Los Angeles, CA – A broad statewide coalition of 32 consumer protection, labor, senior, immigrant, low-income, and public advocacy organizations urged Insurance Commissioner Ricardo Lara to withdraw proposed regulations that would significantly restrict independent public participation in insurance rate proceedings.
The coalition warned that the draft rules would effectively eliminate consumer challenges to rate increases under 7%. More than half of the more than $6 billion saved in Consumer Watchdog’s rate challenges came from cases where the proposed increase was less than 7%.
The proposed rules also gives the Commissioner broad discretion to deny compensation to consumer intervenors in other cases — undermining the independent oversight system established by Proposition 103 in 1988. That system recently produced a landmark result. Consumer Watchdog’s intervention in State Farm’s pending rate cases resulted in a settlement that is expected to save California policyholders approximately $530 million compared with the insurer’s original requests.
The coalition formally urged the Commissioner to withdraw the proposal in a letter (opens in new tab) filed March 2:
“Californians have experienced skyrocketing premium rates in automobile, homeowner’s, renter’s, condominium owners, and other lines of personal property and casualty insurance. Consumer participation through intervention in the California ratemaking process provides an effective check on the power of the insurance industry even though it is only used in a tiny fraction of rate filings. The proposed Reg-2025-00006 as amended would undermine effective consumer representation in insurance rate setting and other matters, adversely affect policyholders, and violate the language and intent of Proposition 103.”
The Commissioner’s proposal targets one of the most effective and unique provisions of Proposition 103, the 1988 insurance reform law. 103 empowers Californians to hire their own lawyers, actuaries and other experts to scrutinize and challenge an insurance company when it seeks the insurance commissioner’s approval for an increase in home, auto, or business premiums, or when a company engages in unlawful practices. Insurers are required to compensate consumer groups for their reasonable legal expenses if they make a substantial contribution in that challenge.
New Regulations Would Significantly Restrict Public Participation
The Insurance Commissioner first proposed the regulation last November and revised them last month. According to the coalition, the February 13 amendments contain vague and ambiguous language that would limit public participation in multiple ways:
- Eliminating consumer protection challenges to rate increases under 7%.
The amended regulation appears to redefine intervention in a way that would prevent consumer protection challenges to home, auto, and business insurance rate increases below 7%, allowing insurers to repeatedly file 6.9% increases indefinitely (which would compound) without any meaningful public scrutiny. - Allowing retroactive denial of consumer protection compensation.
After consumer protection advocates advance their own funds to invest months of complex legal and actuarial work to protect policyholders, the Commissioner could deny compensation based on vague standards he applied after the work is complete — including determinations that the work was not “material,” addressed topics the Department disagreed with or chose not to pursue, duplicated staff work even when independently developed, or was unnecessary “for any other reason.” - Limiting legal arguments and actuarial analysis through compensation decisions.
The regulation would allow the Commissioner to limit the issues raised in consumer protection proceedings by denying compensation because he disagrees with the consumer advocate’s arguments or analysis. - Retroactively undermining consumer standing.
The proposal would permit the Commissioner to decide after the fact that a consumer organization does not “represent the interests of consumers” in a particular case, undermining predictable and stable consumer protection participation. - Denying compensation for defending consumer protection work.
Advocates could be denied compensation for time spent responding to insurer efforts to block payment or for preparing and defending their compensation requests — work that is integral to enforcing consumer protection rights. - Removing independent review from consumer protection decisions.
The amendments would bar independent administrative law judges from reviewing compensation requests and instead concentrate that authority within the Commissioner’s office, reducing an important structural safeguard against politically-motivated bias in consumer protection proceedings.
Independent Consumer Voice Is a Structural Safeguard
Proposition 103 was deliberately structured to separate the regulator from independent consumer protection advocates. The Insurance Commissioner decides rate applications; independent advocates build the evidentiary record, present actuarial analysis, and test insurer claims. That separation promotes transparency and strengthens public confidence in insurance decisions.
The system has produced measurable consumer protection benefits. Independent interventions have helped reduce or block excessive rate increases, saving California policyholders more than $6 billion over the past two decades. By contrast, rate filings that proceed without meaningful public scrutiny frequently result in significantly higher approved increases. Weakening compensation standards risks undermining this proven safeguard at a time when premiums are already rising.
The coalition has urged the Commissioner to withdraw REG-2025-00006 and preserve the independent consumer participation framework voters established in Proposition 103. At a time when Californians are already facing significant premium increases, weakening the compensation standards that make independent intervention financially viable would remove an important check on insurer rate requests and leave policyholders with less protection, not more.
The letter is signed by the following consumer protection and public interest leaders and organizations:
- Dolores Huerta, President, Dolores Huerta Foundation
- Rosemary Shahan, President, Consumers for Auto Reliability and Safety
- Robert Herrell, Executive Director, Consumer Federation of California
- Matt Broad, Legislative Advocate, Teamsters California
- Noe Páramo, Legislative Advocate, California Rural Legal Assistance Foundation
- Chuck Bell, Programs Director, Advocacy, Consumer Reports
- Hene Kelly, Legislative Director, California Alliance for Retired Americans
- Ruth Susswein, Director of Consumer Protection, Consumer Action
- Douglas Heller, Director of Insurance, Consumer Federation of America
- Mark Toney, Executive Director, TURN – The Utility Reform Network
- Amy Bach, Executive Director, United Policyholders
- Carmen Comsti, Director of Government Relations, California Nurses Association
- Nancy Drabble, Executive Director, Consumer Attorneys of California
- Carly Fabian, Senior Insurance Policy Advocate, Public Citizen
- Arthur Levy, Director of Litigation, Housing and Economic Rights Advocates
- Sal Rosselli, President Emeritus, National Union of Healthcare Workers
- Joy Chen, Executive Director, Eaton Fire Survivors Network
- Michael Lighty, President, Healthy California NOW
- Matt Broad, Legislative Advocate, California Conference of Machinists
- Brian Brosnahan, President, Life Insurance Consumer Advocacy Center
- Kevin Stein, Chief of Legal and Strategy, Rise Economy
- Edward Lopez, Executive Director, Utility Consumers’ Action Network
- Charles Langley, Executive Director, Public Watchdogs
- Chelsea Kirk, Director of Policy and Advocacy, Strategic Actions for a Just Economy
- Caitlin Chan, Executive Director, Legal Assistance for Seniors
- Judy Yee, Legislative Advocate, State Building and Construction Trades Council
- Harvey Rosenfield, Consumer Watchdog
- Stephanie Carroll, Managing Attorney, Public Counsel
- Richard Marcantonio, Managing Attorney, Public Advocates, Inc.
- Malinda Dickenson, Legal & Executive Director, The Protect Our Communities Foundation
- Ted Mermin, Director, CA Low Income Consumer Coalition
- Amber Parrish, Executive Director, UFCW Western States Council
Read the latest coalition letter. (opens in new tab)
Read Consumer Watchdog’s analysis of Lara’s latest plan (opens in new tab), and Consumer Watchdog’s November 19, 2025 comments (opens in new tab). Read Consumer Federation of California Education Fund’s November 19, 2025 comments.
Read Commissioner Lara’s press release (opens in new tab) announcing the latest version if his proposed regulations.
Read Consumer Watchdog’s Announcement (opens in new tab) of Settlement with State Farm.
