By Camille Van Kaenel, POLITICO
Insurance Commissioner Ricardo Lara expedited delayed payments to consumer advocates on Tuesday, escalating a power struggle within his own agency as he tries to entice insurers back to the state’s disaster-prone market.
What happened: Lara told the Insurance Department’s chief administrative law judge, Kristin Rosi, in a letter (opens in new tab) that he was immediately granting 19 outstanding requests for compensation from Consumer Watchdog and the Consumer Federation of America for their participation in rate reviews. The requests were pending before the judge, and some had surpassed the 90-day deadline outlined in the insurance code.
Why it matters: Lara is nearing the end of a series of reforms aimed at making it easier for property insurers to do business in California so they will return to the state and cover homeowners in fire-prone areas.
His efforts to speed rate reviews have run into internal opposition and he’s been sparring with Rosi over jurisdiction since she issued a ruling in October seeking more authority over rate hike approvals, which Lara later struck out (opens in new tab). Lara also ordered her to cancel a December hearing related to the ruling, but she held it anyway. The fight has alarmed (opens in new tab) some administrative law experts who say it could politicize agency procedures.
Lara has long feuded with Consumer Watchdog, which has called Lara too friendly with the industry, but extended the olive branch yesterday to show he wants to streamline his agency’s process for all parties. Lara called the delays “unacceptable” in his letter.
“It has been my goal to ensure that all parties — insurers, intervenors, and the Department — are accountable for meeting deadlines set forth under applicable statutes and regulations,” he wrote.
He also argued he had the power to make the decision, despite it usually being the judge’s job.
“I am exercising my authority… as the head of the California Department of Insurance — elected twice to this statewide position by California’s voters,” he wrote.
Consumer Watchdog CEO Jamie Court said he sees the move as an escalation in an ongoing power struggle between Lara and his administrative law judges.
“We’d like to be paid quicker, don’t get me wrong, but we’d also like to see an impartial decision,” said Court.
What’s next: The dispute will continue to unspool next year, when Lara’s rules allowing property insurers to use forward-looking models in their rate-setting and pass along the cost of reinsurance will come into effect and Consumer Watchdog is likely to request hearings on some of the insurers’ subsequent rate hike requests.
