California Insurance Commissioner John Garamendi declined todisclose the outcome of a review by the state attorney general ofalleged blackmail threats by five of the state's auto insurers.

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“We are still in discussions with the attorney general andcannot comment on these talks now,” said Norman Williams, aspokesperson for Commissioner Garamendi.

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But Tom Dresslar, spokesperson for Attorney General BillLockyer, said his department had forwarded the conclusions of areview of the charges to the commissioner's office.

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He expressed surprise when told about the purported ongoingdiscussions and said the commissioner's office was free to disclosethe findings of the review.

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Mr. Garamendi has charged that plans by five autoinsurers–Allstate, State Farm, Safeco, Farmers and 21st Century–tofund a $2.4 million television advertising campaign against hisproposal to revise auto rating criteria were intended to derail hisrace for the Democratic nomination for lieutenant governor in theJune primary. He said that he was approached by an insuranceindustry representative through a political consultant who said thead campaign would be dropped if he withdrew his auto ratingproposal.

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The ads, which started airing this week, are aimed at persuadingnon-urban Californians that Commissioner Garamendi's auto rateregulation reforms would unfairly hit them in the pocketbook. Themeasure would lessen the effect of territory on a driver's rate,which property-casualty industry advocates fear will result inurban motorists being subsidized by rural drivers.

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In addition to the state attorney general, Mr. Garamendirequested the Federal Bureau of Investigation and the U.S.Attorney's Office look into the charges.

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“The insurance industry will use any means necessary–from TV adsto extortion–to stop pricing reforms for good drivers, and thiscampaign should be seen for what it is: a big lie meant to misleadCalifornians about the impact of Garamendi's reforms,” saidconsumer advocate Douglas Heller, executive director of the SantaMonica-based Foundation for Taxpayer and Consumer Rights.

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The new Garamendi rules will still allow insurers to considergeography in setting premiums, but will require factors related toa motorist's driving record to be most important, Mr. Hellersaid.

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