One-on-One with California Senator Jackie Speier

Senator Jackie Speier (D-San Mateo/San Francisco) is finishing up her second and final term in the California Senate. Best known in the insurance industry for her work as chair of the Senate Insurance Committee, in 2000 Speier chaired the Senate proceedings in a number of Senate and Assembly hearings regarding the settlement practices of the California Department of Insurance (CDI), which ultimately led to a reform of the CDI and the resignation of then-Insurance Commissioner Chuck Quackenbush.

Speier’s political career almost never happened. In 1978, Speier accompanied California Congressman Leo J. Ryan as legal counsel to Jonestown, Guyana, to investigate allegations against the Peoples Temple cult and its leader, Jim Jones. As the group prepared to board a plane on the Port Kaituma airstrip, several members of the Peoples Temple opened fire, killing Ryan, three members of the media, and one of the cult’s own. Speier was shot five times and left for dead on the airstrip. Later that day, 911 members of the Peoples Temple were found dead in a mass suicide know as the Jonestown Massacre.

Speier was rescued and given medical aid the following day, but two bullets still remain lodged within her body. Her near-death experience has defined her commitment to public service and her zest for life.

Two years after the Jonestown Massacre, Speier was elected to the San Mateo County Board of Supervisors. In 1985, she was re-elected and served as chair. Speier’s career took off when she was elected into the State Assembly in 1986. In 1994, she was nominated by both Republicans and Democrats for the State Assembly—a dual party nomination that has occurred only twice in California history. During her term in the Assembly, 181 of Speier’s bills were signed into law.

Speier joined the Senate in 1998 and has further developed her impressive track record during her time in the Senate—90 of her bills have been signed by former Gov. Gray Davis.

As her tenure nears its end, Speier took some time out of her busy schedule to offer her thoughts on the current insurance marketplace and what’s in store for 2004.

Insurance Journal: Let’s start with workers’ compensation. Upon entry into office, Gov. Schwarzenegger called a special session of the Legislature to enact further cost-saving reforms to the state’s workers’ comp system. What efforts do you seeing being made in 2004 to aid in the reform?

Senator Jackie Speier: I think that we will continue to see progress made in reducing the cost of workers’ comp, building on the massive reform measure that was passed this year. There’s more that needs to be done. We’re already engaged in developing additional reforms for next year, and the goal is to have a package to the Governor by the 30th of March.

IJ: Do you have any ideas as to what’s going to be included in that package?

Speier: I think there are additional reforms in the medical area. We’ve got a deal with the actual disability payments issue. We need to look at 24-hour care and creating opportunities for that, and I would also continue to support, as I did this year in my bill, independent medical review to reduce the cost.

IJ: What is your opinion about the situation with State Compensation Insurance Fund and the allegations that they are currently under reserved, and if the Fund were to go bankrupt, what would happen to injured workers and businesses that rely on the Fund for coverage?

Speier: I believe that we are in a position relative to State Fund to encourage them to reduce their rates more, but because of deregulation, which was at the request of the business community, we don’t have that same authority. There’s a part of me that actually supports the idea of some form of universal workers’ compensation insurance if the market does not correct itself. State Fund will never go bankrupt. That’s the one thing that will never happen, in my estimation.

IJ: SB 1 will prohibit insurers and financial institutions from sharing a customer’s information without their written permission. This proved to be a long-standing dispute between yourself and the financial and insurance industries. Why was this so important to you?

Speier: Because it was important to 90 percent of the voters in California. I believe that Californians have financial information that belongs to them. That information is not the property of the financial institution when they apply for a loan or an insurance policy, and that they should be able to control the dissemination of that financial information to third parties or to other financial institutions. SB 1 provides that protection starting July 1, 2004.

The point is, you would be no more likely to turn to a stranger and tell them what your bank balance was and what your assets were than the next person, and yet, the sharing of financial information by financial institutions historically has been just that.

IJ: Let’s talk about SB 60, the bill that allowed illegal immigrants to obtain a California driver’s license. You were previously in favor of that, but along with Governor Schwarzennegger and several other Democrats, you agreed to rescind the bill. Why did you change your mind?

Speier: It’s my responsibility to lead, and it’s my responsibility to represent. I believe that in this situation the voters of this state had spoken and that they wanted the law repealed. I continue to have concerns about the fact that two million Californians who are undocumented will continue to drive cars just like they were driving them before we passed SB 60, and I am very concerned about the safety on the roads and the lack of auto insurance these individuals have.

By virtue of California law, unless you have a driver’s license, you cannot purchase just auto insurance. So we’re guaranteeing that the numbers of uninsured motorists are continuing to rise, which means ultimately that all of us law-abiding drivers will continue to have high costs associated with our uninsured motorists coverage. I think that it’s in everyone’s interest to have confidence in knowing that when they are on the roadways in California, the driver next to them has auto insurance as well.

IJ: Do you see that bill being reintroduced in the next session of the legislature?

Speier: Actually, in my conversations with Governor Schwarzennegger, he and I are on the same page. He believes that undocumented drivers in California should have background checks and that we need to link auto insurance very specifically to driver’s licenses, and we need to develop a means by which we can do that.

IJ: Tell me a little bit about the status of AB 1297, the bill that aims to define an agent versus a broker. From the legislature’s perspective, why is this needed?

Speier: It’s a very complex issue. It has everything to do with employment law and when an individual is an agent and when they are an independent contractor, and for all intensive purposes, you just can’t have it both ways.

IJ: Moving on to the recent wildfire tragedy, how do you feel that insurers have responded to the needs of Californians during the tragedy?

Speier: Well, I will say that most insurers to date have shown good faith in attempting to accommodate their client. Other insurers in varying degrees were responsive and non-responsive, and I think there were a couple that were outright unreasonable in their expectation that homeowners would have to specifically identify every item of ownership before they were going to be reimbursed for the coverage for personal effects.

IJ: To what do you attribute your successful track record in getting so many bills passed in your two terms that you’ve served as senator?

Speier: Perseverance, a remarkably gifted staff, and a convincing argument.

IJ: What are your plans when your second term comes to an end?

Speier: I have announced that I’m running for Lieutenant Governor.

IJ: Are there any other insurance-related issues that our readers need to be aware of in the coming year?

Speier: I think this coming year, we will be looking at expanding our reforms on workers’ comp, we will be looking at homeowners insurance and people’s access to homeowners insurance as we have this year. We will be looking at cleaning up the requirement of showing proof of auto insurance at the time of registration to include not just renewals, but also new purchases, requiring the DMV to receive electronically from insurers the proof of auto insurance, and then requiring the DMV to subsequently revoke the registrations of vehicles that do not have auto insurance.

To comment on this story, e-mail cbeisiegel@insurancejournal.com.