Gag Order on Insurance Monitor’s Reports Sought

Insurance Commissioner Chuck Quackenbush and Atty. Gen. Dan Lungren are seeking a gag order to prevent a court’s special master from talking to the news media about the state Insurance Department’s handling of consumer complaints.

In a court filing, Lungren, acting for Quackenbush, has accused the special master, attorney Ray Bourhis, of issuing a report “which in truth is a biased, one-sided diatribe which ignores or distorts every fact inconvenient to his political agenda.”

Bourhis, a former Democratic candidate for insurance commissioner, was appointed a special master in 1991, with authority to monitor the Insurance Department’s handling of complaints. He obtained the post as part of a settlement of a suit against former Commissioner Roxani Gillespie.

Lungren’s July 6 filing called on San Francisco Superior Court Judge John Dearman to instruct Bourhis to report his findings only to the court and not the news media.

In an unusual action, Dearman ordered Bourhis on July 7 to cease communicating with reporters pending an Aug. 10 court hearing.

Bourhis, in a court brief before the ruling, called the gag order petition “a transparent effort to conceal from the public that in the last four years Mr. Quackenbush has not levied a single fine against a major insurance company in this state for unfair claims handling practice violations.”

Reflecting his earlier report, he also asserted that in receiving 1,204,442 consumer calls to the Insurance Department’s hotline in 1995, 1996 and 1997, the department opened only 42,668 complainant files.

As for the accusations that he is following his own political agenda, Bourhis called them “completely absurd.”

However, Bourhis, a San Francisco trial attorney, has for many years made no secret of his disagreements with the policies of Quackenbush, a Republican who has frequently championed insurance business interests.

But Quackenbush spokeswoman Dana Spurrier said this week that during the commissioner’s first term, the Insurance Department has levied a record $29.8 million in fines against insurance companies.

“This court case gives us an opportunity to show that Commissioner Quackenbush has fined more insurance companies than any other commissioner in the department’s history,” Spurrier said.

In a list she provided, however, only three companies that would generally be considered major carriers--Prudential, Cigna and John Hancock--were on the list. Prudential was assessed more than half the total fines under Quackenbush’s administration.

Other companies fined included such relatively little-known insurance firms as First Financial, Progressive Casualty, Coast National, Foundation Health National Life, Stewart Title and National Western.

All of the fines of major companies were for unfair sales practices or rating violations, not unfair claims practices.

The list appeared to support Bourhis’ claim that no major companies were fined for claims handling violations.

Bourhis’ office said Friday that he was on vacation, and in any event could not, under Dearman’s interim order, comment further on the situation.