Rules could drive consumer advocates from rate proceedings despite producing more than $6 billion in documented policyholder savings at a cost of less than 25 cents for every $100 saved.
LOS ANGELES, CA — Consumer Watchdog today warned that Insurance Commissioner Ricardo Lara’s new intervenor regulations threaten the public-participation rights California voters enacted through Proposition 103. The rules give the commissioner broad discretion to deny compensation after consumer advocates have completed costly legal and actuarial work, potentially leaving insurance companies unopposed in proceedings that determine what Californians pay for coverage.
“Proposition 103 gives Californians rights to participate in insurance ratemaking, and those rights do not depend on favors from the insurance commissioner,” said Consumer Watchdog Litigation Director Will Pletcher.
Proposition 103 gives Californians rights to participate in insurance rate making and those rights do not depend on favors from the insurance commissioner. It gives every person the right to intervene in Department proceedings, challenge the commissioner’s actions, and enforce the law. It also requires reasonable compensation when a consumer representative makes a substantial contribution to an insurance matter. And it already requires public disclosure of eligibility requests and decisions. The Commissioner’s new rules threaten to turn voter-enacted rights into privileges the commissioner may grant or withhold after the work is done.
“That could make the right to participate practically meaningless,” explained Pletcher. “Consumer advocates must commit thousands in time and expertise to make analyze and understand complex insurer rate applications, without knowing whether the commissioner will later deny reimbursement for vague or subjective reasons. The predictable result will be fewer professional consumer advocates in insurance proceedings, leaving insurers and their armies of lawyers unopposed.”
The danger is not hypothetical. In 2025, the commissioner denied compensation to Consumer Watchdog and the Consumer Federation of California after faulting their ‘adversarial’ and ‘sustained opposition’ to Department policies. The new rules turn that approach into a permanent system, allowing the commissioner to decide after the fact whether consumer advocacy is compensated.
The new rules undermine one of California’s most successful consumer protections. Consumer Watchdog’s interventions saved policyholders more than $6 billion from 2002 through 2024 at a reimbursed cost of less than 25 cents for every $100 saved—a return of approximately 400 to one. Intervention is already rare: CDI approved more than 4,000 filings in 2024 alone, while Consumer Watchdog challenged only about 160 rate applications over the previous 21 years.
The rules are also one-sided. Insurers may spend whatever they choose on attorneys, actuaries, consultants, lobbyists, and executives, with those expenses ultimately borne by policyholders. Consumer representatives face new staffing limits and second-guessing after the work is complete. The regulation even eliminates the existing requirement that an insurer challenging intervenor compensation disclose what it spent in the same proceeding. Insurers can conceal their own costs while attacking the cost of representing consumers.
CDI’s State Farm example proves why intervenors matter. State Farm sought increases of 30% for homeowners, 52% for renters, 36% for condominium owners, and 38% for rental dwellings. Consumer Watchdog’s intervention helped produce final rates of 17% for homeowners — no increase over the emergency rate — an increase of less than one percent for renters, and refunds, with interest, for condo owners and rental dwellings. The settlement saved consumers approximately $492 million (opens in new tab) in additional premiums compared with State Farm’s filed requests. Together with refunds and other benefits—including refunds with 10% interest, limits on block nonrenewals, and additional protections for wildfire survivors—the total consumer impact is approximately $530 million. (opens in new tab)
“The next insurance commissioner must repair these regulations and restore the workable standards that governed consumer participation for decades: predictable compensation for advocacy that substantially contributes to a proceeding, meaningful independent review, prompt and reasoned decisions, and no financial penalty for good faith disagreements with the commissioner on policy,” said Pletcher. “Without those protections, these rules threaten the consumer advocacy rights and public transparency California voters created through Proposition 103 — and leave insurers once again with the room to themselves.”
