Controversy in insurance commissioner race

LOS ANGELES California's insurance commissioner is responsible for regulating the insurance industry and protecting consumers. Two state assemblymen are battling for the job. But what's making headlines is not their credentials, but how much money is being spent and who's spending it.

State records show insurance companies including Allstate, Blue Cross and Mercury have spent $5.7 million on ads supporting Republican insurance commissioner candidate Mike Villines.

It's not illegal, but according to consumer advocate and Consumer Watchdog Founder Harvey Rosenfield, it's a major conflict of interest.

"You've got Mercury Insurance, which is facing tens of millions of dollars in penalties for breaking state law, donating to elect an insurance commissioner that obviously, it hopes, is going to let it off the hook when it has to pay those fines," said Rosenfield.

Both Villines and his opponent, Democrat Dave Jones, took an oath not to accept campaign money from insurance companies. But Villines says these ads are completely independent of his campaign.

"I don't even know what happens on that side," said Villines. "I'm working so hard on my campaign, on the issues that are important to me: keeping work-comp low; rational and common-sense healthcare implementation that takes care of the safety net; cracking down on fraud; getting products approved quicker. Those are the things that people care about. So I've stayed focused on those."

Records show Jones has also received more than half a million dollars in contributions from lawyers who represent and defend insurance companies. He too says the money is not a conflict.

"I have been very clear that I'm not accepting contributions from anyone that I would directly regulate," said Jones. "The insurance commissioner does not regulate lawyers. The insurance commissioner regulates insurance companies."

Both candidates will have a lot of responsibility if elected, including how California will implement President Obama's healthcare plan. Jones supports the program and Villines opposes it.

Both, though, are in favor of a state-run exchange for those who can't afford health insurance.

"We need to be very careful in how we implement this so that we provide an affordable product for both businesses and consumers," said Jones.

"Let's start in the beginning with pre-existing conditions, exchanges, force competition, take care of the safety net, and be fair and balanced," said Villines. "Ultimately, that's the best protection for consumers. And that's how I'll implement it."

Insurance companies may be spending millions of dollars in support of Villines but the Republican has only raised about a half a million dollars for his campaign from other sources. Jones has raised more than $2.5 million.

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