It’s a sunny fall day in Sacramento and at 300 Capitol Mall, all is peaceful. Up on the 17th floor at the California Department of Insurance (CDI), the quiet murmur of voices, purring fax machines and chatter from the cubicles sounds like any other office.
But just a few months ago, the scene would have been very different–TV cameras in the hallway, phones ringing off the hook, reporters swarming the entrance, and an Insurance Commissioner who was fighting demons of his own creation as his staff scrambled to cover for him.
The new Commissioner, Harry Low, is a quiet man who radiates an aura of calm. His handshake is firm and his voice soft, with none of the flashy grin and movie star chic of his predecessor.
And the Department is welcoming the change, to say the least. The 1,100 employees of the CDI now have a leader with no ulterior motives, who is there to do the job he was appointed to do, nothing more and nothing less. He will serve the consumers equally as he will serve the insurance companies and he will take no money from anyone.
And Low knows he has his work cut out for him. In one of his first exclusive meetings with the press, Low told Insurance Journal that “there are serious priorities” to be dealt with.
“Obviously we’re trying to work on these Northridge settlements and trying to set them aside. We haven’t really completed the recisions on some of those, but we’re working on it–perhaps there may be some litigation.”
Low said he will also be addressing the issue of Holocaust claims, which now fall under the responsibility of the newly formed Special Projects Office. “I think that in the next few weeks, we should have some showing that we have that money in place and will work out some method of distribution.”
According to Scott Edelen, acting deputy commissioner of the CDI’s Strategic Planning, Communications/Press Office, the new division will handle “things of a more urgent nature”–the Armenian genocide and slavery bills, as well as the Holocaust claims.
And of course, high on Low’s priority list is the problem on everyone’s mind in California: workers’ compensation. “The workers’ comp field is very troubled,” Low said. “The whole industry probably needs a different look, better systems and adjusted rates so that the industry can get healthy.” Exactly how these changes will come about is something that Low plans to spend quite a bit of time on in the coming months.
Aside from the bigger, more glamorous issues, there are some housekeeping items in Low’s inbox. “There are a number of problems in just trying to clear the backlog that we have in fraud and investigation,” he said. “We’re also trying to speed up the services in our legal department and our organization. There is also some slowness in the way we handle licensing—we’re trying to speed that up. We’ve had the benefit of the state auditor’s report that suggests these things need to be improved.
“One area that we’re hoping–I’m hoping–to learn more about is the Conservation and Liquidation Office [CLO] to get a better sense of what goes on there.” The CLO, of which Harry LeVine is now the head following the resignation of Richard Krenz at Low’s request, reports directly to Low and will function as a member of the Executive Staff. “I’m going to ask my special assistant to look very closely at that office and help me better understand and suggest some procedures,” Low said.
Legislative issues that Low will be addressing include SB 1805 (Escutia), which requires the CDI to post final insurance company market conduct exams on its website. “We’re trying to work out some rules on that now,” Low said. “We’re proposing some instructions on what will be provided, what will be kept private and we’re trying to also review that law so that we not only can make it work, but that it is consistent with what was intended in the Escutia bill.”
Will the new “Quackenbush-related” bills be effective in keeping the office of Commissioner above board? “Yes, I think so,” Low said, “and we’re already looking at how we might need to clarify the law. We’re looking toward the 2001 session…to say, ‘here’s the way in which we might improve some of this legislation that passed.'”
Although he may be looking ahead, Low remains noncommittal as to whether he will run for re-election when his term is up in 2002. “All I can say is he hasn’t ruled it out,” Edelen said.
This lack of obsession with getting elected highlights another important difference between Low and his predecessor. “Everything [with Low] is based on the letter and the intent of the law–it’s a straightforward approach with no fuzzy areas,” Edelen said. Edelen described the chaos that surrounded the last days of Quackenbush’s reign: “One day we had 204 media calls–it was a feeding frenzy. The hardest part was doing the regular work–we had to put everything else on hold. We still did press releases and dealt with the fraud but it got lost–it felt like an exercise in futility sometimes.
“The conclusion of the last six months unfolded so quickly and there was so much work to be done,” he continued. “When Kelso took over, it was pretty chaotic.”
However, from all reports, Kelso managed to take control and his efforts “really turned the situation around,” according to Edelen. “His moving in here made the transition light years ahead of where we’d have been if he hadn’t moved us forward. Now we’re three weeks into Low’s tenure and it’s like three years.”
Although Kelso deserves full credit for his valuable work in a tough situation, Low has shown that he too is up to the challenge.
According to Mark Leonard, spokesman of the California Earthquake Authority (CEA), Commissioner Low showed up for his first meeting with the CEA having already read the entire Tillinghast-Towers Perrin report–no easy feat. “He is very engaged…we had a great two-hour meeting going over the CEA, going over his role as a CEA governing board member,” Leonard said. “He expressed an interest in, at least initially, serving himself on the board as opposed to appointing a designee.”
Leonard said that most board members, past and present, tend to appoint designees. “Treasurer Angelides appears about 50 percent of the time depending on what’s on the agenda; otherwise his designee appears,” Leonard said. “Neither former Commissioner Quackenbush nor Governor Davis has ever appeared themselves; they’ve always appointed designees…But we welcome Commissioner Low’s presence and look forward to working with him.”
That feeling seems to be mutual. Low also expressed his commitment to working with the CEA and to attending at least these first meetings in person. As for his reading the entire Tillinghast report, Low seemed surprised that others were surprised. “I think it helps; I’m just trying to catch up on a lot of this material.”
And finally, what everyone wants to know: what’s up with Quackenbush? “He’s in Hawaii, but I think he called here last week,” Edelen said. “Something has to happen in the next three weeks, maybe a task force, an indictment, who knows?”
Meanwhile, at the CDI, the pervading air of calm is a welcome change of pace.
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