Judge rejects effort to halt release of market exams

SACRAMENTO - A judge on Friday called legislative conduct improper but rejected Commissioner Charles Quackenbush's attempt to force the Senate to remove sensitive audit summaries posted on a subcommittee Web site.

Superior Court Judge Joe S. Gray said constitutional safeguards for the separation of powers precluded him from acting against the Senate for releasing the audits, called market conduct exams.

''Even though the conduct is improper, I cannot enjoin it,'' Gray said.

The Legislature's lawyers said forcing the Senate to remove the summaries from the Web site and retrieve copies that had been distributed earlier in the week interfered with lawmakers' legitimate right to communicate with the public and ride herd on public agencies.

''It (the Legislature) makes available an incredible amount of information because it wants public comment,'' said Legislative Counsel Bion Gregory.

The documents were posted earlier this week by a Senate subcommittee looking into allegations of insurer misconduct.

The Department of Insurance, joined by two insurance trade associations, among others, said the market conduct exams contained confidential information that would pose an invasion of privacy if released to the public.

They also noted that insurers would be suspicious of future exams if they believed the information ultimately would be made public.

''We're going to have trench warfare every time we do a market conduct exam,'' said attorney Rich Robinson, representing the Insurance Department.

The summaries are parts of exams, compiled by Insurance Department auditors, that include hundreds of alleged claims-handling violations of several companies stemming from the 1994 Northridge earthquake.

The exams have assumed a significant role in the deepening political scandal surrounding Quackenbush.

The audits suggested potential fines against the companies of up to $3.7 billion. Quackenbush allowed the insurers to resolve the complaints by contributing a far smaller amount - $12 million - to a nonprofit fund designed to provide money for consumer assistance and quake research.

Much of the money however, was spent on public service advertising and other programs that politically benefited the commissioner, prompting investigations of Quackenbush's activities.

Quackenbush is scheduled to appear on June 26 before the Assembly Insurance Committee, which is investigating the commissioner and his settlements with insurers. He originally had been scheduled to appear Monday, but the date was pushed back because of pending action on the state budget.