By Sean P. Carr, BESTWIRE
SACRAMENTO, Calif. — When they go to the polls June 8, California voters will decide whether Insurance Commissioner Steve Poizner gets a shot to be governor, will choose the candidates to replace him and will determine the fate of a controversial automobile insurance ballot question. San Francisco voters will also vote on a bond measure to help the city prepare for future earthquakes.
The primary election will mark the beginning of the end of Poizner’s leadership of the Department of Insurance. The first-term commissioner and former entrepreneur is battling former eBay Chief Executive Officer Meg Whitman for the Republican nomination for governor. Both candidates are largely self-funded, with Poizner’s nearly $25 million overshadowed by Whitman’s $71 million contribution in her own behalf. The winner will face Democrat Jerry Brown, the current state attorney general and former governor.
Republican Assemblyman Mike Villines is running for his party’s nomination against insurance department enforcement attorney Brian FitzGerald. The term-limited lawmaker is a former Assembly Republican leader. He said he would focus on improving the speed-to-market of insurance products. Villines said he would serve his full term, and another if re-elected (BestWire, March 31, 2010).
But first he has to get by FitzGerald, a 16-year civil service employee who has pledged to spend no more than $5,000 on his campaign. FitzGerald said he would make laws and regulations, rather than political ambition and public policy agendas, the focus of his tenure. Without criticizing Poizner in particular, FitzGerald said he wants “to take the commissioner’s office out of play” when it comes to politics. Implementing aspects of the federal health care reform law will be a top priority of the next commissioner, he said.
Democratic Assemblymen Dave Jones and Hector De La Torre are touting their respective endorsements. Jones won the backing of the state Democratic party and teachers’ unions (BestWire, April 21, 2010). In the Assembly, Jones is seeking to extend the state’s Low Cost Automobile Insurance Program. As then-chairman of the Assembly Health Committee, Jones held a public hearing on Anthem Blue Cross’ plan to raise rates an average of 25% for holders of individual policies (BestWire, Feb. 16, 2010). Jones has topped De La Torre in fund-raising, $1.4 million to $465,000.
De La Torre has championed a bill to end rescissions and other health insurance measures. He has campaigned on stepping up penalties and enforcement actions for insurance companies and to accelerate the implementation of health reform. De La Torre has the backing of the Service Employees International Union and the California Nurses Association.
Proposition 17
Proposition 17 would allow insurance companies to lower premiums for drivers who have continuously maintained auto insurance coverage, even if they switch to a different insurer. Mercury General Corp. is funding virtually the entire Yes on 17 – Californians for Fair Auto Insurance Rates campaign, with donations of more than $14.9 million. The campaign has out-raised opponents of the ballot measure by nearly 15-to-one. Mercury Insurance Co. (NYSE: MCY), a member of Mercury General Group, currently has a Best’s Financial Strength Rating of A+ (Superior).
Proposition 17 is about consumer choice and market competition, not Mercury’s dollars, said Mike D’Arelli, executive director of Alliance of Insurance Agents & Brokers and a spokesman for Yes on 17. “People should be encouraged to shop, not punished for shopping,” he said.
The effect would be to legalize surcharges on consumers outlawed since Proposition 103 in 1988, said Doug Heller of the Campaign for Consumer Rights, an affiliate of Consumer Watchdog. According to opponents, because those with lapses in payments may be disqualified from any discounts, the initiative would allow companies to charge customers more for not having had auto insurance coverage in the past.
“Insurers are spending millions of dollars to influence the outcome of Tuesday’s election, but most voters don’t know insurance companies are out there propping up initiatives and attacking candidates,” he said in a statement.
Earthquake Safety Bond
San Francisco’s Proposition B is a $412 million bond measure that would fund improvements to a system of cisterns and pumping stations so that firefighters have access to water supplies and pressure in the event of another major earthquake. It would also improve facilities for police, fire and water delivery services. The city’s major political parties, labor unions and business groups have endorsed the measure.
sean.carr@ambest.com
No on Prop 17.