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Insurance

August 28, 1987

I would like to correct and put into perspective a claim the state Department of Insurance made about our recent report on its activities ("State Insurance Department Rebuts 'Flawed' Criticism," Part I, Aug. 19).

The department quoted Consumers Union out of context; it claimed we asserted that insurance agents and companies are never punished for violating the law. In fact, we only said that unfair and deceptive practices too often go unpunished. The quotation the department claimed was ours had referred only to the department's practice of "jawboning," not to all the department's activities. (Jawboning is the practice of quietly warning insurance companies about illegal activities without penalty and without public disclosure).

In defending itself, the department noted that it "revoked 132 licenses, restricted 44 licenses, suspended six licenses and issued miscellaneous orders including monetary penalties on 28 licenses." According to data in the department's annual reports, the last time the department took so few disciplinary actions against insurance agents was 15 years ago, in 1972.

JUDITH BELL

Director of Special Projects

Consumers Union

San Francisco

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