At this point in the slow and tortuous unfolding of scandal involving Insurance Commissioner Chuck Quackenbush, the public may be fatigued — and understandably so. The charges seem repetitive; the revelations, while serious, are so numerous that they’ve begun to numb.
But something happened Monday to remind us what is at the heart of this scandal: real people, the thousands of victims of the Northridge earthquake. In a bold and controversial action, Sen. Martha Escutia released copies of preliminary Department of Insurance investigative findings that detail allegedly improper, sometimes fraudulent behavior by insurance companies following the Northridge earthquake.
The market studies, as they are called, tell us what the department discovered about how the companies treated the earthquake victims they insured. They include disturbing evidence that the firms performed shoddy inspections of quake-damaged homes, issued purposefully low damage estimates and failed to inform victims about all the benefits for which they qualified — the very benefits for which insurance customers had paid.
Both the insurance companies and Quackenbush have expressed outrage over the release of the market studies, which they maintain are confidential documents. The companies argue further that the market studies only represent preliminary findings and that the companies have not been allowed to respond to allegations of wrongdoing they say they can refute. Certainly, the companies should be given that opportunity.
Still, it’s worth noting that rather than formally refuting the charges when they were made, the companies instead agreed to settlements brokered by Quackenbush. Under those settlements, companies contributed millions of dollars to private foundations controlled by Quackenbush political aides. In doing so, they escaped department action to collect billions of dollars in fines. None of the money that went to the private foundations ever reached earthquake victims. Instead, testimony at the legislative hearings has revealed, much of it went to pay for TV ads and other thinly veiled political activities that benefited Quackenbush.
Given all that, it’s understandable that the insurance companies would want to keep the market studies secret. It’s understandable that Quackenbush would want to keep them secret. But the people who paid for the studies — the citizens of California — have a strong interest in making them public.