CALIFORNIA ELECTIONS : INSURANCE COMMISSIONER : Agents Urge Clients to Back Quackenbush

Thousands of letters and telephone calls are going out from insurance agents to their customers urging the election of Republican Assemblyman Charles W. Quackenbush for insurance commissioner--and drawing bitter criticism from the outgoing commissioner, Democrat John Garamendi.

In a statement this week, Garamendi contended that the new effort will backfire, just as in the “war of insurance initiatives” in 1988 when the industry fought against Proposition 103 while promoting ballot measures of its own.

“I think the people know and understand that the insurance industry is not trustworthy,” Garamendi said.

“Everybody has their own personal experience. Everybody is going to be questioning why the companies and agents are doing so much to support Quackenbush. The answer is perfectly clear: They want their own lackey in the insurance commissioner’s office.”

Quackenbush spokeswoman Lynn Anderson said: “I think it’s very unfortunate that Commissioner Garamendi has chosen to single out a segment of our small business community for such ridicule.

“The people involved in supporting Chuck Quackenbush for insurance commissioner know and understand that it is precisely this anti-business attitude on the part of the commissioner and his handpicked candidate, (state Sen.) Art Torres, that has brought the economy in California and the attitude of the voters to its present dismal state.”

Torres, Quackenbush’s Democratic opponent, said: “I think it’s a sad day in California when the industry still arrogantly thinks they can buy their own commissioner.”

Central to the dispute is the Allstate Co., the state’s third-largest auto insurer, with 1,550 agents and 2.5 million active auto and other policies. It has directly encouraged its agents to send out pro-Quackenbush letters and participate in telephone banks.

Allstate reports obtained by The Times show that a considerable number of agents have responded to the request from the company’s California political action group. The reports show that Allstate is suggesting that, in making their phone calls, agents identify themselves as representing the Peace Officers Research Assn. of California rather than Allstate.

Letters have also gone out from independent and State Farm agents, but State Farm says it is neutral in the race and has not encouraged its agents to write. Another company, Farmers Insurance, has urged its agents to give money to Quackenbush, but has not suggested that they write to their customers.

State Farm is California’s largest auto insurance seller, while Farmers is second.

Garamendi, recalling that he fined Allstate $1 million for misconduct toward its policyholders after the Oakland Hills fire, charged that Allstate has intervened in the race because it wants a commissioner who will not fine the company again.

Quackenbush spokeswoman Anderson acknowledged that the Republican’s campaign has provided some of the language for sample letters Allstate sent to its agents. But she said apart from that, the effort is independent of Quackenbush.

Delia Chilgren, head of the Allstate political action group, said that although Allstate “is encouraging our people to get involved” in the contest, “there’s nothing here that intends to be coercive” and that an agent is free to back Torres without reprisal.

Agents are being asked, however, to report back what they do, and company documents indicate that one criterion for evaluating the performance of Allstate agents is the extent to which they respond to suggestions for such outside activities.

Meanwhile, Susan Foster, a State Farm agent in South Pasadena who has sent pro-Quackenbush letters to her customers, said she and other State Farm agents had not received any instructions from their company.

“From where I’m sitting, the insurance industry is in total turmoil,” she said. “We need to have a commissioner with a personal interest in cleaning up this mess, and it’s pretty obvious to us that Quackenbush is our best bet.”

Harvey Rosenfield, author of Proposition 103 and head of a group that seeks its full enforcement, said this week that a review showed that since the beginning of 1991, Quackenbush has received $935,855 in contributions from industry members.

Rosenfield said he has information that the industry “may give $2 million more before Election Day in an all-out $3-million attempt to buy the office.”

In a letter to Rosenfield, Quackenbush campaign manager Greg Butler responded: “If there are plans by the insurance industry to put $2 million into our campaign, I’d be interested in knowing.”

Butler did not deny that Quackenbush has gotten $935,855 from insurers.