CALIFORNIA ELECTIONS / INSURANCE COMMISSIONER : Candidates Increasingly Back Reform

Even the two Republican candidates present backed government health insurance and an end to neighborhood-based pricing of auto policies at a debate among eight candidates for insurance commissioner before a forum of the African American Voter REP Project in Los Angeles.

The 90-minute discussion on Wednesday night demonstrated the increasing agreement on major reform of the insurance industry that marks the commissioner’s race as the candidates crisscross the state responding to different kinds of audiences.

Only Libertarian Ted Brown was completely resistant to an increased government role in setting rules for the insurance system. The other candidates attending said they were prepared to see the government step into some areas and either set the rules or operate the system itself.

Two of the candidates, Democrats Walter Zelman and Bill Press, have made advocacy of government health insurance for all a keynote of their campaigns. But what was striking Wednesday night was endorsement of the idea by one Republican candidate, John L. (Jack) Harden, and modified endorsement by another, Tom Skornia.

Harden said, “We need to have a health insurance plan similar to Canada’s,” which has universal health insurance. And Skornia said that while he would prefer to have an employer-supported system, he feels there ought to be “a government safety net” to insure all those not covered by employers.

Neighborhood-based pricing, known as the territorial rating system, is particularly unpopular in the black community--where the poor are charged among the state’s highest auto insurance rates when they can find a company willing to sell to them at all. At the debate, the system was roundly condemned.

Press called territorial ratings “discriminatory, racist, illegal and wrong.” Another Democratic candidate, Larry Murphy, a 37-year veteran in the insurance business, told of the refusal of companies he had worked for to sell in black neighborhoods.

Skornia said, “Read my lips--no more redlining” and went on to call a recent decision by Los Angeles Superior Court Judge Miriam Vogel upholding neighborhood-based pricing “just plain wrong.”

When the Libertarian, Brown, said the government should have no role in dealing with such problems, Skornia responded, “There is more waste, corruption and fraud in the insurance industry than in the government. As commissioner, I will deal with it.”

In other developments in the commissioner’s race, meanwhile:

Zelman, who Thursday won the endorsement of the Long Beach Press-Telegram, told consumer advocate Ralph Nader he had decided not to respond to his questionnaire on insurance issues, in part because he considered it a setup for Nader to support Conway Collis, another Democratic candidate. And Press and Skornia, saying they found deficiencies in Nader’s 71 questions, sent along their own additional questions and comments.

State Sen. John Garamendi, who skipped Wednesday’s Los Angeles debate, said that as commissioner he would put a cap on insurer investments in junk bonds. He expressed concern that otherwise many companies may collapse, defaulting on their claims obligations.

Press announced that he has purchased a position in a Democratic slate to be mailed out by political consultant Clint Reilly. And Proposition 103 author Harvey Rosenfield, a supporter of Collis, blasted the Berman-D’Agostino campaign firm for selling positions on its slates to Garamendi, who he charged would, as commissioner, not pursue Proposition 103 rollbacks.