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He claims to have saved California homeowners billions. The insurance industry hates him

Sam Dean, Los Angeles Times on

Published in Business News

When groups such as Consumer Watchdog intervene, Proposition 103 stipulates that they can get paid for their efforts. After paying the intervening groups, insurance companies wind up passing those fees along to consumers. Insurance companies argue that this provides Consumer Watchdog and others a perverse incentive to turn every rate filing into a battle in order to get paid their fees.

"No other state has this kind of public participation and scrutiny built into the regulatory process, which is why Prop 103 is their number one target," Rosenfield said. "It drives them nuts."

"It comes down to the money, right?" said Carmen Balber, Consumer Watchdog's executive director. "Thanks to the intervenor process, consumers pay less for their home and auto insurance than they would otherwise, and the industry has sought to claw back those profits for decades now."

There has been friction between the insurance industry and consumer groups for decades, but things have recently started to boil over.

The American Property Casualty Insurance Assn., the nation's largest insurance lobbying group, bankrolled a new website attacking Consumer Watchdog in late 2023. Spokespeople for the Insurance Information Institute and the Personal Insurance Federation of California regularly opine to reporters that Rosenfield, Balber and the group's president, Jamie Court, are wrenches in the underwriting machinery.

"The industry is going after Consumer Watchdog harder than normal," said Brian Sullivan, owner and editor of insurance industry publication Risk Information. And the feud between the group and the Department of Insurance keeps escalating. "I have never seen the relationship degrade to the point it's at now," Sullivan said.

 

The industry groups have been pushing for changes in Sacramento and at the Department of Insurance — and at the close of last year's legislative session, saw some results in the forms of promises to loosen regulations.

Lara, the state's insurance commissioner, has had a rocky relationship with Consumer Watchdog from the start. After he pledged to not accept campaign funds from insurers in his first run for the office in 2018, a San Diego Union-Tribune investigation revealed that Lara had accepted hundreds of thousands of dollars in campaign contributions from people and companies with ties to the insurance industry. Consumer Watchdog filed a public records request for communications between Lara's department and the insurance companies linked to the donations, and then sued the commissioner for allegedly failing to respond to the request in full. The group lost its initial lawsuit, but is continuing to fight it in the state Courts of Appeal.

Since then, the group has accused Lara's office of ramming through rate increases without adequate review or opportunity for public input, and called his plans to change regulations with the goal of bringing more insurers back to the state market a "sham."

Lara, in turn, noted in a news conference announcing his proposed reforms that "bombastic statements from entrenched interest groups" help no one, and that "one entity can unreasonably prolong rate filings" while "materially benefiting from a process that is meant for broader public participation."

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