Consumer groups call on Quackenbush to release names of insurers threatening to cancel 1 million homeowners policies by summer; Quackenbush must inform homeowners which companies plan to cancel policies; give consumers time to replace policies; consumer groups demand: which insurers are holding California hostage?

SACRAMENTO, Calif.--(BUSINESS WIRE)--April 3, 1996--In a letter today, Consumers Union and Proposition 103 Enforcement Project urged Insurance Commissioner Quackenbush to release the names of insurers threatening to terminate 1 million homeowners policies.

According to Quackenbush, unless a new government program is approved that significantly shifts earthquake liability from companies to taxpayers, the companies would begin terminating policies by summer 1996.

"As a public servant, Commissioner Quackenbush has the responsibility to name those insurance companies making such threats so that policyholders will be given ample time to relocate their policies to other companies," according to Betsy Imholz, Special Projects Advocate for Consumers Union's West Coast Regional Office.

"Rather than making the problem worse, Commissioner Quackenbush should be working with reputable companies in helping policyholders find replacement homeowners coverage."

Proposition 103 Enforcement Project's Gina Calabrese added: "The Commissioner has done a grave disservice to California homeowners. He has aided the industry's efforts to hold California's homeowners hostage by using the threatened terminations to generate support for the CEA.

"Quackenbush's pandering to the industry ensures only extreme anti-consumer outcomes: The California Earthquake Authority or policy terminations. We need a Commissioner that will encourage those companies that want to participate in California's homeowners market to help homeowners find reasonably priced coverage." -0-

Attached is the letter sent to the Commissioner:

April 3, 1996

Commissioner Chuck Quackenbush
Department of Insurance
300 Capitol Mall, 15th Floor
Sacramento, CA 95814

Dear Commissioner Quackenbush:

    For months now, you have repeatedly told the public that certain
insurers are threatening to cancel more than 1 million homeowners
policies beginning this summer unless the Legislature approves the
California Earthquake Authority.  Today, we urge you to immediately
disclose to California's public the names of all companies that have
made the threat, and how many policies each of these companies plans
to terminate.
    As a public servant, you have a responsibility to the
policyholders of this state to protect them against these types of
threats.  Homeowners should be given the benefit of your knowledge
about these companies.  With this vital information, consumers would
have ample time to find replacement coverage from other insurers to
ensure their homes are fully protected.
    For those homeowners who face imminent policy terminations, we
urge you to work with reputable companies to help find
reasonably-priced replacement coverage for consumers.  In addition,
we urge your Department to prepare an easy-to-understand list of
companies that are selling new policies to help consumers in their
search for coverage.  It would also be of tremendous value if your
Department developed a list for consumers of their rights if they
receive a non-renewal notice form their insurer.  These actions
should help alleviate a potential crisis.

Sincerely yours,

Betsy Imholz                     Gina Calabrese
Special Projects Advocate        Senior Attorney
Consumers Union                  Proposition 103 Enforcement Project

cc: Members Of The State Legislature

CONTACT: Consumers Union, Sacramento

Betsy Imholz or Mariko Takayasu, 415/431-6747

or

Prop. 103 Enforcement Project

Gina Calabrese, 310/392-0552