Quackenbush Refuses to Release Key Insurancegate Documents

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A request, made by the nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR), for copies of California Department of Insurance (DOI) documents related to the Northridge earthquake was denied by Commissioner Quackenbush late Friday. In a formal public records act request submitted to DOI on March 27, 2000, FTCR asked for copies of DOI market conduct reports and associated correspondences as well as a list of all such reports from examinations of insurance companies since 1995. According to the Los Angeles Times, recent examinations of State Farm, Allstate and 20th Century expose massive wrongdoing by the companies in their handling of Northridge related claims.

Stating that some of the documents are privileged and that others don’t exist, DOI denied access to each of the seven items contained in the FTCR request. According to the denial letter, DOI acknowledges the existence of the examination reports but claims that they are “privileged and confidential” despite the fact that, pursuant to Insurance Code § 735.5, the reports can be made public by the Commissioner.

“Commissioner Quackenbush has locked down the hatches and sealed off every access point to the public affairs of his department,” said Doug Heller, consumer advocate for FTCR. “Reports indicate that Commissioner Quackenbush‘s own staff found massive wrongdoing on the part of State Farm and other insurers, but he ignored his staff recommendations for major fines and victim restitution. Not only has he let the insurance companies off the hook, he is now hiding the evidence against them.”

DOI refused to supply even a list of exams conducted and a list of correspondences between DOI and the companies regarding the market conduct exams.

On April 2, 2000 the Los Angeles Times reported that exams of State Farm, Allstate and 20th Century, conducted by DOI, found that the companies violated claims handling laws with 50%, 24% and 75%, respectively, of their policyholders after the Northridge quake. Despite over $3 billion in fines and over $200 million in repayments to cheated earthquake victims recommended by DOI staff, Quackenbush asked the companies, instead, to pay a total of $10.5 million into private foundations created by Commissioner Quackenbush. Most of the expenditures of these foundations have been for advertisements featuring Chuck Quackenbush and to public relations firms.

Commissioner Quackenbush will appear before the Assembly Insurance Committee Thursday as part of an investigation into his affairs by the State Legislature. The same documents, that were denied to FTCR, have been requested by the Committee. It is unclear if Quackenbush will make the documents public at that time.

“By withholding these documents, Mr. Quackenbush protects the companies at the expense of earthquake victims who have been cheated by misdealing insurers and all policyholders who run into industry stonewalling and low-balling. This is more disturbing evidence that the Commissioner’s allegiance is to insurance companies rather than the public interest,” concluded Heller.


Consumer Watchdog
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