Posted on 10/06/2006 2:55:41 PM PDT by calcowgirl
SACRAMENTO – A political newcomer seeking his first elected office faces a familiar figure admittedly nearing the end of his political career in this year's campaign for state insurance commissioner.
Republican Steve Poizner and Democratic Lt. Gov. Cruz Bustamante are in an open race that appears to be among the closest of all the so-called down-ballot contests.
For motorists, homeowners, business owners and anyone else who buys insurance, the choice may be one of the most important votes they cast on Nov. 7.
The insurance commissioner has broad regulatory powers, including the authority to approve or reject the rates on an estimated $120 billion worth of insurance products that California businesses and individuals purchase every year.
The commissioner also oversees a department that licenses more than 1,500 insurance companies and 340,000 agents and brokers. The office presides over major anti-fraud and consumer protection units and sets policies that determine how the department interacts with the public.
“This position touches every family and every business in a big way,” said Poizner, a 49-year-old Silicon Valley entrepreneur who started two high-tech companies and amassed a multimillion-dollar fortune.
Poizner, a Texan who stayed in California after earning a graduate degree in business from Stanford, spent nearly $7 million of his own money on a failed Assembly race two years ago.
He has poured $7 million more into his latest campaign and would become a likely gubernatorial candidate down the road if he wins.
Bustamante, 53, rose from modest Fresno roots to become the first Latino speaker of the Assembly, and later the first Latino to win a statewide office in more than a century.
He served two terms as lieutenant governor and waged a controversial campaign as the Democratic alternative for governor in the 2003 recall. He has promised his wife that the commissioner's post will be the last political office he seeks.
Both Poizner and Bustamante say they will emphasize the commissioner's role as a consumer advocate.
But the campaign has been overshadowed by lingering fallout from a past corruption scandal and Bustamante's own fundraising transgressions.
Former Insurance Commissioner Chuck Quackenbush was driven from the office six years ago after allegations that he pressured insurers to contribute millions to foundations that largely promoted his political career.
Quackenbush also had taken $6 million in campaign contributions from the industry he regulated.
The industry's support of commissioner candidates has been an issue in every election cycle since.
Incumbent Democrat John Garamendi and his Republican opponent both declined to accept insurer contributions four years ago. Garamendi is running for lieutenant governor.
But Bustamante solicited more than $130,000 in this election from insurers, agents and others in the business before he abruptly decided to return the money just before the June primary election.
“It was sending the wrong signal,” he said recently. “I want the signal to be that the consumer is always going to be first in my decision-making.”
Bustamante has been dogged by campaign fundraising controversy before. After the recall campaign, he agreed to pay a record $263,000 fine for funneling massive contributions through an old campaign account in an attempt to skirt the state's fundraising limits.
Personal fortune
Poizner, whose personal wealth guaranteed that he could wage a well-financed campaign, said it doesn't matter that Bustamante sent some money back. “You can't unring that bell, the fact that he had no philosophical problem about linking up financially with the insurance industry,” Poizner said. “It's a huge conflict of interest and it's wrong.
“This is a core issue in this campaign because the insurance industry really wants to own the insurance commissioner.”
But Poizner is not pure on the subject, Bustamante said.
Insurance company contributions to a state Chamber of Commerce committee, Bustamante alleged, were later transferred to an initiative campaign that Poizner chaired last year while he was an announced candidate for insurance commissioner.
“He went on TV,” Bustamante said, referring to Proposition 77, a redistricting reform measure. “He used the money to promote both his name and as an announced candidate for insurance commissioner.”
Said Poizner: “That's just nonsense.”
Poizner is back on television with what he calls an “initial” $11 million purchase of airtime statewide. His campaign has raised nearly $9 million as of late September, with $7.3 million of that from his personal fortune. Bustamante has reported raising $1.3 million, minus $124,000 returned to industry sources.
If elected, Poizner said, he will seek to have the office converted to a nonpartisan post with a ban on industry contributions to anyone running for the position.
“It's a regulator,” he said. “It has no business being involved in partisan politics. . . . I'm going to have a bipartisan team.”
New ratings
Both Bustamante and Poizner have embraced Garamendi's new auto rating criteria, which reduce the weight of ZIP codes and make individual driving records the dominant factor in calculating auto premiums.
Poizner, however, has suggested that he might go even further. A smaller, less-arbitrary territorial component could be developed to eliminate ZIP codes entirely from the formula, he said.
Bustamante wants to consolidate the scattered state regulation of health care insurance within the department, which now has jurisdiction over some plans, but not health maintenance organizations, or HMOs.
“Somebody should be in charge of this process, somebody we can point to and, if necessary, point at,” he said.
As part of that effort, Bustamante said he wants to work on a private-sector solution to provide coverage for some 7 million Californians who have no health insurance.
Poizner said his top priorities would be an assault on $15 billion in insurance fraud committed every year, a crackdown on uninsured drivers, and a campaign to prepare the state for the next natural disaster.
He said he would attempt to eliminate a 25 percent vacancy rate in the department's anti-fraud unit. He vowed to pressure the Department of Motor Vehicles to track and suspend the licenses of those who allow their insurance to lapse.
Both Poizner and Bustamante reserved judgment on another set of Garamendi regulations that would streamline the rate approval process and set a ceiling on insurers' annual rates of return.
One industry official said the pending proposal would cap the rate of return at 11 percent.
Also in the race are American Independent Jay Earl Burden, a Sacramento college student; Green candidate Larry Cafiero, a Scotts Valley newspaper editor; Libertarian Dale Ogden, a San Pedro insurance consultant; and Peace and Freedom candidate Tom Condit, a Berkeley writer.
Cruz Bustamante
Party: Democrat
Age: 53
Residence: Elk Grove
Occupation: Lieutenant governor
Background: Lieutenant governor, 1999-present: state Assembly, 1994-98; field director for Assemblyman Bruce Bronzan, 1988-93; field director for U.S. Rep. Richard Lehman, 1983-88; Fresno Employment and Training Commission, 1977-83. Graduate, Fresno City College; attended Fresno State University.
SACRAMENTO — For the first time, prominent consumer advocate Harvey Rosenfield is backing a Republican in the race for state insurance commissioner — a move that may change the odds in the race.
Rosenfield, the author of 1988's landmark Proposition 103 auto insurance initiative, has always been considered a Democratic ally. But the party's candidate in the Nov. 7 election is Lt. Gov. Cruz Bustamante, whom Rosenfield has criticized for trying to water down Proposition 103 while in the state Assembly.
(snip)
Rosenfield, head of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, has offered to appear on Poizner's television spots. Poizner, who is planning to spend $11 million on TV ads, said he was considering the offer.
The unexpected endorsement "should be very persuasive to a large number of undecided voters," Republican strategist Joe Rodota said.
Cruz Bustamante - former indian casino greeter and all around sleaze - Insurance Commissioner?
Please. Even my local rat propaganda outlet endorsed the Republican.
If Bustamante got in, he'd raise rates for all the gringos.
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