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CALIFORNIA ELECTIONS / INSURANCE COMMISSIONER : Torres Softens Stand, Says Garamendi Over-Regulated Industry


It was nothing unusual for Assemblyman Charles W. Quackenbush. The Republican candidate for state insurance commissioner, appearing before a friendly audience of insurance agents, was again assailing the present commissioner for over-regulating the industry.

Quackenbush opposes heavy regulation. Outgoing Commissioner John Garamendi is an ardent regulator.

What was unusual was that Quackenbush's Democratic opponent, state Sen. Art Torres, stood before the same group and joined in the criticism of Garamendi, agreeing that his attitude toward the industry is too negative.

Torres' speech more than a week ago to the American Agents Alliance meeting in Burlingame struck a new note in his campaign. Before an industry audience, Torres suddenly sounded far friendlier than he has when addressing consumer gatherings.

The agents' group provided tape recordings of the speeches of both Quackenbush and Torres. Although Torres did say on the tape that serving consumers would be his "first priority," he quickly veered to statements suggesting that Garamendi had been too onerous a regulator and asserted that "the consumer is not served well if the industry is not healthy in California."

Also, in an apparent adverse comparison of Garamendi with his predecessor, industry-leaning Republican Roxani Gillespie, Torres told the agents:

"I just read that now we are 49th or 50th in the nation in terms of how we are perceived (by insurers) in respect to regulation, in respect to price, in respect to competition. We cannot afford to continue with that kind of attitude, and we need to look for other . . . opportunities to make California what it should be and where we were just four years ago, almost at No. 1 in terms of a competitive and open place for the industry."

Later, during audience questioning, Torres pledged to undertake a performance audit of the Insurance Department, in part to find out what had become of $23 million in fines levied by Garamendi against the industry.

If irregularities were found, Torres said, "I'd have to determine whether to turn it over to the appropriate prosecuting authority."

The Democratic candidate also told the agents, "I'm educated (about insurance) almost daily by my brother-in-law and my cousin, who are both agents in the property-casualty field."At another point he added, "If it were up to me, this office should be nonpartisan."

Garamendi, provided a transcript of Torres' remarks, said that the $23 million in fines went to the state's general fund, and he expressed pride at being a tough regulator.

"If he is referring to the way the insurance industry views my regulation . . . it's never been my goal to serve the insurance industry and make them happy, but to serve the consumer," Garamendi said.

"I have taken a department that was the lap dog and the lackey of the industry and turned it into a growling watchdog for the consumer. I know that the industry does not like me, but I never signed on to be their lover. Rather, I am their policeman."

At the same time, Garamendi said he was pleased that Torres had said consumers would be his "first priority."

"He will undoubtedly be a different commissioner than I am, but he will handle the task well," he added.

In another remark to the agents, Torres promised if elected to form a partnership with the industry, but also said, "That partnership has to be in the best interest of the consumer."

In an interview later, Torres said he felt that in his speech to the agents his remarks were more critical of the Department of Insurance bureaucracy than of Garamendi.

Torres noted that he refers to the agency's employees as "burrocrats," to describe their stubbornness. "We've got a problem with civil servants that nobody can control," he said.

But the Democratic candidate also said that Garamendi's regulatory policies may be driving insurers out of California.

"If there's no insurance out there, that's not in the best interest of the consumer," he said. "Making it affordable and accessible as commissioner will be my responsibility."

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