Questionnaire and answers:
Latin American Agents Association

[Note: This is one of the better questionnaires I've received so far, and it was a pleasure to fill this one out.]

LATIN AMERICAN AGENTS ASSOCIATION

2006 Insurance Commissioner Candidate Q&A

1. What are the qualifications of the ideal Insurance Commissioner and how does your background and expertise make you the right person for the job?

As you know, the California Department of Insurance serves both as a consumer protection agency and as an enforcer for the insurance-related laws of the state. Obviously, balancing insurance regulation with encouraging a healthy marketplace is no small task. So the ideal Insurance Commissioner should be a strong and unwavering enforcer of the laws, should serve the state by helping to provide the best climate for insurers to operate, and should be the state's foremost consumer advocate in insurance matters. On that final issue, the insurance industry has the force of an army of lawyers and lobbyists behind it, doing their bidding in the halls of power. The consumer has only the Insurance Commissioner and the CDI to protect him/her. As far as my own qualifications for the post, I believe that decades of working in the news industry gives me a perspective on issues, not to mention a sense of fairness, which makes me the right person to be Insurance Commissioner of California. In addition, candidates of the Green Party do not take corporate campaign contributions -- I can only accept contributions from individuals -- so as Insurance Commissioner I would have no obligation to "repay" any debts to campaign contributors other than to serve the public interest.

2. What interests you the most about insurance and why have you chosen to be a candidate for the office of top state insurance regulator?

My interest does not extend so much to insurance as it does to my interest in making sure insurance companies live up to their agreements to provide services to the insured and to the public. At this point in time, the insurance industry provides a vital service to the public, and I salute those in the industry who take on this glorious burden with the priority of serving the people they insure over making a profit. The primary reason I have chosen to be a candidate is to serve as a consumer advocate in Sacramento on insurance matters.

3. Recently, Governor Schwarzenegger has taken some heat, and received some kudos, for reaching beyond the G.O.P. in making some staffing decisions. Do you share this philosophy or do you feel you could do your job better staying within party lines?

First, I think Governor Schwarzenegger deserves neither kudos nor "heat" for making the choices he has made in staffing. I believe it's merely common sense to hire the best people for any available position. As you might imagine, the Green Party is not exactly brimming with insurance experts. So upon my election to the Insurance Commissioner's post, I would certainly draw from the best people available -- those currently in the California Department of Insurance and those who I feel deserve to be part of the CDI team -- regardless of party affiliation.

4. How do you see the CDI as having gotten off track and where do you believe it has achieved success? Also, what roles do the CDI and the Insurance Commissioner play in governing California's insurance market?

In the broadest of generalities, I don't think the California Department of Insurance has gotten off track. However, I do believe it can do more in the way of enforcement and regulation, as well as in investigations on both sides of the proverbial street (investigation of personal fraud against insurance companies as well as investigation of wrongdoing by insurance companies against the insured).

5. Although the year has just begun, there are already some contentious issue being discussed and strategized in conference rooms throughout the state. What do you see as some of the bellwether concerns for this year, and will the next Insurance Commissioner inherit much of that debate from the current administration?

The workers' compensation "reform" fiasco, obviously, is one of the primary concerns this year, and I can foresee that this huge mistake by the governor and the legislature in 2004 will be rectified sometime this year. Or at least that is my hope. If not, it will be a huge and contentious issue for the next Insurance Commissioner to deal with going into 2007. Another concern going forward would include the implementation of SB 840, the single-payer health care bill, which I expect to pass in the legislature this year. It will remain to be seen if it survives a veto by the governor and/or insurance industry resistance in the courts. But if it does clear these post-legislative hurdles, it would help if the Insurance Commissioner is unencumbered by obligations to corporate special interests, and again the Green Party does not take corporate contributions and would be unencumbered of having to resolve political "debts."

6. What other issues, perhaps some that have not yet been discussed, do you see being raised in the future?

One issue is expanding the state's program to insure low-income drivers from the handful of counties it now serves to include all counties. Along the same lines, the state should study allowing insurance companies to provide no-fault auto insurance as they do in other states.

7. In the past, the line between regulatory versus legislative "jurisdiction" has blurred. For example, the question of how much weight, if any, territory should carry as a rating factor, has vacillated between the CDI and the Legislature. Based on your knowledge of past and current debates, which challenges should be resolved through regulation and which are better left to state lawmakers?

Aforementioned in Question 1, the duties of the California Department of Insurance rest in enforcement of insurance-related laws. The Insurance Commissioner can, and should, also serve in an advisory capacity to the legislature in passing or opposing legislation. So finally the Insurance Commissioner would enforce laws passed by the legislature. As far as regulation goes, I believe that the CDI should be vigilant to enforce the laws. In the case of the rating by territory, I believe that should be resolved by the legislature and enforced by the Insurance Commissioner.

