By Laurence Darmiento, LOS ANGELES TIMES
One hallmark of the 1988 ballot measure that governs California’s auto and home insurance code allows the public to review insurer requests for rate increases — and get paid by those same insurers for the costs of doing so.
It’s a provision that has irked the industry ever since the measure, Proposition 103, also established an elected insurance commissioner with the authority over rates.
Now, current Commissioner Ricardo Lara wants to more tightly regulate the process and make it harder for so-called “intervenors” to get reimbursed for their work.
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The group founded by Harvey Rosenfield, author of Proposition 103, has defended itself, saying Lara’s proposal is a giveaway to the insurance industry.
“Lara has no reason to change the intervenor compensation standard except to get insurance companies unjustified rate hikes quicker and as revenge against his critics,” Jamie Court, president of Consumer Watchdog, said in a statement.
The industry supports the changes, echoing similar arguments to Lara’s.
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Consumer Watchdog by its own calculations has received $14.2 million in fees from 2002 to 2024 for the cost of hiring attorneys, actuaries and other experts who can go toe-to-toe with insurers seeking to justify their proposed rate increases.
The group claims it has saved consumers $6.54 billion during that period in premium hikes largely sought by home and auto insurers, and that its fees amount to 25 cents for every dollar saved.
Consumer Watchdog says Lara approved 97% of what insurers requested in rate increases from January 2022 to October 2023 without a public intervenor, but when the group intervened home insurers got 62% and auto insurers, 71% of what they wanted during that period.
The group also says it intervened in a request by State Farm General, the state’s largest home insurer, for an emergency 22% rate hike this year after the January fires, resulting in the company trimming it to 17%, and that it has saved consumers $166 million.