Greater Power on Insurance Requested by Commissioner

Presiding over the first meeting of his new consumer advisory panel, state Insurance Commissioner Bruce Bunner said Wednesday that he needs more authority to compel insurance companies in California to offer liability and other types of insurance when they are unwilling to do so.

Bunner suggested that one way to deal with the present crisis in liability insurance, in which premiums have skyrocketed and some businesses and individuals have been unable to buy coverage at any price, would be to set up an assigned risk-type plan for commercial liability insurance. He said that would allow the compulsory distribution of the poorer risks among all companies providing insurance.

The commissioner strongly indicated that he would go to the Legislature to seek the authority to create such a system, which already exists in the auto insurance field, if the advisory panel formally urges him to do so. The 11-member group scheduled its next meeting in two weeks and said the sole subject will be insurance availability.

The panel, which has been under the fire of consumer advocates because it includes a majority of either government officials or insurance brokers, nonetheless assumed an aggressive stance Wednesday in its opening session.

Unanimous Vote

Its meeting was only a few minutes old when it voted unanimously to open the session to the public. Bunner and his aides had earlier directed that it be held behind closed doors.

Two leading consumer advocates who had been critical of the group’s makeup, Walter Zelman, the director of California Common Cause, and Steven Miller, director of the Insurance Consumer Action Network, showed up, however, and demanded that they be admitted. The panel speedily agreed, and Bunner and his aides did not object. The press quickly followed Zelman and Miller into the meeting room.

The result was a rare spectacle: An internal state departmental meeting with an unrehearsed discussion held in full view of numerous reporters and television cameras.

Tired of Searching

It quickly became apparent that most of the new consumer advisers, including the insurance brokers among them, were unhappy with the way the insurance system is operating, particularly with its high prices and often difficult availability.

An insurance agent from Beverly Hills, Leroy Mobley, for example, said he is tired of searching diligently for insurance at a fair price, “telling my clients, ‘This is the best we can do,’ and, in turn, being called a crook.”

Another member, independent trucker Mary Saied of Van Nuys, said it is clear to her that there must be much more stringent regulation of insurance in the state, with the insurance commissioner being given authority to act to compel the companies to be more reasonable.

The state Insurance Department has long had a reputation for catering to the insurance industry’s needs, and Bunner; his chief deputy, Roxani Gillespie, and his chief of consumer affairs, Everett Brookhart, listened to the panel members with a trace of nervousness, although they took exception to nothing that was said.

Bunner’s statements about seeking more authority came first in the meeting and later in a news briefing.

Legislative action to compel the private companies to provide insurance has engendered major controversy in other states recently.

For instance, West Virginia is currently engaged in a full-fledged fight with the industry over laws its Legislature recently approved that will sharply restrict the companies’ freedom to cancel or refuse to renew medical malpractice policies beginning in June.

Threat Made

The companies have threatened to pull out of that state altogether, and in return, West Virginia’s Republican governor, Arch A. Moore Jr., has announced that he will ask the Legislature to replace them with a state-owned insurance system.

Nonetheless, Bunner said Wednesday that he would like to be given additional authority here “to allow us to step in in cases of market dislocation” and compel offerings of insurance.

“It would require legislation,” he noted.

Originally, Bunner had indicated that the new consumer advisory panel would meet only about four times a year in private. At the end of Wednesday’s meeting, he said it will meet at least once a month, and the panel agreed that most of its future meetings will be public.