Members of California Congressional Delegation Call out Insurance Commissioner’s Proposal to Protect Consumers
Representatives John Garamendi, Zoe Lofgren and other members of California’s congressional delegation sent a letter to California Insurance Commissioner Ricardo Lara urging him to use his power under state law to stabilize the insurance market and protect consumers.
The letter responds to Lara’s recent announcements, including his proposed Sustainable Insurance Strategy, which the signatories say could diminish the insurance commissioner’s regulatory power, as well as other proposals that could threaten the consumer protections established in Proposition 103.
Garamendi served as the state’s insurance commissioner from 1991 to 1995 and again from 2003 until 2007 before he was elected lieutenant governor of California.
“We write regarding your recently announced Sustainable Insurance Strategy,” the letter states. “In short, California’s present insurance market is in chaos. Across the state, major insurance companies are canceling policies, denying coverage, and dramatically raising insurance rates for homeowners and other consumers.”
The letter asserts that under Prop. 103 the state’s insurance commissioner has power to stabilize the statewide insurance market and it urges Lara to use that power to immediately review proposed rate increases “under any new risk modeling to determine if they are necessary, adequate, and not excessive for consumers. We also believe it would be beneficial to use that power to require that the insurance industry provides adequate, affordable coverage in every part of the state.”
It argues that Lara’s proposed Sustainable Insurance Strategy seems to suggest dramatic changes to the commissioner’s regulatory power “that may result in a diminution of the authority granted by California voters and your ability to create a stable insurance market in our state.”
Proposals like using proprietary forward-predicting models, expediting rate reviews that limit public comment, allowing insurance companies to abandon certain regions of the state, and incorporating reinsurance costs into Californian rates could threaten consumer protections established in Prop 103, the letter continues.
Source: https://www.insurancejournal.com
