The California Department of Insurance (CDI) has postponed its decision on Consumer Watchdog’s biennial recertification, a situation the intervenor has described as unprecedented and Orwellian.
"To delay to invite the insurance industry to comment on whether we represent consumers is shocking," said Consumer Watchdog executive Director Carmen Balber.
CDI spokesperson Gabriel Sanchez said that the department was overdue for an examination of its ratemaking and rate approval process.
“Commissioner (Ricardo) Lara is doing things differently. Under his leadership, the CDI’s experts will not rubber-stamp any part of the rate regulation process,” Sanchez said, according to a report from AM Best.
The department expects to rule on Consumer Watchdog’s recertification on or before Aug. 2. The process allows the group to seek compensation, commonly from carriers. Its certification expired on July 12.
Since its founding by Harvey Rosenfield in 1988, Consumer Watchdog has received tens of millions of dollars from insurers and the CDI. Rosenfield helped craft Proposition 103, which initially rolled back rates and has required the commissioner’s approval prior to implementing rates for decades.
Consumer Watchdog is a key player in an intervenor system that insurance trade group leaders say has lacked transparency, increased costs, and slowed necessary changes.
The CDI and Gov. Gavin Newsom are also working to expedite decisions on rate filings and make other changes to improve conditions in the stressed market.
Balber described the State Farm rate hike request as extraordinary, emphasizing that consumers need a voice at the CDI "now more than ever before as insurance companies refuse to sell in many parts of the state and seek double-digit rate increases everywhere else."
Consumer Watchdog has filed a brief responding to insurance industry comments solicited by the CDI. In 15 rate proceedings concluded in 2023 and 2024, the organization said carriers agreed to lower overall rates than originally requested.
In each case, "the parties expressly agreed that the stipulated rates were supportable and neither excessive nor inadequate under the applicable regulations," Consumer Watchdog stated in the brief.
The organization also noted that it has consistently advocated for companies to make insurance more available by lifting restrictions on new business.
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