CALIFORNIA ELECTIONS / STATE INSURANCE COMMISSIONER : Garamendi, Bannister Question Other’s Independence

In the first and perhaps only televised debate of the insurance commissioner’s race, Democrat John Garamendi promised to see that “every single Californian” has health insurance by the end of his first four-year term in office, and Republican Wes Bannister vowed to work for auto insurance premium decreases of 35%, if elected.

The hourlong debate, taped Friday night, can be seen at noon today on KCBS-TV, Channel 2, in the Los Angeles area, and in other localities around the state at times to be announced.

During the encounter, sponsored by the California League of Women Voters, Bannister and Garamendi accused each other of being aligned with special interests that derive income from the auto insurance business.

Bannister charged that “Mr. Garamendi’s major contributors right now are the trial lawyers, and if he is elected, I assure you that he will stay in the hands of the trial lawyers.” Garamendi denied any such association.

When Bannister, owner of a Huntington Beach insurance agency, called himself a “consumer advocate” and remarked, “I take care of my clients,” the Democrat shot back: “Take care of your clients? Your pay comes from the insurance companies.” He called Bannister an apologist for the industry.

Garamendi questioned remarks by Bannister that the insurance companies are justified in using the courts to fight the voter-approved insurance initiative, Proposition 103, and perhaps ought to be allowed a higher profit than the 11.2% annual return outgoing Insurance Commissioner Roxani Gillespie has promised them.

“They’re going to have a tough time getting more out of me,” Garamendi said.

Bannister repeatedly endorsed no-fault insurance as a means of cutting the lawyers out of the insurance income pie and providing the 35% premiums cuts he wants. Under no-fault, accident victims are automatically compensated by their own insurers and liability suits are strictly limited. Bannister also criticized state-run auto and health insurance systems such as those that exist in Canada.

Garamendi opposed no-fault insurance and said that under certain circumstances he would support state-run insurance in California.

“In fact, the government has stepped in in the past to provide insurance where there was no private market,” the Democratic candidate said. “One (such system) is presently being created in earthquake insurance (in California). . . . Nearly 50 years ago, a workmen’s compensation system was put in place.

“If there is no private market for low-cost auto insurance, then it would be appropriate for the state to step in and provide it,” Garamendi said.

Bannister said that in New Jersey a government-run auto insurance system has gone bankrupt and the state is trying to get the private companies to bail it out.

Garamendi suggested that the state require employers to provide health insurance coverage and subsidize small businessmen who cannot afford to do so. Bannister said he opposes such plans.

Both candidates agreed that they would preserve certain features of the present territorial rating system in which auto premiums are priced according to place of residence. Although both said insurers may be using such ratings to excess, they agreed that rural Californians should pay less than city dwellers because accident claims are higher in the cities.

Asked whether he felt the insurance companies had been acting in good faith in the ongoing battle over implementation of Proposition 103, Garamendi said, “Absolutely not.” He promised to make the companies obey the landmark initiative.

Bannister said the companies “have the rights of a free enterprise system” in trying to carry on their businesses as best they can.

“My opponent is from the insurance industry,” Garamendi declared. “We’ve seen a pattern over the last 50 years where people from the industry have gone into the Department of Insurance, become commissioner, taken care of the companies and then returned after a few years as commissioner to the industry.”

Bannister responded that as an insurance agent he had consistently fought for consumers against the companies.

Garamendi at many points in the debate lambasted the record of Gillespie, Gov. George Deukmejian’s appointed insurance commissioner. Bannister said that while he did not agree with all her actions, he felt she had done a credible job under the circumstances.

November’s election for insurance commissioner is the state’s first. The post was changed from an appointive to elective one under Proposition 103, adopted by the electorate in 1988.