California Insurance Commissioner Attempts to Limit Consumer Voices in Statewide Insurance Rate Hikes
WASHINGTON — California Insurance Commissioner Ricardo Lara has proposed changing the rules that govern the intervenor compensation regulations, making it more difficult for consumer advocates to be compensated when they intervene in insurance rate hikes. The move would discourage intervenors from participating in the public process of approving insurance rate hikes in California. In response, Carly Fabian, senior insurance policy advocate with Public Citizen’s Climate Program, issued the following statement:
“Attacking California’s public intervenor program is a short-sighted attempt to scapegoat consumer advocates for what is clearly a national crisis. Allowing insurers to raise rates with no public oversight is a recipe for chaos, not a serious strategy for confronting the cost of climate change. Adapting insurance systems to climate risk is essential, but that doesn’t mean shutting out the public.
“California should be learning from states like Illinois—the poster-child for “let the market decide” approach to insurance costs. This year, Illinois homeowners are now facing 27% premium hikes from State Farm. Either the insurance industry is gouging ratepayers, or insurance companies have been continually underestimating the risks of climate change. Regardless, it is a failure that demands more scrutiny, not less.
“Public intervenor programs are one of the few tools we have to hold powerful industries accountable for essential services like insurance and energy. They have proven their value across the country, particularly in keeping utility prices in check. As the private market runs away from risks, this is the time to strengthen, not dismantle, these programs. Compensating intervenors is one the best and most cost-effective ways to do that.
“California’s recent move to create a public wildfire model is a great example of the kind of forward-looking, climate-informed approach the state should take. California shouldn’t throw the baby out of the bath water in an attempt to appease an industry that is making no commitments to stay in the state.”
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