Calif. commissioner to examine broker disclosure, workers’ comp issues

California Insurance Commissioner Steve Poizner may have three major priorities for his office — to make his office non-partisan, to fight insurance fraud and to prepare the state for the next major disaster — but that doesn’t mean he won’t be addressing heavily debated insurance issues such as broker disclosure and compensation and workers’ compensation reform as well.

Addressing more than 250 agents and brokers at the Insurance Brokers and Agents of the West annual meeting, Poizner said his role is to protect consumers. In doing that, he believes consumers should have “all the information they need” regarding compensation.

Poizner noted that the previous commissioner John Garamendi, now Lieutenant Governor, decided that voluntary disclosure guidelines were enough to protect consumers but wants to ensure that is true. An advisory group will examine the issue in the coming weeks. “If the voluntary rules are working, then great,” Poizner said. “If not, we’ll continue to pursue a solution.”

Poizner said workers’ compensation reform is “definitely moving in the right direction, but rates are still higher than the national average.” Thus, he wants to “fine-tune” the system.

In tackling his three campaign priorities, Poizner said he will ask the legislature to make the Insurance Commissioner’s position nonpartisan similar to the state Superintendent of Public Instruction position. “Protecting consumers and lowering costs through the free market — regulating the insurance industry — is not a Republican or Democratic affair,” he said.

Also, Poizner said he will fight to lower the costs of insurance for consumers by fighting fraud. “To prevent illegal insurance activities, the DOI will be forming regional working groups to “better coordinate” state fraud officers, district attorneys and fraud officers within insurance companies. He also is working to fill the 20 percent vacancy rate of fraud officials.

Additionally, Poizner said he wants to help California be better prepared for a major disaster. “Only one in eight homeowners have earthquake insurance,” he said. Furthermore, the California Earthquake Authority might not have enough claims capacity if a major earthquake strikes in two years, after insurance companies’ payments to the authority disappear, he said.

“We need to reassess the CEA. People are not happy with access, the cost of deductibles. We’re greatly exposed,” he said.

Finally, Poizner said he wants to help California be successful under future economic conditions. “I oversee the fourth largest insurance market in the world,” Poizner said. “The decisions I make ripple around the world [and I] can have a fundamental impact on the health of the economy.”

“Am I going to be as hostile as the last guy?” he said, summing up an audience-member’s question. “I’m going to fulfill my legal obligations to protect consumers,” he responded, but he reassured agents and brokers that he realized accomplishing that is a “balancing act.”

“If a company is doing something illegal I’m going to come down [on it] like a ton of bricks,” Poizner said. Yet he noted California also needs a business-friendly climate to ensure a healthy insurance market. “We need an environment where the rules are enforced but one that attracts producers.”

Poizner was the keynote speaker at IBA West’s annual meeting. At the meeting, the association installed new officers and presented Steve Young, senior vice president and general counsel for the association, the Ramsden/ Sullivan Memorial Award.

Topics California Fraud Agencies Workers' Compensation Market