CALIFORNIA IN BRIEF : SACRAMENTO : ‘Offshore’ Insurance Regulation Blocked

Gov. Pete Wilson Thursday rejected attempts by Insurance Commissioner John Garamendi to sharply restrict purchases of auto insurance from so-called “offshore” companies, headquartered abroad and not regulated by the state. The governor said that while he “agrees that consumers must be protected from unscrupulous insurance companies located outside the country,” he also agrees with the state Office of Administrative Law that Garamendi exceeded his authority in regulating against them without the Legislature taking action first. A spokeswoman for Garamendi expressed disappointment but said he will try to draft a new regulation that might win the governor’s approval. There have been frequent cases of offshore carriers selling insurance at low rates, but then failing to pay claims.