Panel Sues Insurance Chief for Alleged Failure to Enforce Laws

A panel of lawyers formed to monitor Insurance Commissioner Roxani Gillespie’s enforcement of Proposition 103 and other insurance laws sued her and her department Tuesday on grounds that they are failing to use 30-year-old statutes to discipline insurance companies guilty of bad faith and unfair claims practices.

The suit asks the San Francisco Superior Court to order the commissioner to start enforcing three statutes that allow her to take action on the kind of bad-faith complaints that the state Supreme Court ruled last year could no longer be the subject of lawsuits.

San Francisco attorney Ray Bourhis submitted an affidavit with the suit alleging that he had been told by subordinates of Gillespie that thousands of consumer complaints against such practices have been destroyed by the Insurance Department without substantive action being taken.

Gillespie said in an interview that in the past, when the complaints were permitted to be the subject of lawsuits, the Insurance Department had not enforced the statutes in question. But she said enforcement has begun at her direction in the last seven months.