Posted on 09/29/2006 9:59:05 AM PDT by SmithL
The next state insurance commissioner will be facing industry pressure to back away from some controversial regulations, including new rules that require insurers to base automobile rates primarily on driving records instead of zip codes.
Consumer advocates support the new regulations. And both groups are closely watching the contest between Lt. Gov. Cruz Bustamante, a veteran Democratic politician who says the job of insurance commissioner may be his last elective office, and Silicon Valley businessman Steve Poizner, a wealthy Republican who is hoping to make it his first.
Both candidates promise to uphold the regulations, although insurers contend they are costly and unfair. The rules were introduced by incumbent John Garamendi, who has aggressively clashed with the industry and is now running for another position.
The election is "something that everyone in California should care about," said consumer advocate Harvey Rosenfield, who authored a landmark insurance reform initiative in 1988. Everyone is affected by insurance costs, he added -- whether they own a home, drive a car or buy from a business that factors its own insurance rates into its prices.
The campaign has been relatively low-key, so far. But that may change.
Poizner, a Los Gatos entrepreneur who made a fortune selling his tech start-up, says he will spend "whatever it takes" on a TV campaign aimed at raising his name recognition against his better-known opponent.
The two candidates, in separate interviews, voiced similar positions on some key issues, both promising to look out for consumers' interests while protecting the industry's financial viability. Still, they don't agree on everything, and they have distinctly different political backgrounds.
Bustamante is a veteran Democratic politician from the Central Valley, who was a legislative aide and then served six years in the Assembly before winning the largely ceremonial post of lieutenant governor in 1998.
He has reached the term limit for that job and, having lost a previous bid for governor, said the insurance commissioner's office may be the culmination of his career. With only token opposition in the Democratic primary, Bustamante spent the first months of his campaign talking mostly about fitness, nutrition and his own effort to lose weight.
At 5-foot-7, he has dropped from 278 pounds to 215.
Poizner is a moderate Republican who has been trying to break into public service for several years. He lost a bid for a Peninsula Assembly seat in 2004, then won an appointment from Gov. Arnold Schwarzenegger to the state Public Utilities Commission.
But Poizner withdrew from that appointment after learning his extensive investments would preclude him from voting on telecommunications issues. He also led the unsuccessful campaign for Schwarzenegger's redistricting initiative last year.
The commissioner sets rules and oversees rates for auto and property insurance, investigates complaints and monitors insurers' financial health. The office has only limited jurisdiction over health insurance and workers' compensation, but the commissioner can conduct studies and support legislation in those areas.
Insurance companies feel they are heavily regulated in this state, said Sam Sorich, president of the Association of California Insurance Companies, and they are hoping Garamendi's successor will take a "fresh look" at some of his positions.
That includes the rules that require insurers to reduce emphasis on drivers' ZIP codes. Insurers say geography is a legitimate factor because more accidents occur in congested urban areas, for example. But both candidates agreed with critics who say that's unfair to many good drivers.
Both candidates also endorsed the incumbent's effort to bar insurers from raising homeowners' premiums after they file legitimate claims, although Sorich argues that past claims can be an indication of future costs.
The candidates differ on recent legislative reforms to the workers compensation system.
Although many employers and insurers believe the changes succeeded in lowering premiums while providing fair coverage, some labor groups complain that workers aren't getting adequate compensation for injuries.
With insurance companies reporting significant profits, Bustamante said he would propose legislation requiring insurers to increase benefits without raising premiums. Poizner said it's too soon to make such changes, although he would support "fine-tuning" to make sure workers get health care promptly.
Bustamante has accused Poizner of being a "pro-business Republican," while Poizner has stressed his practical experience as an entrepreneur, who built a successful tech company and then sold it for a reported $1 billion.
Poizner spent more than $6 million of his own money on his unsuccessful Assembly bid and has already put more than $4 million into the current campaign. He has refused contributions from insurance interests and criticized Bustamante for accepting them.
Bustamante, whose earlier campaign for governor was fined $263,000 for using donations from Indian casino interests that violated contribution limits, said the insurance money wouldn't influence him. But after public criticism, he returned more than $120,000 in insurance contributions and said he won't accept any more.
The lieutenant governor complained that Poizner ran a ballot campaign last year with support from a business committee that accepted money from insurance interests. Poizner retorted that Bustamante was "grasping at straws."
Also on the ballot are Jay Earl Burden of the American Independent party, Larry Cafiero of the Green party, Dale Ogden of the Libertarian party and Tom Condit of the Peace and Freedom party.
Source: MediaNews research
AGE: 53
PARTY: Democratic
OCCUPATION: Lieutenant Governor
EXPERIENCE: Studied political science; served as congressional and legislative aide; elected to state Assembly from Central Valley in 1993; became Speaker in 1996; elected lieutenant governor in 1999 -- the first Latino elected to statewide office since 1878.
CAMPAIGN FOCUS: Stresses his government experience; promises to protect consumers and crack down on fraud; used his own effort to lose weight during the spring primary as a public platform for touting nutrition and physical fitness.
AGE: 49
PARTY: Republican
OCCUPATION: Businessman
EXPERIENCE: Earned degrees in electrical engineering and business; founded and then sold a successful Silicon Valley tech company; volunteered as a government teacher in a San Jose high school; ran unsuccessfully for state Assembly in 2004.
CAMPAIGN FOCUS: Says he will crack down on insurance fraud and encourage disaster preparedness; promises to protect consumers and keep a close watch on insurance companies, while making the department more efficient and consistent in dealings with the industry.
GO POIZNER GO
As an insurance agent, Bustamecha would be a horror.
Bustamente for Insurance and Attorney General Lockyer for Treasurer.
Term limits = Musical Chairs for CA Dems.
But maybe they really, really wanted to serve the public in these particular elected positions all their lives and this is their first opportunity.
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