Dan Walters: Poizner and Gararmendi square off in possible prelude to 2010

Last week's sharply worded exchange of letters between Republican Insurance Commissioner Steve Poizner and his Democratic predecessor, Lt. Gov. John Garamendi, sounded very much like opening salvos of the 2010 contest for governor.

While there are other potential aspirants for the governorship, few in politics doubt that Poizner, a very wealthy Silicon Valley entrepreneur, and Garamendi, a three-decade veteran of California politics, see themselves as successors to Gov. Arnold Schwarzenegger.

The flashpoint of last week's exchange was a batch of insurance regulations that Poizner posted on the Department of Insurance Web site a week ago, rewriting rules that Garamendi had promulgated in late 2006, just before vacating the office.

Harvey Rosenfield, who wrote the 1988 ballot measure (Proposition 103) that made the insurance commissioner's position elective and gave it more powers, immediately denounced Poizner's emergency rules as "an outrageous giveaway to the insurance industry" that would fatten insurers' profits while raising rates on consumers. One would give the insurance commissioner the power to boost insurers' profit margins by two additional percentage points.

Almost immediately, Garamendi chimed in with a letter to Poizner describing himself as "more than disappointed (and) alarmed that after making such substantial changes to a complex set of regulations, you are proposing that they be hastily adopted as emergency regulations."

"Even without adequate time to completely analyze the impact of these changes, I am certain that you have opened the door to abuse by insurers," Garamendi continued. "Some of your modifications to the prior approval regulations create gaping exceptions that undermine the spirit and the intent of Proposition 103."

Those were fighting words. Poizner responded a day later – last Friday – with an even more barbed letter to Garamendi, terming the lieutenant governor's blast as "a press release written in the first person" and chiding him for "action in ignorance" by denouncing the new rules without thoroughly reading them. Poizner characterized the 2006 rules as "unceremoniously dumped into the Office of Administrative Law" and "not fully baked."

"It is clear that your rush to submit them was more about legacy-building and partisan politics than good public policy," Poizner wrote.

While gubernatorial politics certainly underlie the exchange, so does the ever-evolving relationship between the Department of Insurance and insurers on one hand and consumer activists, allied with trial attorneys, on the other.

Proposition 103 was the survivor of a very expensive, multi-measure battle between the warring factions 20 years ago. The elected insurance commissioner always has found himself in the middle of their ongoing battles. Garamendi aligned himself with Rosenfield and other consumerists and battled incessantly with insurers during his two terms as commissioner, while the Republican who succeeded Garamendi after his first term, Chuck Quackenbush, was much friendlier to the industry before being driven out of office by a fundraising scandal.

Garamendi returned to the office in the 2002 election and resumed his regulation squabbles with insurers, who contended that he was building his political career by unfairly painting them as villains. Poizner was elected in 2006. While his relations with insurers have been friendlier, he's also been a tough regulator on occasion and created a positive image for himself in response to wildfires and other calamities.

Chances are against Garamendi and Poizner facing each other directly in 2010, given the spate of other potential candidates, but it's certainly possible. If it happens, insurance will be one of their issues.

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