Accusations Fly as Election Day Nears

Comparing Republican Insurance Commissioner candidate Gary Mendoza’s consumer protection efforts to an Edsel, Steven Fisher criticized Mendoza’s toll-free help line in a letter to the editor of the Sacramento Bee on Oct. 5. According to Fisher, Deputy Director of the Department of Managed Health Care, thousands of consumers who sought help from the Department of Corporations’ 800 number were reportedly forced to hang up because no one at Mendoza’s department answered the line. Fisher also noted that the Department allegedly did not act for more than a month on nearly 60 percent of those consumers who were connected.

Mendoza, former Commiss-ioner of Corporations, has reportedly made his establishment of a toll-free help line the centerpiece of his campaign. According to the Bureau of State Audits, “Mendoza’s toll-free line was a connection to ‘indifferent customer service,'” Fisher wrote.

“I’m obviously very proud of the steps we took to protect patients’ interests,” Mendoza told Insurance Journal. “The establishment of the 800 number program was an important part of those efforts. Now the Department has had a five-fold increase in its budget, compared to the Department that I ran. They’ve been able to augment that program, but it wouldn’t exist had it not been for our effort.

“If it was an emergency situation, we responded in real time. If it was an issue that could be resolved in a more deliberate fashion, we did take more time to resolve that concern. It’s a statement that may be consistent with the facts, but in context was irrelevant.”
• Meantime, Mendoza condemned John Garamendi’s refusal to testify at a congressional hearing Oct. 10 into the Executive Life scandal held by the House Government Reform Committee.

“This is simply John Garamendi’s latest insult to the Executive Life victims. His refusal to even show up demonstrates his lack of concern and respect for the 360,000 policyholders, many of whom are elderly and seriously ill, and have been left financially devastated by his gross mismanagement of the Executive Life insolvency,” declared Mendoza.

The House committee ex-plored the Justice Department’s investigation into Credit Lyonnais, the government-controlled French bank that reportedly illegally purchased the insolvent Executive Life Insurance Company’s assets. Then-Insurance Commis-sioner Garamendi alleg-edly sold the company’s assets despite the strenuous op-position of Exec-utive Life policyholders who actually filed suit to block the sale, reportedly making billions for the French bank and other investors, while thousands of policyholders were left financially destitute. Garamendi maintains that he didn’t know that Credit Lyonnais was involved in the sale, an argument that has allegedly since been disputed by the French bank.

Lee Fink, press liaison for the Garamendi campaign, told Insurance Journal, “John Garamendi declined the committee’s invitation to speak because trial counsel for the Department of Insurance, who is handling the case, told John Garamendi that it would not be in the best interests of the case, or the former Executive Life policyholders to testify in front of Congress at this time. It would simply give the French Defendants free discovery into the Department’s legal and factual contentions. It is sad that Gary Mendoza, as a lawyer who has done a lot of work for HMO’s and insurance companies, is ignorant of such a basic principle. It shows that he is interested only in politics, not in policyholders.”

Cynthia Beisiegel contributed to this story. This feature has run up to the Nov. 5 election to keep readers updated in the race for California Insurance Commissioner.