Candidates Pledge to Keep Insurance Rebate Rules : Prop. 103: Democrat Torres says he would uphold all Garamendi’s regulations. GOP’s Quackenbush envisions ‘some flexibility’ on rate increases.
Both the Democratic and Republican candidates for insurance commissioner pledged categorically Friday to enforce the Proposition 103 rebate regulations adopted by the present commissioner, Democrat John Garamendi, and upheld unanimously by the state Supreme Court.
The pledges are important because if a new commissioner were to change the regulations, it could legally reopen the rebate issue and allow the insurers who have not paid rebates to initiate an entire new round of litigation. The first round has lasted six years.
It was not surprising that state Sen. Art Torres, the Democratic candidate, made the pledge, because he has been a frequent critic of the insurance industry and a sympathizer with Proposition 103.
But the pledge by Assemblyman Charles W. Quackenbush, the Republican candidate, came from a self-proclaimed “free market” advocate who has questioned the heavy regulation called for under Proposition 103 and frequently expressed sympathy with the industry.
In the wake of this week’s Supreme Court decision, Quackenbush said Friday: “Free market is one thing but enforcing the law as passed by the voters is another. I have to enforce Proposition 103. There is no choice in the matter.
“A Deukmejian-Wilson high court with some jurists on it who were not perhaps sympathetic with the public policy enunciated in Proposition 103 has nonetheless unanimously upheld these rebates,” Quackenbush said.
“I have no choice but to enforce them, and if I don’t I certainly won’t be reelected to this position or any other position.”
As a result, Quackenbush said he would keep the Garamendi regulations for the rebates, $800 million of which have been paid and $1 billion more of which may be required.
“Yes, for this particular issue, I think the (Garamendi) regulations are as good as they can get,” the Republican said.
And, he said, in a warning to the insurance industry: “This is the law of the land, and as much as they hate to comply with it, they’re going to have to. . . . Any insurer who believes they will get a better deal by waiting for John Garamendi’s successor is mistaken.”
But, Quackenbush added, he maintains “some flexibility” on changing regulations Garamendi has promulgated for future insurance company rate increases, another key feature of Proposition 103. Quackenbush indicated that he reserves the right to consider his free market principles on deciding new rates.
Meanwhile, Torres said: “I will abide by the decision of the court and continue the approach which brought us to this point, which is Garamendi’s insistence on the validity of these regulations. We can’t afford to change the regulations.
“Any departure from this decision is in violation of the trust of the voters and that’s how I view it. There’s a trust that’s been created here and validated by the court, and that trust cannot be violated.”
Torres made no distinction between accepting Garamendi’s rebate and rate approval regulations.
In Sacramento, Garamendi reacted:
“I’m pleased that Mr. Quackenbush has followed Sen. Torres’ lead and agreed to carry out my regulations to provide the consumers the full rebate allowed under Proposition 103.
“I hope that Mr. Quackenbush would agree with Mr. Torres that the prior approval regulations are equally important and valid and will be carried out. Unfortunately, he seems to be dancing around that issue.”