Did He Just Forget?

An unrepentant Insurance Commissioner Chuck Quackenbush accused the state Senate Insurance Committee Monday of “wasting taxpayer money on this endless witch hunt.” If it seems endless, that is because the committee is finding it nearly impossible to pry any detailed information from Quackenbush and his corps of six deputies about questionable department practices dealing with claims from the 1994 Northridge earthquake.

Quackenbush returned to the committee hearing room two weeks after stalking out of a session that he called a “political ambush.” The committee wanted details on the handling of millions of dollars in negotiated settlements with insurers in lieu of threatened fines totaling as much as $3 billion.

Quackenbush was somewhat more forthcoming on Monday, but the commissioner still seemed remarkably ignorant of what happened to nearly $13 million that insurance companies donated to private foundations established by his office.

Although Quackenbush earlier said he took no direct role in the Northridge settlements, executives of one firm told The Times Monday that Quackenbush personally encouraged them to “capitulate to the department’s demands.” Did he just forget?

Much of the insurance industry contribution was spent on what amounts to political puffery for Quackenbush. A portion of it, $6 million, was to compensate aggrieved earthquake victims, but so far they have received none of the money.

In response to questions, Quackenbush acknowledged a lack of restrictions on the foundations and how they spent the money. In the future, he said, allocation of funds for outreach programs and televised public service ads will be more tightly controlled.

Still lost on Quackenbush, however, is that if insurance companies shortchanged earthquake victims, they should be fined and made to pay remaining claims, not allowed to contribute relatively puny amounts to some foundations. Quackenbush shrugged at the suggestion that this process circumvented state budgeting procedures and prevented the Legislature from exercising its oversight function. But that is exactly what it does.

Quackenbush claims that any effort to fine the companies would drag out in the courts for years. So be it, if that is what it takes. If they’ve done wrong, they should bear the stigma. And if the commissioner wants to make TV promos with Laker star Shaquille O’Neal--as he did--let him put it in his budget and run it through the Legislature, just as the law provides.

Neither Quackenbush nor his six deputies could even say who in the Department of Insurance arranged for about $750,000 to be transferred directly from one insurer to a media company used by Quackenbush to buy advertising time for his reelection campaign. The money was to be used for a television ad campaign featuring Quackenbush talking about how his office works to protect consumers. Protecting consumers would seem to be a new concept to the insurance commissioner. A simple and obvious first step toward consumer protection would be to make the insurance companies pay victims of the Northridge quake what they are owed for their destroyed property and their six years of grief.