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May 18th, 2000

Everything But Earthquake Insurance

MEMO: Insurance Commissioner Chuck Quackenbush.

Dear Quack:

I know life looks rough. The press has dredged up the news that you went easy on insurers whom your staff thought should be fined up to $3 billion because they were slow or cheap paying claims from the 1994 Northridge earthquake. And instead of fining the tightwads, you let them contribute some $11.6 million -- a bargain -- to a nonprofit foundation that spent $3 million putting your mug on TV, and lavished a like amount on political organizations in a position to help your and your wife's electoral ambitions. Too bad $263,000 went to a football camp your kids attended.

While none of your accusers has been able to point to any specific laws you broke, you were forced to admit that not a dime among these millions has gone to an actual earthquake victim. You could call the fund the Foundation for Everything But Earthquake Losses. Sounds better than a slush fund.

Major newspapers are calling on you to resign and angry consumers are talking impeachment. But the good news is that you've picked the right era to be caught up in a scandal of greed and malfeasance.

Here's my advice.

1. Stop saying you've done nothing wrong. Tell the world you now see that what you did was very wrong. Evincing sorrow and indignation, vow to work to change the laws so that no politician is ever allowed to do what you did again. Buddy up with John McCain. Endorse the bill by state Sen. Jackie Speier, D-Hillsborough, to make the insurance commissioner's job an appointed post instead of elective office. Her bill couldn't prevent a slush fund, but it's not as if you really care about reform, anyway.

2. Play up the They-All-Do-It angle. Make a list of other regulators who set up self-serving funds and go easy on regulators. OK, some earthquake victims won't care -- they selfishly want what their policies promised them. But you might convince voters that it's not fair that you should suffer just because you got caught.

3. Keep a tab on the cost of hearings and investigations. If the Ken Starr probe proved one thing, it's that taxpayers don't like paying for political investigations. Instead of sending out those whining ``greetings from my garrison'' notes, release a weekly running tab for the hearings and court costs.

4. Delay, don't cooperate. That'll drive the cost of investigating higher. But also, the longer the brouhaha lasts, the more likely voters are to blame your accusers for being out to get you at all costs.

5. Brag that you extorted the insurance industry even though the industry gave you what Speier estimates to be $6.4 million in campaign donations. Try to make a positive out of the Los Angeles Times report this week that your staff printed phony newspaper stories to scare insurers who didn't want to go along with your scheme -- with the lovely lead, ``Commissioner Quackenbush today announced the results of an investigation into the claims handling practices of (INSERT INSURANCE COMPANY NAME HERE) . . .''

Before consumers start to feel sorry for the insurance suits, tell reporters the bright side of the story: If you had felt beholden to insurers because of those millions, you wouldn't have dared try to scare them like that.

6. Bank on apathy. It's work for people to keep up with this story, and the public has a short attention span for nonsex scandals. Wait the storm out. You may have to drag the GOP down with you, but there is a principle at stake here.

If you resign, you will have to admit that what you did was sleazy. You will have to exhibit shame. And we know that the pol with lasting power never exhibits shame, he simply says he feels it, and behaves as if he doesn't know what the word means.


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