Liability in Sacramento

Last Thursday state Insurance Commissioner Bruce Bunner began acting as a state insurance commissioner should. He expressed concern about major insurers’ reluctance to write liability policies for California cities, even after the passage of Proposition 51 in the election two days earlier. He asked the Legislature to give him authority to require the industry to insure municipalities through an assigned-risk plan. Companies might be compelled to participate as a condition of doing business in the state. With Proposition 51 in the law, Bunner said, “there is no excuse for the companies not to come back into the market.”

But this refreshing spurt of action from a member of Gov. George Deukmejian’s Administration was short-lived. The governor’s office declined to endorse Bunner’s sensible proposal, noting that the governor was reviewing a number of recommendations and would make his position known in “the coming weeks.” Then, on Friday, the governor’s office announced Bunner’s resignation.

Maybe Bunner’s resignation was planned for Friday all along. Such coincidences do happen. If so, the governor’s office might have notified Bunner, who was as surprised by the disclosure as anyone. At best, it was a matter of incredibly bad timing and amounted to a thorough nose-thumbing to 2,819,683 Californians who voted for Proposition 51 in the belief that it was going to help alleviate California’s liability-insurance crisis.

Insurance companies poured considerable resources into the Proposition 51 campaign to restrict “deep-pockets” legal judgments to a defendant’s relative fault in damage cases. The threat of such awards had made it difficult or impossible for cities to get liability insurance. The people who voted for Proposition 51 expect results. If such results are not offered by the industry, the Deukmejian Administration should demand them through proposals like Bunner’s.