By, Camille Von Kaenel, POLITICO
SACRAMENTO, California — Insurance Commissioner Ricardo Lara approved advocacy group Consumer Watchdog’s status to intervene in rate reviews after an unprecedented back-and-forth with insurance companies critical of the group.
In the finding published Friday (opens in new tab), Lara granted Consumer Watchdog eligibility to participate in rate —reviews and get compensated for it until July 12, 2026 — but not without also taking some swipes at the group, which he criticized as not providing enough information about its own impact.
Why this matters: The move comes as state regulators are weighing faster rate increases to keep insurers from fleeing fire-prone areas. Consumer Watchdog, a firebrand group that sponsored Prop. 103, the 1988 ballot initiative requiring state approval of property and casualty insurance rates, is often the only advocacy group (opens in new tab)participating in the proceedings.
If the Insurance Department had determined Consumer Watchdog ineligible as an intervenor, it would have effectively neutered the group, which received 96 percent of the fees the Insurance Department paid to intervenors last year, adding up to over $21 million for the group since 1988.
What happened: Lara encouraged insurers to comment on Consumer Watchdog’s request for eligibility in June, an unprecedented move (opens in new tab) for a usually pro-forma process that a spokesperson attributed to increased transparency as part of its reform package.
On Friday, Lara wrote that Consumer Watchdog met the minimum requirements. But he also echoed many of the insurance companies’ complaints about Consumer Watchdog, questioning how the group could represent consumers since it has no members and pointing out that it gets the most intervenor fees of any intervenor.
He also criticized Consumer Watchdog’s initial June 3 request to be found eligible as lacking specificity and clarity and said he expected more descriptions in the future.
“Even with the additional information, it is unclear what work Consumer Watchdog actually performed in the rate application process versus that of the Department,” wrote Lara in the finding.
Reaction: Jamie Court, the president and CEO of Consumer Watchdog, called the tone of the finding hostile even though he was pleased with the final determination.
“It should have happened anyway,” said Court of the finding. “We should be fighting with companies, not the Insurance Commissioner. … It portends even more fights.”
What next: Consumer Watchdog is currently involved in several rate cases (opens in new tab), including one in which it has asked for a hearing on a State Farm request to increase rates 23 percent.
