The prospect of broad new powers has attracted two Democrats,
two Republicans and four minor-party candidates to the June 8 primary.

Sacramento, CA – California’s elected insurance commissioner — one of the
most powerful jobs of its kind in the nation — is likely to get even
more authority over the next four years as President Obama’s new
healthcare law takes effect.

The prospect of broad new powers has
drawn four major-party candidates seeking their parties’ nominations
in the June 8 primary election: Democrats Hector De La Torre and Dave
Jones, and Republicans Brian D. Fitzgerald and Mike Villines.

The
top vote-getters in each primary will face off, along with four minor
party candidates, in the November general election. All the candidates
but Fitzgerald were state Assembly members forced out by term limits
this year.

Most of the key provisions of Obama’s reform program
will kick in during the next insurance commissioner’s four-year term.
Much of the work will fall on the states and their insurance regulators.

"There’s
an added dynamic," said De La Torre, of South Gate. "The insurance
commissioner will have a significant role … one where you can do more
good for millions of Californians."

The insurance commissioner has
plenty of authority even without any new duties. Though not well known
by the public, the commissioner and the Insurance Department affect
nearly every Californian who insures a car, a home, property, life or
health.

The department is one of the largest state
bureaucracies, with 1,150 employees, a $210-million annual budget and
principal offices in San Francisco, Sacramento and Los Angeles. The
commissioner’s job comes with an annual salary of $139,189.

Under
Obama’s national healthcare reform, the commissioner must implement
protections for people who have insurance and set up nonprofit exchanges
that will use group buying power to offer economical coverage for those
who are uninsured.

The candidates all endorse efforts to give
the commissioner wider powers to oversee all types of healthcare
insurance. The insurance commissioner now regulates only conventional
health insurance companies, particularly those that sell coverage to
people who get their insurance as individuals and not through employer
group plans.

Health maintenance organizations, the most widely
used type of coverage, are the responsibility of the state Department
of Managed Health Care, whose director is appointed by the governor.

California
is one of only 10 states to have such divided oversight, a situation
that could be remedied if the Legislature approves and the governor
signs a new law that shifts all regulatory power to the insurance
commissioner, candidate Villines said.

"It makes sense with all
the federal healthcare coming down," he said.

Having two
government agencies doing parts of the same function is "very confusing
to voters, and industry is able to take advantage of the separation,"
Jones said.

Creating a single, elected health insurance regulator
could prove to be a difficult task. Insurance companies and even some
consumer advocates have a stake in keeping the current system, industry
observers note. Plus, an incoming governor might not be eager to give up
his control over HMOs.

Jones, though, said he wants to go beyond
implementing the new federal laws on healthcare. He’s pushing lawmakers
and the governor to give the insurance commissioner new powers to
approve or reject insurer requests for rate increases, such as the
recent effort by Anthem Blue Cross to raise premiums on individual
policies in California by as much as 39%.

Jones would subject
health insurance rates to the same detailed approval process that
applies to automobile, home and other types of property and casualty
insurance under Proposition 103.

Jones’ proposal, in a bill now
before the Legislature, is supported by De La Torre and Fitzgerald. Last
year, Villines voted against a nearly identical measure.

Proposition
103, an initiative approved by voters in 1988, turned the job of state
insurance commissioner from a governor’s appointee to an elected
office. The initiative also transformed parts of the
insurance industry into a highly regulated business, similar to electric
utilities.

All four candidates praised Proposition 103 for
bringing fairness, stability and competitive rates to California’s
insurance market.

"I’ll be working to impose rate regulation on
health insurance and healthcare plans to rein in the excessive rate
increases that have afflicted California consumers year after year for
the past 10 years," Jones said.

Villines said the next
commissioner needs to pursue a balanced approach that protects consumers
but ensures companies can compete and earn a fair rate of return on
their investments. He also would encourage insurers to innovate.

"I’d
like to see new products out quicker," he said. "The more you have
competition, the better it is for the consumers."

A newly
empowered state Insurance Department needs a solid administrator who
knows the institution, not another "termed-out legislator," said
Fitzgerald, a veteran attorney of the department.

"My concern is
you need somebody from the outset who knows how to get things done," he
said.

Fitzgerald, who has spent less than $5,000 on his campaign,
conceded that his candidacy is a long shot.

Jones and De La Torre
each have raised more than $600,000 so far and have put a modest number
of television commercials on the air. Villines, the expected GOP choice
in the primary, plans to spend most of the $250,000 he raised so far on
the campaign for the November general election.

All four
candidates have pledged not to take campaign contributions from the
insurance industry, which has not endorsed anyone in either of the two
primaries. Nor has any candidate yet been endorsed by major consumer
advocates, such as Proposition 103 author Harvey Rosenfield.

Though
California has had just three elected insurance commissioners in the
last 22 years, it’s already clear that whoever runs the Insurance
Department can have a huge effect on a big part of the California
economy, said Amy Bach, executive director of United Policyholders, a
consumer advocate.

"The department can cut through a lot of red
tape for people," she said. "The department can save people a lot of
money."

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