Insurance chief hires top legal enforcer – and gets some static

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Sacramento Bee (California)

State Insurance Commissioner Steve Poizner on Wednesday announced the hiring of a San Francisco attorney as his new general counsel.

Adam M. Cole, a partner with Heller Ehrman LLP, a leading insurance recovery firm that also represents industry giant State Farm, will take over Monday as the top legal enforcer for the Department of Insurance, overseeing 80 government attorneys.

He replaces Gary Cohen, who left in July to become chief lawyer for Fireman’s Fund Insurance Co.

Poizner said Cole’s nearly 20-year career has focused “on suing insurance companies to force insurance companies to do the right thing for consumers. He’s also been passionate in civil rights issues.”

Cole’s selection, however, was questioned by one consumer group. It also follows a call by the Foundation for Taxpayer and Consumer Rights for Poizner to fire his special counsel William Gausewitz, a former industry lobbyist accused of trying to help insurance avoid paying thousands of dollars in court fees during a legal fight over insurance rates.

“The commissioner promised that his department would be fiercely independent of the industry. This general counsel is going to have to demonstrate he has no allegiance to the firm that he worked for,” said Harvey Rosenfield, founder of the Santa Monica-based Foundation for Taxpayer and Consumer Rights and author of Proposition 103, the landmark insurance initiative approved by voters in 1988.

Poizner defended the selection and said the insurance industry isn’t “going to be happy with me hiring somebody with a long track record of suing insurance companies.”

For two decades, State Farm and other insurers have waged legal battles over Proposition 103, the landmark 1988 initiative that requires insurers to set premiums mostly on driver safety records, experience and miles driven instead of where motorists live.

Cole said Wednesday he was not part of Heller Ehrman’s State Farm legal team. The insurer, he said, accounts for just a fraction of the 600-attorney firm’s revenues. Heller Ehrman specializes in representing companies and other policyholders trying to recover payments from insurance companies. In the past five years, it has recovered more than $5 billion from insurers.

“I haven’t personally ever represented an insurance company. I have not done any work for State Farm,” Cole said. The law firm “has a very strong roadblock between what we do in the insurance recovery side of our firm and what the State Farm people do.”

Cole, 46, whose father is a professor emeritus of law at the University of California, Berkeley, is a graduate of Yale University and Harvard Law School. He is a former U.S. Peace Corps volunteer in Swaziland.

In the Bay Area, Cole has taught insurance law at UC Berkeley‘s Boalt Hall and UC’s Hastings College of Law in San Francisco.

With a government salary around $160,000, Cole will be taking a substantial pay cut. “I’ve managed to save a lot of money. The concept of doing something in public service is something I have been thinking about for a long time.”

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