Insurance chief appoints figure from industry;

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The San Jose Mercury News (California)

California’s newly elected insurance commissioner, Republican Steve Poizner of Silicon Valley, promised to create a non-partisan agency that is “fiercely independent from those being regulated.”

But in one of his first moves, the potential gubernatorial candidate in 2010 has appointed a longtime insurance industry representative, Bill Gausewitz, as his special counsel, a top legal position in his office. Poizner — who presides over the obscure but powerful agency that regulates the state’s insurance industry — also selected as his chief of staff a former high-level Republican staffer in the state Senate.

Poizner said Gausewitz will be one of more than a dozen senior aides advising him, representing a variety of backgrounds and viewpoints. He called Gausewitz a “brilliant lawyer” with extensive knowledge of the insurance industry and state government.

But the appointments have prompted questions about Poizner’s commitment to create a centrist, independent office. One leading consumer rights advocate who endorsed Poizner instead of Democrat Cruz Bustamante was incensed by the choice of Gausewitz in particular, saying it creates a fox-guarding-the-henhouse scenario.

“It contradicts what Poizner promised to the public,” said Harvey Rosenfield, the author of Proposition 103, the landmark 1988 measure that established regulations for the auto insurance industry. “He’s proposing putting an industry guy in charge of regulating the industry. That’s devastating.”

Responded Poizner: “I definitely understand his passion and it’s heartfelt, but that’s just not the case. I’m hiring a large, diverse team of people.”

Criticism vs. image

The criticism of Poizner is especially noteworthy in light of his efforts to project a moderate, bipartisan image. A Silicon Valley entrepreneur who sold a start-up he created for a reported $1 billion before turning to politics, Poizner is regarded as an up-and-comer in the Republican Party. He is the only statewide GOP officeholder other than Gov. Arnold Schwarzenegger and is an oft-mentioned potential contender for governor in four years, when Schwarzenegger will be termed out of office.

Poizner took pains during his fall campaign to reassure the public he would follow a centrist course as insurance commissioner. He refused contributions from the insurance industry, using millions of his own fortune to mount his campaign.

“I intend to run the Department of Insurance in a non-partisan manner, independent and citizen-focused,” Poizner said during his January inauguration at the San Jose Tech Museum of Innovation. “This office must always be fiercely independent from those being regulated.”

Gausewitz has headed Schwarzenegger’s Office of Administrative Law since 2004, but before that he spent more than a decade working for the insurance industry. From 1990-98, he was a lobbyist for Farmers Insurance Group, and from 2000-04, he worked in the government relations shop of the American Insurance Association. Between those jobs he was a policy aide to then-Republican Senate Leader Ross Johnson. Gausewitz earned bachelor’s and law degrees from UCLA.

Pledge of neutrality

Gausewitz, who will earn about $128,000, disputed that he would represent the insurance industry in his new job. If Rosenfield “believes I’m going to put the interests of the insurance industry ahead of the interests of the insurance commissioner or consumers,” Gausewitz said, “he’s wrong.”

Rosenfield — an important figure in the consumer rights world who’s been called a protege of Ralph Nader — insisted that someone with Gausewitz’s background should not hold a high-ranking job in the Department of Insurance.

When Rosenfield endorsed Poizner last fall, it was the first time he had backed a Republican for commissioner.

The appointment “calls into question the integrity of the Department of Insurance,” Rosenfield said. “For that reason, it’s inappropriate.”

Poizner chose Jim Richardson as his chief of staff. Richardson was chief of staff to former Republican Senate leader Jim Brulte and more recently was a government consultant.
Contact Mike Zapler at (916) 441-4603 or [email protected]

Consumer Watchdog
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