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BILL WOULD LET VOTERS DECIDE IF REGULATOR SHOULD BE APPOINTED

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SACRAMENTO-After legislation that would have banned industry contributions to California's elected insurance commissioner failed to muster the votes necessary for passage, a state senator has introduced a measure that could restore the post to a governor-appointed position.

The commissioner's office became an elected position in 1989 when voters approved Proposition 103.

Proposition 103, approved by California voters in November 1988, required most property/casualty insurance "charges" in effect from November 1988 to November 1989 to be rolled back to 20% below November 1987 levels.

If approved by a legislative majority and signed by Gov. Pete Wilson, S.B. 225 would put on the June 1998 ballot an initiative that gives the governor power to appoint the commissioner. The bill has been scheduled for its first hearing July 8 before the Assembly Insurance Committee.

Both S.B. 225 and S.B. 1097, the defeated campaign contribution measure, came in response to recent allegations that current Commissioner Chuck Quackenbush is beholden to insurers because they contributed to his 1994 campaign.

"Electing the head of the department of insurance is an invitation to undue influence and even corruption," said Sen. Quentin L. Kopp, an independent from San Francisco, in a press release announcing the measure's June 11 introduction.

In a press release responding to Sen. Kopp's bill, Insurance Commissioner Quackenbush said he agrees that the office should be an appointed position. That had been the recommendation of a constitutional commission that reviewed Proposition 103 last year, he pointed out.

However, the commissioner also said he has not yet reviewed Sen. Kopp's proposal and would have no further comment until he has had an opportunity to do so.

While insurer group Personal Insurance Federation of California praised Sen. Kopp's attempts to "take the politics out of the California insurance commissioner's office," the state's leading consumer group was more critical.

"A gubernatorial appointee is never accountable to people, only to the governor's campaign contributors," said Harvey Rosenfield, executive director of the Proposition 103 Enforcement Project.

In a letter to Sen. Kopp, the consumer group suggested that he also introduce legislation to place yet another initiative on the June 1998 ballot prohibiting insurance industry contributions to insurance commissioner elections.

"If Sen. Kopp wants the electorate to make a choice, he should give the voters a real choice," Mr. Rosenfield said. "The electorate could then choose between an appointed commissioner and an elected commissioner who would not be permitted to accept insurance industry contributions."

Mr. Rosenfield's group also pointed out that the record of the last appointed insurance commissioner, Roxani Gillespie, was less favorable to consumers than that of the two elected commissioners who succeeded her. Ms. Gillespie was insurance commissioner when Proposition 103 passed in 1989.

"Even a pro-industry commissioner like Quackenbush has been forced to institute some pro-consumer reforms because he faces the electorate's scrutiny," Mr. Rosenfield said.

However, Ms. Gillespie, now an attorney with Buchalter, Nemer, Fields & Younger in San Francisco, pointed out that she was unable to enforce the pro-consumer reforms contained in Proposition 103 because the measure was tied up in litigation until 1995.

"So Mr. Quackenbush is the first commissioner to be able to implement Proposition 103," she said.