SACRAMENTO — The candidates for California insurance commissioner in the June 7 primary call the job a challenge.

It's more like a politician's nightmare.

Outgoing Commissioner John Garamendi is bequeathing his replacement 20 major lawsuits, 600 open fraud investigations and 70 requests by insurance companies for rate increases.

Even as Garamendi runs for the Democratic nomination for governor, the Insurance Department is defending itself in the state Supreme Court, where the industry has mounted a major challenge to the commissioner's basic authority to limit its profits.

In another case, the California Supreme Court will decide whether the Legislature can weaken Proposition 103, the 1988 initiative that made insurance commissioner an elective office and created the current regulatory system.

Then there are the policy issues awaiting the next commissioner: How to overhaul the health insurance system, limit auto insurance costs, provide coverage for the millions of Californians who have no insurance, and see to it that insurance companies offer coverage against the disasters that routinely strike California.

All the while, the commissioner is responsible for analyzing the financial health of insurers, and must seize them if they become insolvent. Garamendi, the state's first elected commissioner, took over several companies, including the massive Executive Life, and litigation over them continues.

Other than the governor, the insurance commissioner is the one statewide officeholder who most directly affects the wallet of every consumer in the state.

Californians spend $60 billion a year to insure their cars, homes, health, life and businesses. It is the insurance commissioner who decides whether rates will rise and whether consumer complaints are heard.

Despite the headaches that await the next commissioner, an intense fight is under way in both major parties for the right to take on the $95,052-a-year job.

The three main Republican candidates in the primary are Jim Conran, Gov. Pete Wilson's former Department of Consumer Affairs director; Assemblyman Chuck Quackenbush of Cupertino, and Wes Bannister, an Orange County insurance broker who was the party's nominee in 1990 against Garamendi.

The two main Democrats are state Sen. Art Torres, who has represented the Eastside of Los Angeles in the Legislature for 20 years, and Assemblyman Burt Margolin, who has represented the Westside for 10 years.