CALIFORNIA ELECTIONS: INSURANCE COMMISSIONER : Garamendi to Focus on Prop. 103, Cost Cuts

A victorious John Garamendi, California’s first elected insurance commissioner, vowed Wednesday to make implementing Proposition 103 and reducing the costs that contribute to high auto and health-care premiums his early priorities.

Despite a million-vote margin over his Republican opponent, Huntington Beach insurance agent Wes Bannister, Garamendi seemed sobered both by the election loss experienced by his wife, Patti, who failed in a bid to succeed him in the state Senate, and by the magnitude of the job ahead.

Garamendi said--and industry and trial lawyer representatives tended to agree--that the chances for progress will be greatest if he avoids getting bogged down in the reform battles of the past, particularly no-fault insurance.

With Republican governor-elect Pete Wilson supporting no-fault, Democratic Assembly Speaker Willie Brown opposing it, and Garamendi switching from a pro- to anti-no-fault stance during the campaign, observers suggested that pressing the issue would only result in a deadlock.

“We have to change the nature of the debate and move away from the focus on no-fault,” Garamendi said in an interview Wednesday. Instead, savings can by obtained for customers by concentrating on stemming fraud and abuse and speeding up the payment of fair claims by companies, he added.

Insurers contacted Wednesday agreed that no-fault is not now in the cards.

Stan Zax, chief of the Zenith Co. and long active in the Assn. of California Insurance Companies, the industry’s lobbying arm in Sacramento, said: “There are a lot of questions before you get to no- fault. Should there be mandatory insurance in California? Are there other ways to lower costs? Can we successfully go after fraud? How do you define the issue?”

Bannister, who advocated no-fault in the campaign, agreed Wednesday that for now “what Garamendi needs to do is to take each of the problems . . . and deal with them separately.”

Garamendi said he asked for a meeting next week with the outgoing appointed commissioner, Republican Roxani Gillespie, whom he had frequently criticized in his campaign.

But two leading consumer advocates sounded notes of impatience Wednesday. One of them, Harry Snyder, West Coast director of the Consumers Union, expressed fear that in paying off his campaign debt Garamendi would take contributions from the very interests he is supposed to regulate.

While acknowledging his sizable debt, Garamendi said he will continue to refuse contributions from insurance executives, agents and brokers, as well as trial lawyer associations and political action committees. During the campaign, however, he did accept donations from wives of insurers, as well as individual lawyers.

Harvey Rosenfield, leader of Voter Revolt and the author of Proposition 103, said meanwhile he will press Garamendi to fulfill his campaign promise to make the companies obey Proposition 103.

“In my mind, his No. 1 priority has to be to order the companies to provide rollbacks and to block further litigation delay by the companies,” Rosenfield said. “That’s how he will be judged, his success in that.”