department of Insurance staff uncovered massive levels of misbehavior within the industry. The insurance commissioner is the only statewide elected official with express regulatory duties over one industry. FTCR has sponsored legislation to bar the insurance industry from contributing to insurance commissioner candidates, but the Assembly has defeated the proposal in each of the last two years.

Among the three candidates who have raised more than $250,000 to date, only Tom Calderon (Democrat) has accepted insurance industry money. He has raised $799,324 from insurance industry sources, or 50.0% of his total fundraising. Tom Umberg and John Garamendi (both Democrats), are the other candidates with significant fundraising to date.

Other candidates for the post are:Bill Winslow (Dem), Wes Bannister (Republican), Gary Mendoza (Rep), Stefan Stitch (Rep), Steve Klein (American Independent), David I. Sheidlower (Green), Dale F. Ogden (Libertarian), Raul Calderon, Jr. (Natural Law).

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