Don't Reopen Old Wounds.

IT'S amazing how expensive our scandals can be. As the city of Los Angeles faces lawsuits that could cost hundreds of millions before the Rampart police scandal is cleared up, the state is dealing with a multimillion-dollar crisis of its own: fixing the damage created by the Quackenbush Catastrophe.

The latest wrinkle in the saga of former Insurance Commissioner Chuck Quackenbush, who resigned late last month amid allegations that he allowed insurers to avoid $3 billion in fines related to mishandling Northridge earthquake claims and funneled settlement money into ad campaigns meant to boost his own political profile, is being played out in San Francisco Superior Court.

A San Francisco attorney named Ray Bourhis was appointed "special master" over the state Insurance Department in 1991, making him a watchdog over the way the department handles claims from consumers. Bourhis has filed a complaint asking that all settlement agreements negotiated between insurers and the Department of Insurance over Northridge claims be voided. That means every claim filed in the wake of the devastating 1994 temblor would have to be reopened, at immense cost to insurers and state regulators.

What good would this do? Precious little. Fact is, most of the businesses that were damaged by the earthquake have already repaired the damage on their own, gone bankrupt and disappeared, or packed up and left town. While some San Fernando Valley business organizations are still studying the residual impacts of the quake on local companies, the voices from the business community calling for a reopening of the claims process are all but silent.

It's a different story for homeowners. Many remain who claim they were treated unfairly by their insurance companies, and the cumulative cost of all their outstanding lawsuits could add up to billions. Yet even Bourhis admits that reopening the claims settlements between the Department of Insurance and insurers won't impact those individual lawsuits.

What it would do is cost taxpayers untold millions in regulatory and legal fees. The impact on insurance companies would be even more devastating. 21st Century Insurance Co. of Woodland Hills was driven nearly to insolvency by the Northridge quake; reopening every claim might just be enough to finish the job. Even if it didn't, California insurance companies would undoubtedly be forced to raise their rates for current policyholders to make up for the added legal and claims costs.

There are better ways to fix the damage wrought by Quackenbush's misuse of the powers of his office. The homeowners who still feel they are owed money will get their day in court without reopening the settlement process. The best approach now is to take steps to make sure nothing like this happens again.

Gov. Gray Davis, who championed the 1988 initiative that created an elected insurance commissioner, now admits he was wrong. While some of the insurance reforms created by Proposition 103 have proven beneficial, making the commissioner an elected office was a bad idea from the start.

Quackenbush's abuse of office was egregious, but he isn't the first problematic insurance commissioner. There is no mystery to the reason. Running for political office brings with it the need to raise money. If you want to raise money, you have to go to corporate donors - and in the case of the insurance commissioner, that means asking insurance companies for cash. It is absurd to think an officeholder can be held responsible for regulating the very corporations that helped put him or her in office.

Davis says he now supports making the insurance commissioner an appointed rather than elected office. That would be a big step in the right direction.