NEWS ANALYSIS : Successful Deal Would Boost Garamendi’s Image

For John Garamendi, the agreement by French investors to take over Executive Life Insurance Co., if it works out to the benefit of policyholders, could represent his biggest success yet in seven busy months in the insurance commissioner’s office.

The deal is the latest example of how the 46-year-old Garamendi has moved so fast that his critics have scarcely been able to take aim at him. But there still are risks, and if the deal backfires, Garamendi’s critics could have a field day.

The reaction of some insurance industry insiders to the Executive Life news Wednesday was cautious and hesitant. “It’s too early to say that this deal will fly,” explained one. “It’s a real rough row to hoe. There are some excluded coverages, municipalities that stand to lose , and they may try to block the deal.”

But, in the next breath, he acknowledged, “Even so, it makes good publicity for Garamendi.”

Garamendi was in New York most of last week, without public announcement, to negotiate the Executive Life deal. Only a couple of aides whispered that he was out of state. Then on Monday he convened, again without announcement, representatives of the big special interests in auto insurance to try to fashion a low-cost insurance compromise that has eluded legislators for years.

The Executive Life negotiations took three months and at least three East Coast trips, and Garamendi indicated Wednesday that it might only be the prelude to other, better bids for the company. The Monday auto insurance meeting of 35 insurers, trial lawyers, doctors and others in the commissioner’s Sacramento office was viewed as only the first. Another is scheduled Monday.

In another week or so, Garamendi will announce new regulations for implementing long-delayed Proposition 103 rollback rebates. Much of the work has been done with extraordinarily little publicity or press examination.

“We said very clearly in the first day in office that we would create the best consumer-protection agency in America,” Garamendi said Wednesday. “This field needs a lot of plowing. . . . I don’t like to mess around. We’ve got the priorities in order; we’re going for them. We’re not there yet, but we’re making progress.”

Garamendi’s activism is a marked contrast with his appointed predecessor, Republican Roxanie Gillespie, and it inevitably leads to speculation that Garamendi, a Democrat, aspires to the governorship. After all, he ran for it once before.

Traditionally, those who have become governor of California have often made their first major political marks while serving in the state constitutional offices.

Earl Warren did as attorney general, Pat Brown as attorney general, Jerry Brown as secretary of state, George Deukmejian as attorney general, and Garamendi seems to be trying to follow their example as the state’s first elected insurance commissioner.

By creating the impression that he is a man of action, Garamendi has projected himself ever more prominently into possible gubernatorial contention in 1994, or if he decides Republican Gov. Pete Wilson is impregnable that year, in 1998.

Garamendi’s Republican opponent in last year’s election, Wes Bannister, observed of him Wednesday: “He’s in the paper every day. Tuesday, it was holding a health insurance hearing. It may not have been that consequential, but it sounded good. Wednesday, it is Executive Life. Tomorrow, it will be something else.

“Believe it or not, I think he’s doing a relatively good job. He’s stirring the waters enough so I think some change will come.”

As actions are announced, Garamendi is in a position to reap the maximum publicity and political capital. And he is working on so many things at once that the announcements are quite frequent. Bannister was exaggerating when he said Garamendi was in the newspaper every day, but not by much.

Asked Wednesday about his future, the commissioner said, with a customary shot of caustic humor:

“I’m definitely not a candidate for Pope. I intend to be the best insurance commissioner that California has ever had. That’s what my focus is. If I do a decent job here, I expect there will be other opportunities in the future. But I have no timetable.”

$3-BILLION DEAL FOR EXECUTIVE LIFE INSURANCE CO.

State insurance regulators signed an agreement to sell the firm to a French consortium. A1

WHO’S BUYING THE AILING INSURER

A look at MAAF and Altus Finance, the French firms rescuing Executive Life. D7