Gillespie Bedevils, Frustrates Her Critics

It looked like the perfect setting Friday for a political flaying.

Democratic state Sen. Alan Robbins had finally managed to bring Roxani Gillespie, the beleaguered Republican insurance commissioner, before his Senate Insurance, Claims and Corporations Committee to answer questions about delays in implementing Proposition 103.

Robbins had also invited Gillespie’s arch foe, Harvey Rosenfield, author of the insurance reform proposition, to take part in the proceedings. Rosenfield, in turn, brought along his close associate, Conway H. Collis, a member of the State Board of Equalization, an insurance reform activist and a potential candidate for Gillespie’s job when it becomes elective next year.

Robbins noted in a news release announcing the hearing in the State Building auditorium in downtown Los Angeles that Gillespie had canceled an Aug. 28 committee appearance “due to back pain.”

Now, as a bank of television news camera kliegs bathed the participants in glaring white light and reporters scribbled notes, Robbins observed, “I can tell you from experience that going into a hearing with Mr. Rosenfield can be a pain in the, uh, back.”

“It’s not that,” replied Gillespie. “It’s a generic back problem.”

She apparently meant to say genetic . If so, it was perhaps her only slip during the two-hour grilling. For when it was over, the imperturbable insurance commissioner had once again managed to bedevil and frustrate her critics, evading their questions, sometimes responding with non sequiturs and turning their criticisms back upon them.

Of course, she has had practice. Gillespie, a former insurance executive, has been under continuous criticism for alleged foot-dragging in implementing Proposition 103 since it was passed by voters last fall.

Among its provisions, the measure calls for a 20% rollback of insurance rates from the 1987 level and mandates that individual auto insurance rates are to be determined mainly by personal driver records, limiting the weight given to the geographical areas in which drivers live. Currently so-called territorial factors are significant criteria in setting rates, resulting in urban dwellers paying higher rates than drivers who live in other areas.

The issues were complicated in June when the state Supreme Court ruled that insurance companies have the right to a fair return on investment. Gillespie called Allstate Insurance Co. into the first of a series of hearings on the fair return issue Wednesday but there was little progress. And the state Department of Insurance has not yet issued any regulations on how individual driver insurance rates will be set under provisions of the proposition.

“It has been nine months since the voters approved Proposition 103,” Robbins complained to Gillespie, whose job he had himself once considered seeking but now says he does not want.

The Supreme Court stayed the matter until June, replied Gillespie.

“There was no stay to prevent you from thinking,” shot back Robbins.

“Now wait a minute,” the commissioner replied evenly, “if you’re going to start like that, this is not going to be a very nice hearing.”

Both Rosenfield and Collis bore in on the commissioner--citing a lawsuit they had filed against Gillespie on Thursday--demanding that the commissioner set up a hearing to determine the elements of a fair rate of return for insurance companies before dealing with individual firms and to begin setting criteria to move away from the “territorial” system for driver rates.

Gillespie countered by calling her antagonists a “splinter group,” because they were not joined in their lawsuit by the Consumers Union, a major consumer advocate in the case. “Apparently these folks would rather do what the insurance companies do and sue,” she said of Rosenfield and Collis.

She managed to reopen the debate over Proposition 103 as though it had not passed and blamed Rosenfield with authoring a measure that she maintained will cause an increase in rates for 70% of the state’s motorists to make up for decreases in some geographical areas.

“I’m afraid that what he is faced with,” she said of Rosenfield, “is the mistake he authored.”

Sen. John Doolittle (R-Rocklin) a member of the Senate insurance committee and another potential candidate for Gillespie’s job, lending her a bit of support, pointed out concern over a new rate structure among constituents.

But Doolittle added:

“Roxani Gillespie, rightly or wrongly, has been portrayed as the Leona Helmsley of insurance.”

Rosenfield and Collis replied that if the law is followed, good drivers will receive lower rates and bad drivers higher rates regardless of geographical areas.

Rosenfield pointed out in frustration that Gillespie was reviving arguments that the voters had supposedly resolved with the passage of his proposition.

Robbins asked Gillespie at least seven times to explain how the Department of Insurance will deal with where a driver lives in arriving at criteria for setting auto insurance rates under Proposition 103.

Each time she evaded the question, sometimes blaming the Legislature for not dealing with the high cost of insurance: “Because the Legislature has been incapable of doing anything, we (the Department of Insurance) are going to have to do it. . . . What we are trying to do is come up with something that will protect both the people that are paying too (much) and those who are happy with what they are paying. And I don’t think we can do it.”

Disclosure ‘Shortly’

Later she responded: “My policy is going to be to uphold the law and somehow find a way to protect as many people as possible. . . . The regulations will be made public shortly.”

Robbins: “Define ‘shortly.’ ”

Gillespie: “It will be quickly.”

She finally promised that the proposed regulations would be issued this month.

At the conclusion of the hearing, Gillespie hurriedly left the meeting room--reporters trailing after her--as she rushed to catch a plane for a meeting in Gov. George Deukmejian’s Sacramento office.

What about charges, she was asked, that she has exempted 184 insurance companies from any rate regulation?

They are not exempted, she said over her shoulder, their rates can be set any time.

But why not schedule them for hearings?

“They’re teensy-weensy ones,” she replied as she left the building.

And, yes, she is considering running for the job of insurance commissioner in 1990, but now, she insists, Proposition 103 is her main concern.

“I haven’t made up my mind,” she said. “Politics will just have to come second. . . . I’m committed to doing it right.”