State Insurance Department Seeks Hike in Its 1988-89 Budget to $33 Million

The state Insurance Department is proposing a $33-million fiscal 1988-89 budget that calls for adding 37 staff members, including 22 more in its Consumer Affairs Division, Commissioner Roxani Gillespie said.

Gillespie said Thursday that in order to pay for the larger budget--$3.3 million more than the current fiscal year--the department, with the backing of Gov. George Deukmejian, is proposing that its fees to licensed agents, brokers and insurers be increased by 17% on July 1.

“We still need to strengthen ourselves,” Gillespie said. “The situation in our consumer services was so bad when we came in to office that we’re still playing catch-up.”

She said most of the new personnel will be devoted to responding to public complaints.

‘A Strong Presence’

“We are improving our process to review complaints and be a strong presence out there,” she added.

The commissioner said that while consumer services and other departmental functions have been beefed up since Deukmejian came to power five years ago, the $3.3-million increase in a single year would be the largest annual budgetary increase the department has ever had.

She said the Consumer Affairs Division, established in 1985, recovered more than $34 million for consumers in its first two years and handled 206,000 telephone calls and opened 21,500 formal complaint files in 1987.

In 1983, total staffing within the department was 407. Under the budget proposal it would rise to 515.

Unlike most other state departments, the Insurance Department receives no taxpayer funding but exists solely by generating its own revenues through licensing fees, examination fees, legal services or other assessments to licensees and the insurance industry.

The proposed budget is subject to approval by legislators, some of whom have accused the department in the past of siding too often with the insurance industry.