Ban on Insurance Money in Race for Commissioner Urged

A ban on campaign contributions from the insurance industry and restrictions on those from trial lawyer sources was proposed Wednesday as part of an ethics code to govern next year’s race for insurance commissioner.

The proposal came from Democrat Walter Zelman, who has taken a leave of absence as executive director of California Common Cause to explore running for commissioner on a platform of independence from special interests in the insurance and legal communities that often dominate the insurance issue.

But Zelman’s restriction against help from such interests in the campaign for commissioner contained a major loophole.

Although his proposal would ban contributions from trial lawyer organizations and law firms primarily engaged in auto-related personal injury litigation, it would still permit contributions from individual lawyers, including personal injury attorneys who profit in a major way from auto insurance cases. Zelman did say he would try to avoid accepting huge gifts from such sources.

Most of those planning to enter the race, including the present appointed commissioner, Roxani Gillespie, are forswearing insurance industry support, perhaps in recognition that it likely would be the kiss of death with the electorate.

But there is no such consensus about taking money from the trial lawyers.

For instance, another prospective Democratic candidate, television commentator Bill Press, said Wednesday he will definitely be taking trial lawyer contributions.

“My view is that this campaign is ‘us’ versus ‘them,’ ” Press said. “ ‘Them’ are the insurance companies and ‘us’ is everybody else. I’m running to fight for California consumers and I’ll accept help and money from everybody but ‘them,’ the insurance companies.”

Zelman, however, said he believes the trial lawyers constitute a major special interest involving insurance and that any new commissioner should avoid extensive help from them in the campaign to avoid a conflict of interest.

He added that the Los Angeles branch of the California Trial Lawyers Assn. has invited all the candidates for commissioner to address a meeting it is holding in Las Vegas this coming weekend, and that he plans to urge the lawyers to avoid trying to make contributions in the race.

A third prominent prospective Democratic candidate, state Board of Equalization member Conway Collis, said he thought Zelman’s ethics proposal was “excellent” and he would like to discuss it further with him. But, he added, “I don’t know how to separate a trial lawyer from another lawyer. My wife’s a lawyer.” (Collis himself is an attorney but he is not licensed to practice in California.)

Yet another Democratic candidate, San Francisco trial attorney Ray Bourhis, said he feared that if trial lawyer contributions were banned, there would be no way to respond to independent insurance industry campaigns on behalf of any particular candidate.

Meanwhile, in another insurance development, industry sources said that Gillespie, as had been predicted, has reached agreement with industry and consumer representatives on a deal that would involve her canceling her order of last week telling the companies to stop setting auto insurance premiums based on where a driver lives.

The matter of new rules for pricing auto insurance would be left to be resolved in Insurance Department hearings that are scheduled to begin Oct. 30 and last perhaps a month.

The sources said the agreement--under which the insurance companies agreed to cooperate to expedite the process--is being put in writing and may be made public as early as today.