Insurance chief says consumers pick up the tab for crimes.

Sacramento Bee

Steve Poizner figures insurance scams cost each California consumer an extra $500 a year for coverage.

Vowing to come down on insurance cheats “like a ton of bricks,” the insurance commissioner has put fraud high on his agenda during his first 100 days and launched a crackdown across the state.

“Insurance fraud is so rampant in California that it causes insurance to be more expensive than it needs to be,” Poizner said Tuesday during a noontime speech to the Sacramento Press Club. “We’re going to attack fraud aggressively and drive down costs.”

Since January, the Department of Insurance has publicized a series of arrests and court sentencings across the state in operations the department says cost consumers and insurers more than $6.5 million.

Those cases include:

– The arrest Tuesday of two Pelican Bay State Prison correctional officers who operated their own insurance agency. The two are accused of stealing insurance premium payments and issuing bogus documents to customers, which included co-workers.

– The breakup of an alleged auto fraud ring in Santa Clara County in which two men are accused of staging accidents and filing insurance claims for medical treatment outside the country.

– Five arrests in Orange County in what authorities say are separate insurance fraud cases.

– The arrest of a Bakersfield businesswoman suspected of workers’ compensation insurance fraud.

– The sentencing of three Ventura County senior citizens in a financial products scheme. A judge ordered more than $1 million in restitution.

“Fraud has been ignored for so long. We’re going to find some high profile fraud cases and go after them,” Poizner said. “We want people to know we’re watching them.”

For weeks, the 50-year-old Republican has crisscrossed the state, meeting with consumer, industry and business groups and outlining his plans as the state’s top regulator of a massive $115 billion a year industry.

In addition to the fraud campaign, Poizner has spelled out initiatives aimed at lowering the cost of earthquake coverage, analyzing the cost of health-care overhaul packages proposed by Democratic lawmakers and Gov. Arnold Schwarzenegger, and improving the state’s readiness for natural disasters.

Poizner also is pushing legislation to transform his office into a nonpartisan elected post such as the state superintendent of public instruction and a measure to ban insurance industry contributions to candidates for insurance commissioner.

“The regulator of insurance needs to be fiercely independent of the insurance industry,” said Poizner, who made a fortune with the sale of his Silicon Valley company, SnapTrak Inc., and spent $14 million of his own money on his campaign.

He faces heavy scrutiny by consumer and insurance groups. The political newcomer has yet to unveil many details to his broad agenda.

“He gathers information and is painstaking in his deliberative decision-making process. It’s a different approach than a lot of elected officials,” said consumer activist Harvey Rosenfield, founder of the Foundation for Taxpayer and Consumers Rights and author of the landmark auto insurance measure, Proposition 103.

“He’s kept his campaign pledge not to undermine the rules and regulations that have been previously put in place,” Rosenfield said about moves by former Insurance Commissioner John Garamendi to revamp the way auto insurance rates are set.

Nicole Mahrt, spokeswoman for the American Insurance Association, said it’s too early to judge Poizner’s stand on insurance rate issues.

“He has a very diverse Cabinet. He is definitely making an effort to meet with everybody,” Mahrt said. “He’s making good on his promise to fight fraud and start preparing Californians better for catastrophes.”