Lesson From Election: Insurance Money is Poison

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California Voters Reject Industry’s Attempt to Corrupt Insurance Commissioner

Voters rejected the only candidate for California Insurance Commissioner to have accepted contributions from insurance industry sources, on Tuesday March 5, 2002. Tom Calderon, who received more than $1.5 million from insurance sources, had a surprisingly poor showing in the election, placing behind two other Democratic candidates, each of whom had less total contributions than Calderon.

“Insurance industry money is poison for politicians who want to be the insurance commissioner,” said Doug Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). “Voters know that every insurance industry dollar creates a potential conflict of interest.”

FTCR, which has long-advocated a mandatory ban on insurance industry contributions, has urged lawmakers to formalize through legislation the public sentiment against industry money to commissioner candidates. Prior to enactment of such a law, FTCR hopes all candidates running for commissioner in the general election will voluntarily refuse contributions from insurance industry sources. According to the most recent campaign filings, none of the remaining candidates for commissioner have received any financial support from the insurance industry.

In 1988, voter approved Proposition 103 made the California Insurance Commissioner an elected post in order to hold the Commissioner accountable to the public. Prior to Prop 103, commissioners were appointed by the governor and often had conflicts of interest because they had previously worked for the insurance industry. Requiring insurance commissioners to win voter approval was intended to ensure that the insurance commissioner would properly implement and enforce the extensive insurance reforms enacted by Proposition 103.

Since the passage of the initiative, consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR) have worked to maintain the integrity of the office and to inform the public of the conduct of the elected insurance commissioners. FTCR has closely scrutinized and publicized the insurance industry’s efforts to regain control of the commissioner, and candidates for the post, through massive campaign contributions. The industry’s successful campaign to elect Chuck Quackenbush in 1994 — strongly criticized by FTCR — led to a series of controversies as Quackenbush proceeded to ignore or undermine most of 103’s requirements. Quackenbush was forced to resign in 2000, after a scandal in which Quackenbush dismissed billions of dollars in proposed fines against insurance companies for claims mishandling in exchange for insurer donations to a Quackenbush slush fund.

To address the clear problems created by industry contributions to the insurance commissioner, FTCR has sponsored legislation to ban such donations. However, industry lobbyists defeated the legislation in 1997 and 2000. FTCR not only advocates a ban on insurance industry contributions to the insurance commissioner, the non-profit, non-partisan organization urges policyholders to hold accountable insurers that donate policyholder money to commissioners and candidates.


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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