Saying consumer protection is “neither a Democratic nor Republican issue,” California’s new Insurance Commissioner, Republican Steve Poizner, has named a 14-member executive staff that includes Democrat Gary Cohen as general counsel and deputy commissioner.

Poizner had previously been criticized for naming as his special counsel former insurance industry lobbyist William Gausewitz.

Cohen, who last year helped put together a proposed cap on title insurance rates and escrow fees, will stay in the position he was appointed to in 2003 by Poizner’s predecessor, Democrat John Garamendi.

As insurance commissioner, Garamendi — who was elected lieutenant governor in November — argued that a lack of competition in the state’s title insurance and escrow industries had led to excessive rates. In one of his final acts in office, Garamendi proposed capping title insurance rates using a formula based on the industry’s costs, in order to limit profits.

If companies refused to submit cost data starting next year, title insurance rates would be rolled back to 2000 levels, with an adjustment for inflation. That would amount to a roughly $1 billion-a-year rate reduction. 

Although legal analysts in the California Office of Administrative Law announced Feb. 21 that they could not approve Garamendi’s proposed rate cap, Poizner said there are only minor issues of clarification needed to obtain OAL approval, and that he fully supports the plan.

Poizner should have a good understanding of the thinking behind the OAL’s decision — his newly appointed special counsel, Gausewitz, was appointed by Gov. Arnold Schwarzenegger in 2004 to head up the OAL.

In a press release issued after the OAL decision, but before Poizner made public his position in support of Garamendi’s proposed rate cap, the Escrow Institute of California hailed the ruling as a “David beats Goliath victory” for “hundreds of small-business owners who dared to fight back against an abuse of power by former Commissioner John Garamendi.”

The Escrow Institute’s press release mentioned Cohen by name, saying that he, Garamendi and economist Birny Birnbaum — the author of a study of industry practices commissioned by Garamendi — “completely failed to understand the fiercely competitive nature of the escrow industry in California.”

Cohen, who before coming to the Department of Insurance managed 66 lawyers as general counsel for the California Public Utilities Commission, graduated second in his class at Stanford University Law School, according to a press release issued by Poizner’s office.

Heading up Poizner’s team as chief of staff and chief deputy insurance commissioner is Republican Jim Richardson, former principal and chief executive officer of Golden State Consulting, and a former chief of staff to prominent California lawmakers. Richardson, who will oversee a department with 1,350 employees and a $200 million budget on behalf of Poizner, holds master’s degrees in education, English and government.

Other key staff members named by Poizner include Chief Deputy of Operations Dennis Ward, a 33-year veteran of the department; Legislative Director David Link, a Democratic with expertise in health policy and insurance; and Special Assistant to the Commissioner Jesse Huff, a former director of the Department of Finance under Republican Gov. George Deukmejian. 

Poizner is retaining a number of Garamendi appointees as division heads, including Dale Banda in enforcement, Ramon Calderon in financial surveillance, David Diehl in rate regulation, and Sherwood Girion in consumer services and market conduct.

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