Insurance Lobby Gives Lawmakers $1.6 Million

California’s property and casualty insurance industry gave $1,621,326 in campaign contributions to Gov. George Deukmejian and California incumbent legislators during a two-year period ending in July, according to a Common Cause study released Monday.

Contributions, the study said, included: $183,340 to Deukmejian; $70,582 and $52,100, respectively, to the chairmen of the Senate and Assembly insurance committees; an average of $20,614 for each of the 22 members of those two committees, and an average of $10,045 apiece to other members of the Legislature. Only four of the 120 legislators did not receive anything.

In releasing the report, Common Cause Executive Director Walter Zelman said:

“It is impossible to understand the state Legislature’s complete inability to enact meaningful insurance reforms this year unless one factors this $1.6 million into the legislative equation.”

Zelman said that while many legislative leaders promised to support insurance changes in 1986, “not one significant pro-consumer bill was passed over the opposition of the insurance industry.” Two pieces of legislation that did pass--restricting midterm policy cancellations and mandating more specific disclosures of companies’ losses and profits--were watered down by amendments before being passed with industry support.

Bills Rejected

Among the bills rejected, Zelman noted, were those that would have taken away insurance company antitrust exemptions, established a rate review board, prohibited premium increases of more than 50% without prior approval of the insurance commissioner, mandated reductions in auto insurance for good drivers and sought liability rate decreases following the passage by the voters of Proposition 51, the “deep pockets” initiative.

The Common Cause study showed that Assemblyman Richard Robinson (D-Garden Grove), the legislator who introduced an anti-rebate bill preventing insurance brokers from discounting their commissions and thus offering insurance at cut-rate prices, received $79,000 in insurance contributions, more than any other legislator. The proposal passed and was allowed to become law by Deukmejian without his signature.

Other major legislative recipients of industry contributions were Sen. Alan Robbins (D-Van Nuys), chairman of the Senate Insurance Committee, $70,582; Sen. H. L. Richardson (R-Glendora), $64,300; Assemblyman Alister McAlister (D-Fremont), chairman of the Assembly Insurance Committee, $52,100; Assembly Speaker Willie Brown (D-San Francisco), $48,300; Assemblyman Louis Papan (D-Millbrae), $44,900; Sen. Jim Nielsen (R-Rohnert Park), $36,000; Assembly minority leader Patrick Nolan (R-Glendale), $33,500; and Sen. John Doolittle (R-Citrus Heights), $32,898.

“Anyone who still argues that this kind of money has no impact on the California Legislature is living in a political fantasy land,” Zelman said.

The four legislators who received no industry contributions at all were Assemblymen Tom Bates (D-Oakland), Dominic Cortese (D-San Jose) and Tom Hayden (D-Santa Monica), and Sen. Diane Watson (D-Los Angeles).

Zelman said that the single largest insurance industry contributor was the Political Action Committee of the Assn. of California Insurance Companies, which gave $630,100 to state legislators, but none to Deukmejian.

Other major contributors among industry groups were the Insurance Men’s Political Action Committee, $210,300; the Surety Co. of the Pacific, $150,220, and CA General Management Inc., $104,500.

Deukmejian’s largest gifts were $60,000 from Mercury Casualty Co.; $43,820 from the Surety Co. of the Pacific, and $16,000 from Twentieth Century Industries Co. The study dealt with incumbents and predated the gubernatorial general election campaign, so there was no report on contributions to Los Angeles Mayor Tom Bradley, Deukmejian’s Democratic challenger.

Zelman said he found it particularly significant that the 22 legislators who serve on the two legislative committees with responsibility for insurance legislation had received a total of $453,503 in contributions from industry sources. The five members of the Senate who serve on the Senate committee received a total of $165,005.

“Any lobbyist knows that the best strategy for blocking legislation is to seek maximum influence in key committees, or even one key committee,” Zelman said. “The evidence suggests that the property and casualty industry understands that strategy and employs it aggressively.”

He added that if life insurance industry contributors had been included in the study, the total insurance industry contributions would have increased by at least $250,000.