Mendoza Looks for Nov. Triumph in Calif. Commissioner Race

Insurance Journal senior writer Dave Thomas recently interviewed Republican Insurance Commissioner candidate Gary Mendoza, the former Commissioner of Corporations about the upcoming election and the current issues facing the industry. Below are some excerpts that highlight Mendoza’s views on these issues, such as mold, California’s role in the insurance community both nationally and worldwide, and credit scoring.

Dave Thomas: If elected in November, what will you do regarding CDI staff?

Gary Mendoza: There’s no question the department needs new leadership. I respect the job Harry Low has done as a caretaker. It’s clear, however, [that] there has to be some changes. One concern people have is that the department is not focused on its core mission, as it needs to be. We need more insurance companies writing business in the state. It [the department] needs to be more receptive to new companies trying to get into the state without compromising one bit its consumer protection mission.

Thomas: Talk a little bit about bringing more business back into California.

Mendoza: It is an absolute priority to bring more business in the state. We have good companies withdrawing from the state just like when (John) Garamendi was commissioner the first time. We need to get as many companies back into the state as possible and to do that we need to get the department more focused on its mission, more uniform in its application of the law and more interested in getting good companies in the state instead of pushing them out.

Thomas: How important will it be for you, if elected, to work with other commissioners across the country?

Mendoza: I think it’s important to meet with commissioners at NAIC meetings and pick their brains. It is clear that California has one of the most hostile environments for regulating insurance companies. There are ways to make the state a better place for companies to do business. My singular focus will be to protect the interests of California consumers. However, I think the department can be made more efficient and one way to do that is to listen to what other states are doing.

Thomas: Obviously with its size and the amount of businesses’ here in California, the state has to take a role as a leader as far as insurance goes.

Mendoza: Absolutely, but it hasn’t to date. We need to lead by example. There is no question we have very significant problems here in the state of California. Some issues go beyond the borders of California, like homeowners insurance with respect to mold. Other issues are not uniquely problematic to California, but there problems nonetheless that are very significant—like the workers’ compensation system that is on the verge of falling apart. I think leading the country on cracking down on auto insurance fraud is an important way to control auto insurance rates. Twenty-five percent of the cost of auto insurance is based on auto insurance fraud. Being a leader in the country on cracking down on auto insurance fraud is an important way to help reduce auto insurance rates. I think tackling important issues in an apolitical way and producing positive results for the people of this state is a way to make California a leader.

Thomas: How much of a problem is mold in California, and do you feel the media is overplaying it?

Mendoza: There are two things driving mold—fear and greed. We need to tackle the fear by better information. Better information can help curb the fuel behind this that is driven by the lawyers. They’re running seminars called “Mold is Gold.” It may be gold for the lawyers, but it is arsenic for everyone else. Here’s an example of an issue that John Garamendi isn’t capable of tackling because a significant source of his support is the same people who are holding these seminars. He isn’t capable of putting the interests of those he’s elected to serve ahead of his own political interests. There are compelling stories and when they’re underscored by $30 million jury verdicts, I’m not going to blame the media, but we need more science and fewer lawyer-driven lawsuits.

Thomas: Another issue that has touched off some controversy is credit scoring. Your thoughts on this?

Mendoza: I know some states are backing away from it. I think there is mixed view within the states and the various insurance companies on the value of credit scoring. One thing I want to do is make decisions when I have all the facts and [have] had an opportunity to analyze them. I’m not trying to evade the question, but I think it is important that you make decisions when you have the complete information.

Thomas: What message would you have for the agents out there who may be struggling or are concerned with the current market?

Mendoza: When I’m elected, they’re going to have more product offerings for their customers. We currently have a dysfunctional marketplace right now of customers chasing companies. We need companies chasing customers. I’m going to make sure that agents abusing their authority pay a price, but I don’t think that’s the lion’s share of agents by any means. I also think the agents and brokers are a particularly valuable source of information, so I expect to work closely with the agents and brokers, consumer groups and companies on a regular basis. My opponent is trying to convince people he’s someone other than who he’s always been. That now he’s going to listen to these folks delivering these services. A zebra doesn’t change his stripes.

Thomas: Speaking of your opponent, I wanted to throw out some names and get your thoughts on them. First, Harry Low?

Mendoza: A man of honor, has done a good job, and always has.

Thomas: John Garamendi?

Mendoza: Ambitious (pause), I’ll let his record speak for itself.

Thomas: Chuck Quackenbush?

Mendoza: Chuck Quackenbush abused his authority and deserved to be chased out of office, although I firmly believe John Garamendi did more damage to people’s interest than Chuck Quackenbush. Also, when I was Commissioner of Corporations, we brought a lawsuit against Lloyd’s of London for securities fraud. Instead of [Quackenbush] calling me up and telling me to make certain our lawsuit didn’t compromise Lloyd’s ability to provide reinsurance in the state, which I would have given him that confidence, he sued us. I didn’t appreciate it at the time, but now it’s somewhat of a badge of honor because I’m the only one in the race that Chuck Quackenbush sued for protecting California’s consumers.

Thomas: Are you interested in having more debates? (Garamendi press liaison Lee Fink indicated the Sept. 17 debate would likely be the only one of the campaign).

Mendoza: I’m not surprised John doesn’t want to have more debates. If I had his record and was facing someone who had mine, I wouldn’t want to debate either. We’ll have as many debates as he’s willing to have.

Thomas: Do you feel you can pull Democratic and Independent support over the next month?

Mendoza: The issues that divide Democrats and Republicans really aren’t partisan issues. If people have a claim, they want to get it handled. If they’re trying to find a coverage, they want to find a coverage. The office of Insurance Commissioner is all about protecting California consumers. There is zero question who has a better record of protecting California consumers. It’s clearly me.

Thomas: Are there any other issues out there that you feel aren’t getting the attention of workers’ comp, auto, etc?

Mendoza: Its important people have confidence in the department that is responsible for regulating such an important part of the state’s economy. Frankly, they haven’t had that confidence through much of the last 12 years. I’m going to restore that confidence because of the way I’m going to lead the department.

Thomas: Is it safe to say if elected, Gary Mendoza will fill his term right to the end?

Mendoza: When I come to office, every day I will be doing what I can to make this office as effective as possible. I’m going to approach problems from the right perspective and let the political chips fall where they may.

To hear the Mendoza interview in its entirety, visit https://www.insurancejournal.com/interviews/mendoza/?home/