California Insurance

John Garamendi, California’s first elected insurance commissioner, there are 500 was angry at the failure of Executive Life Insurance Insurance Company, answering their questions and try to allay their fears and receive a warm response, as he promised, “I work for you.”

But in almost the next breath, Mr. Garamendi felt compelled for the “miracle, I am not an employee”, when it comes to evacuating the wreckage of Executive Life.

On insurance, “said Garamendi gloom of the public meeting on Friday, there are real risks of financial losses in the wake of his capture Los Angeles insurers in the last month. And he repeatedly reminded his audience that problems of Executive Life, which had invested in high-risk “Junk Bonds”, had their roots in the coming months and years before he took office in January.

A little more than four months after the beginning of his tenure as the Regulatory Authority California insurance, Mr. Garamendi, a democratic state, the former legislator, is the point of human beings while trying to solve what may be the worst crisis of insurance nation. His management of the situation go a long way toward determining whether insurance is potentially devastating losses escape, and could be key in determining whether the life insurance industry can save his reputation as rock solid financial stability .

Its performance is also observed in Washington, where Congress is discussing whether the system of Heads of State of the State regulation is appropriate to monitor the insurance business, more and more complex. And it is well observed in other countries, including many in California’s leading role in the renewal of insurance in a post-Commissioner, including consumer protection and not to its traditional role of industry support to develop.

Mr. Garamendi faces an enormous task. Not only is it with the collapse of Executive Life, a subsidiary of First Executive Corporation, but also the seizure last week by another insurer with a huge burden Junk Bond Portfolio: the first capital Life Insurance Company, a Unity of the First Capital Holdings Corporation.

The actions against the leadership and the first capital of life are the greatest failures in the insurance sector. Including the customers of the unit Executive Life in New York and First Capital, a subsidiary in Virginia, who both now under the control of supervisors in these countries, around one million policyholders and pensioners federal risk losses in the worst case, up to billions of dollars. Chance to build reputation

Mr. Garamendi, 46 years old, a former college football players and Peace Corps volunteer, said a strong political ambition, the crisis has a chance to build a reputation in California and across the country as a strong-minded, ‘Regulatory Authority for a very specific industry, affects almost all consumers. Mr. Garamendi said his goal is that the California Insurance Department “the best agency of consumer protection” of the nation.

But the role of the State, the Commissioner believes that the undeniable political risk for Mr. Garamendi. While he is eager to see how an aggressive consumer advocate, he helped to avoid, he promises not to be able to maintain such persons as at Friday’s Executive Life collection of clients, perhaps on itself whether it should be a day to tell them that their savings and pensions lost.

In an interview, Mr. Garamendi distracted questions about political risk, saying its mandate of four years “is like a game of four quarters, and we are only one third of the way through the first quarter.

But it is clear he enjoys in the middle of the action. “I’m not good sitting on the bench,” he said. Auto insurance debate

Mr. Garamendi, so far, a great brand of consumer groups for its handling of the crisis of life insurance, and for his role in an tobenden debate in California on automobile insurance rates.

After Proposition 103, an initiative California voters in 1988, automobile insurance rates has been zurückgerollt to 20 per cent. But among predecessor, Mr. Garamendi, Roxani Gillespie, a representative of the former Republican governor George Deukmejian, the rate of decomposition lost in the bureaucracy has been decisive. Mr. Garamendi has promised to provide reductions in interest rates very soon, maybe even this year.