Groups Say Quackenbush Proposals Will Stifle Consumers

Three consumer groups Wednesday attacked Insurance Commissioner Chuck Quackenbush for proposed emergency regulations that they say will stifle the consumer’s voice in rate-setting and other insurance matters.

The regulations, to be issued within a week, will make it tougher for consumer intervenors to get reimbursement for legal fees and other expenses they incur when participating in administrative or court hearings on insurance issues, the consumer groups said.

They complained, too, that the regulations were being issued on an emergency basis, which means that they will take effect as soon as they win preliminary approval from the Office of Administrative Law, rather than after a public hearing process.

“In effect, the rules give the commissioner . . . the authority to deny compensation to legitimate and useful intervenors when he rules in favor of insurers,” the Proposition 103 Enforcement Project, a West Los Angeles-based consumer group, said in a statement Wednesday.

Quackenbush sparred with consumer advocates previously this year, accusing some of having “gotten fat off the public trough” through intervenor fees that in some cases have reached $500,000. He challenged several pending reimbursement requests and is being sued by the Proposition 103 Enforcement Project.

Quackenbush spokesman Richard Wiebe said the proposed rules are meant to more clearly define the kind of contribution a consumer organization must make toward a regulatory decision in order to merit reimbursement.

“We want to prevent situations where an intervenor simply shows up at a hearing, says, ‘Me, too,’ and collects a fee for it,” Wiebe said.

But Michael Wells, staff attorney for Utilities Consumer Action Network, said the proposed rules would discourage intervention and, in the long run, cost consumers money.

Wiebe said the regulations are being issued under the commissioner’s emergency authority because Quackenbush wants them in place by July 1, when he expects to begin a series of hearings on the remaining premium rebates that insurance companies owe their customers under Proposition 103, the 1988 insurance rollback initiative.

The consumer groups, which also include Consumers Union, noted their objections in a letter to the California Senate Insurance Committee on Wednesday. Harvey Rosenfield, Proposition 103 author and head of the Proposition 103 Enforcement Project, also threatened to sue if the rules are implemented.