Activist Rosenfield Turns Democrat, May Bid for Insurance Post

Edging toward a possible uphill challenge next year to Insurance Commissioner Chuck Quackenbush, consumer advocate Harvey Rosenfield has changed his party registration from independent to Democratic.

Rosenfield said last week that he is “intensively considering” a bid against the Republican Quackenbush, who has indicated that he will run for reelection, and is “talking to people all over the state and nation about it.”

“I expect to make up my mind within a month,” said the 45-year-old protege of consumer activist Ralph Nader.

Rosenfield would have to leave his $60,000-a-year position as head of the nonprofit Proposition 103 Enforcement Project if he ran. If he is hesitating at all, he said, it is because he would have to be assured that he could raise at least $3 million within a few months to make a candidacy credible.

In registering Democratic, Rosenfield said he was accepting advice that independent candidates generally have not fared well in California and he would need the Democratic label to convince voters he was a serious contender.

Quackenbush, 43, has not announced a reelection bid but has formed a campaign committee. His campaign manager, Blake Isaacson, said last week the commissioner will run on the theme that he has lowered insurance rates and enforced insurance laws rigorously.

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Rosenfield said that if he runs he would campaign against Quackenbush on grounds that, in having accepted millions of dollars of campaign contributions in the past from the insurance industry, the commissioner has made himself a creature of the industry.

Isaacson declined to discuss details of financing a Quackenbush reelection campaign. But he asserted that a Rosenfield candidacy would impede Quackenbush’s efforts to lower auto insurance rates. Rosenfield’s group has repeatedly requested public hearings on Quackenbush’s actions, delaying implementation in some cases by years.

“Harvey has been fighting Commissioner Quackenbush at every step of the way . . . and whether he does that as a Democrat or an independent is not material,” Isaacson said.

Rosenfield said one reason he might run is that “there is no credible candidate ready to represent the public and take on the insurance industry and Quackenbush.

“The people, in passing Proposition 103 in 1988, made this office elective to have a consumer advocate there, and what we have there now is an advocate for the industry,” he said.

Checks around the state in recent months have confirmed that many prominent Democrats are shying away from a run against Quackenbush.

State Sen. Patrick Johnston (D-Stockton) said as early as last year that he would not run. “The insurers will put in enough money to keep Quackenbush from losing,” Johnston said.

Assemblyman Wally Knox (D-Los Angeles) this week laughed off rumors that he might be a candidate. “I have absolutely no intention of running,” he said, “and I haven’t heard of anyone up here [in Sacramento] who has any interest in doing so.”

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A spokesman for Senate President Pro Tem Bill Lockyer (D-Hayward) reiterated Friday that Lockyer may run for attorney general but definitely not for insurance commissioner.

“I think part of the reluctance of people to run against him [Quackenbush],” said Isaacson, “is Quackenbush’s record. Rates are down and enforcement is up.”

Despite his backing from the industry, Quackenbush has moved in recent months to portray himself as a consumer advocate. He announced with a flair a 3% average price decrease in auto insurance and has made much of fines he has occasionally imposed against miscreant business practices in the industry.

Quackenbush also continues the nine-year legal struggle to get State Farm, the state’s largest auto insurance seller, to pay rebates called for under Proposition 103, although the company has recently won a key ruling from a judge who said it is not required to rebate any money.

The commissioner said he would appeal.

Rosenfield, a 1974 honors graduate of Amherst and recipient of a law degree from Georgetown University, has been active on state initiatives since 1986.

In 1988, he wrote Proposition 103 and then led the campaign, winning with a narrow victory despite being outspent by industry foes $63 million to $3 million.

Rosenfield’s enforcement group has been criticized for receiving about $2 million in “intervenor” fees from the state, and indirectly from insurance companies, for its role in challenging industry positions at public hearings, as permitted by Proposition 103.

His group’s interventions have saved the public as much as $15 billion in the form of rate reductions and refunds, he says.

Another criticism has been that Rosenfield, like Nader, often supports trial lawyers’ interests and receives contributions from them. The lawyers are a frequent rival of the insurers in lobbying on insurance issues.

Some trial lawyers say Rosenfield has solicited contributions from them.

Despite Rosenfield’s expressed view that the insurance commissioner’s job should belong to a consumers’ champion, the experience in most states that elect insurance, utility or transportation commissioners has been that most of the time the elected official is close to those he or she regulates.

The reason apparently is that the regulated parties have more incentive to make campaign contributions for such posts than anyone else, and frequently do so. Thus, they have a decisive influence over the results in most of the elections.