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A Closer Look at Commissioner Lara’s First Wave of Proposed Regulatory Reforms

  • Post category:Advocacy

The California Department of Insurance (Department) recently unveiled proposed amendments to require “complete property and casualty rate applications.”  As producers remain wholly without adequate market access with which to serve California consumers, we are left to wonder if the Department truly understands the significant consumer harm resulting from inadequate home and auto insurance market access.  These new proposed regulations are separate and apart from regulations the Department should be urgently promulgating to increase insurer appetite, by permitting the expensing of reinsurance costs and the use of modeling in wildfire rate filings.  It boggles the mind that there is no sense of urgency whatsoever from the Department to timely deliver the reinsurance and modeling regulations.

Furthermore, we remain suspicious about the need for and motives of the Department regarding the introduction of these complete application regulations.  Naturally, few would dispute the need for complete applications, but one does wonder about the timing, and just how the Department has been operating since the passage of Proposition 103 in 1988 with incomplete applications, if this is indeed the case.  This appears more likely to be an effort by bureaucrats in the Department to give themselves more leverage over insurers in the ratemaking process, which is the exact opposite of what the Department should be doing if it wants more insurers to increase their appetite for business.  To be clear, the Department should modernize and make more efficient the rate filing and approval process, but the timing of these complete application regulations seems misguided if we want insurers to increase their appetite as soon as possible.

The Alliance will continue to monitor these developments closely, advocating for measures that promote insurer appetite and efficient market access for California consumers.

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