8. One of the least attractive aspects for a company doing business in California is our cumbersome rate filing process. Do you feel that the process needs to be streamlined, or is it working fine the way it is now?

I understand that insurance realm in California is a $90 billion industry per year. If I were an insurance company, I would jump through whatever hoops the state provided to get a piece of this pie. Forgive me if I'm reading too much into this question, but the subtext here speaks to an issue that I would like to address, and that's the threat of companies pulling out of California due to a real or imagined "poor business climate." Unless a company advocates corporate suicide, most rational people realize that any threats made by companies to walk away from such a huge market share by leaving the state are empty threats. But back to the question, I think the rate filing process, although cumbersome, is adequate to the state's needs, and requires no fixing. I'd be glad to be shown where this may be a faulty premise, but bear in mind that this case would have to be pretty overwhelmingly convincing.

9. Ever since California residents elected our first Insurance Commissioner (and before), many have been accused of being either in the insurance industry's pocket or a figurehead for consumer groups. How would you balance your responsibilities to all sides of the insurance transaction equation?

Interestingly, one does not have to look far to see examples, arguably, of both an insurance industry pocket-dweller (Chuck Quackenbush) and a "figurehead for consumer groups" (John Garamendi). And that's in quotes because I think Garamendi could have done more during his tenure, despite the perception that he's a self-appointed patron saint of the insured. Again, as mentioned in Question 1, the balance between enforcement of laws and cultivating a healthy environment for insurers to operate is no easy task, but I think it's one that's possible. To that end, the foundation of achieving this balance would be fairness and objectivity. Electing an Insurance Commissioner who is unencumbered by both corporate and so-called "special interest" campaign contributions would be an obvious first step, and I would fit that description as the Green Party's candidate.

10. If elected, what would you like to be your legacy as Insurance Commissioner?

Two items for a legacy would allow me to die (hopefully several decades from now) a happy former Insurance Commissioner: First, a legacy that I served the state and its people as the strongest consumer advocate in insurance affairs, and second would be a legacy that Greens can serve in the government in a responsive and responsible manner, dispelling once and for all the myth that Greens are simply tree-hugging hippies (or, in my case, ex-hippies) with nothing better to do than be idealistic political theoreticians who take no action on their ideals.

11. What is the role of an insurance agent/broker in helping his/her community to obtain insurance?

I'm not sure I follow this question. I really can't answer about an agent/broker's role in helping his/her community because I'm not one. However, I would like to speak to the responsibility of agents/brokers in the community, and why it's important for them to be responsive and sensitive to the needs of their communities. At the risk of preaching to the choir, it goes without saying that insurance agents/brokers are responsible to their community by providing it with the necessary insurance coverage so people and business can function unencumbered in their day-to-day dealings. This responsibility extends further during a crisis, and agents must respond quickly in such crises when they arise, with the full support of their companies behind them. Needless to say, this is more of a good business practice rather than a regulatory or legislative requirement, and I realize that most in the industry see it that way. However, any corporate or industry abuse -- either real or imagined -- can set off a chain of events that would require legislative and/or regulatory intervention.

12. What difference, if any, is there between an insurance agent and an insurance broker? Should there be a difference?

On the surface, this sounds like the Real Estate Agent/Realtor debate. If you'll allow me a truth-in-advertising moment, I have to say this: I haven't given this issue much thought, and would defer to the insurance industry to make a decision on outlining the difference (or similarities) between an agent and a broker, and advise the California Department of Insurance and the legislature on any changes, if need be.

13. What is your plan to decrease the high uninsured rate, both in automobile and health insurance?

In health insurance, I believe passage and implementation of SB 840 will rectify much, if not all, of the high uninsured rate as it applies to health insurance. As far as auto insurance, I believe that companies providing no-fault insurance to low-income drivers would decrease the high uninsured driver rate down dramatically.

14. Did you ever have any experience personally with any insurance issue(s) that was/were difficult to handle? How did you resolve the issue(s)?

I have had an experience recently where an insurance company was slow to pay a bill, but it was rectified quickly by phone calls and with the intervention of my employer. But on other personal dealings with insurance agents and their companies (and these have been few and far between), the experience has been positive. However, while campaigning I have encountered many people who tell me insurance horror stories that are either very one-sided with the insured person's point of view, or they detail a gross violation of trust and possibly illegal acts on the part of insurance companies. When hearing these stories, I would surmise that the truth lies somewhere between those extremes. Nevertheless, it speaks to a general perception, real or imagined, that more regulation is needed as well as that insurance companies need to work on their image -- that somehow they are not exactly "like a good neighbor" and that some who are insured don't feel that they are in "good hands."

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