Wilson Won’t Fire Aide in Insurance Rebate Flap

Gov. Pete Wilson refused Thursday to fire the state official accused of erecting roadblocks to the delivery of $2-billion worth of Proposition 103 insurance rebates and blamed Democratic state Insurance Commissioner John Garamendi for the delays.

As heated rhetoric over the long-delayed rebates escalated, Wilson also rebuffed a Democratic warning that unless the nomination of Marz Garcia was withdrawn, the Senate Rules Committee would side with Garamendi and reject his confirmation.

“I call upon the Senate Rules Committee to vote in good conscience to reject the commissioner’s posturing and to recommend Mr. Garcia’s confirmation,” Wilson said in a hastily prepared statement soon after the warning was delivered by Senate leader David A. Roberti.

In the past nine months, Garcia, director of the Office of Administrative Law, has rejected on legal grounds Garamendi’s emergency regulations that have set the framework for promised automobile and homeowner premium rebates enacted when the voters passed Proposition 103 in 1988.

Wilson twice has sided with Garamendi and overturned Garcia’s disapproval of the rebate ground rules. But in February, he said he would intervene no more in the dispute between Garcia and Democrat Garamendi, the state’s first elected insurance commissioner and a potential gubernatorial candidate in 1994. Wilson said the legality of Garamendi’s regulations should be tested in court.

Earlier this week, Garcia rejected a third set of Garamendi’s regulations, a move the commissioner said would further delay implementation of the rebates for up to two years. He accused Wilson and Garcia of siding with insurance companies against consumers and demanded that Garcia be fired.

On Thursday, Roberti, chairman of the Democratic-dominated Rules Committee, which is tilting against Garcia, asked Wilson to withdraw Garcia’s appointment. In a letter, Roberti told Wilson he believed if Garcia remained in the post he “will continue to block implementation of Proposition 103.”

A short while later, Wilson issued his angry statement accusing Garamendi of trying to make Garcia a “scapegoat” for his own failure to deliver the rebates, which the insurance industry has fiercely fought in court since 1988. “John Garamendi has been derelict in his duties to (voters) to obtain rebates,” Wilson said.

Garamendi shot back, saying the governor’s “absurd charges only give comfort to the insurance industry.”

Proposition 103 called for a 20% rollback in automobile and homeowner premium rates. Subsequently, the state Supreme Court scaled back the figure but held that insurance companies are entitled to a fair rate of return. Garamendi has said his rules provide for an industrywide 10% rate of return.