Wilson Official Blocks Rebates for Third Time

For the third time, an appointee of Gov. Pete Wilson has blocked state Insurance Commissioner John Garamendi’s embattled program to hasten the delivery of more than $2 billion in long-promised rebates to millions of California motorists, it was announced Tuesday.

Wilson twice before reversed identical actions by Marz Garcia, director of the state Office of Administrative Law, on the politically sensitive issue of insurance premium rebates. But this time, the governor was not expected to intervene.

For millions of insured California motorists and homeowners, the latest flap represented another delay in the long-running controversy over when or if most major insurance companies will write rebate checks to their customers as ordered by passage of Proposition 103 in 1988.

An angry Garamendi, a potential Democratic contender for governor, suggested Tuesday that Wilson fire Garcia. He also accused Wilson of taking sides “with the insurance companies and their lawyers and against consumers.”

The voter-approved rebates contained in Proposition 103 have been resisted by the insurance industry in court battles. Some insurers, including the Automobile Club of Southern California and Mercury Insurance Group, have abandoned the fight and agreed to make the rebates.

In an order dated Monday and made public Tuesday, Garcia rejected a series of “emergency” regulations advanced by Garamendi that set the ground rules under which he can order insurance carriers to make the rebates.

Garamendi has been holding rebate hearings under authority of the emergency regulations and had sought to extend them a third time until permanent rebate regulations are in place. But in an interview, Garcia said he rejected them, in part, because no emergency condition exists and because Garamendi has made no substantial progress in adopting permanent regulations.

Emergency regulations enable Garamendi to hold rebate hearings without first submitting his proposed regulations to a time-consuming process where they could become bogged down in administrative delays. The insurance industry contends that the emergency procedure tramples on its constitutional rights.

Last summer and again last February, Garcia blocked Garamendi’s regulations, only to have the action overturned by Wilson, who said at the time that the rebate process must move along. In the February action, Wilson said he reversed Garcia so the issue could move swiftly to court for a final resolution. He also served notice that he would not intervene between Garamendi and Garcia again.

Harvey Rosenfield, head of the Voter Revolt organization that sponsored Proposition 103, said Tuesday that if Garcia’s action is not overturned by Wilson or the courts, it could add another year or more to the long wait for rebates. He said Garamendi would have to write new regulations and hold new rebate hearings.

Rosenfield also called on the Senate Rules Committee to refuse to confirm Garcia when he appears at a scheduled confirmation hearing today. He termed Garcia an agent for the insurance industry.

Although Garcia is a former Republican state senator, his confirmation as a state official by the Senate has been considered uncertain for months. Senate leader David A. Roberti (D-Van Nuys), a supporter of Proposition 103, said he had not made up his mind on Garcia, but that Garcia will face stiff “questions and evaluation based on his response to Proposition 103.”