California Insurance Commissioner Introduces New Regulations for Intervenor Reform
California Insurance Commissioner Ricardo Lara is advocating for a significant change to the state’s long-standing intervenor regulations, which allow various groups to participate in rate hearings. This initiative aims to enhance transparency, improve efficiency, and ensure that funds utilized in the rate review process align with the public interest.
On Friday, Lara unveiled the amended text of proposed regulations concerning the intervenor and Administrative Hearing Bureau processes under Proposition 103. These reforms are designed to modernize the existing framework and address the evolving needs of California’s insurance landscape.
Related: California Bill Would Require Insurer Claims Handling Plans, and Double Penalties
In light of the increasing challenges posed by wildfires, Lara has also proposed several changes to state insurance laws. These changes aim to encourage insurance carriers to resume offering homeowners insurance in high-risk areas of the state.
One notable participant in the intervenor hearings is Consumer Watchdog. According to data released by the California Department of Insurance in January, Consumer Watchdog earned $1.4 million in fees last year from a program that compensates individuals and advocates for their participation in rate hearings.
The intervenor program has faced scrutiny, particularly as insurance carriers have begun to withdraw from the state. Last year, Commissioner Lara proposed modernizing the program to diversify the recipients of intervenor funds, which are governed by Proposition 103.
Related: ‘Structural Shift’ Occurring in California Surplus Lines
Consumer Watchdog has been approached for comments regarding the latest developments. Following Lara’s proposal in January, the organization stated that the compensation they received last year was for efforts challenging excessive rates dating back to 2021. This included payments for 14 rate challenges that had been delayed but were finally approved in May.
The difficulty in securing payment for intervening has been identified as a primary barrier for organizations wishing to participate in the program. Consumer Watchdog expressed concerns that Lara’s proposed changes could undermine the public’s ability to scrutinize and challenge unjustified rates, potentially derailing the participatory process established by Proposition 103.
The amended text reflects months of engagement with stakeholders and public input, according to the California Department of Insurance (CDI). After reviewing feedback from consumer advocates, insurers, legal experts, and the public, the department made revisions to address various legal and constitutional concerns.
The amended text is now available for an additional 15-day public comment period, allowing for further input from interested parties.
The updated regulations include:
- Clarification of prospective application, ensuring new rules apply moving forward.
- Replacement of the previous “vexatious” standard with an objective “wasteful” standard for fee determinations, focusing on whether the work advances the issues in a proceeding.
- Strengthening scrutiny of excessive billing on a task-by-task basis.
- Increasing public access to rate proceeding documents by mandating timely online posting of pleadings, hearing calendars, and decisions.
- Establishing firm timelines and regular status updates from administrative law judges.
- Clarifying definitions and procedural rules to streamline hearings.
These reforms are part of Lara’s Sustainable Insurance Strategy, which aims to stabilize California’s insurance market.
Topics
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Legislation
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California Insurance Commissioner Ricardo Lara is advocating for a significant change to the state’s long-standing intervenor regulations, which allow various groups to participate in rate hearings. This initiative aims to enhance transparency, improve efficiency, and ensure that funds utilized in the rate review process align with the public interest.
On Friday, Lara unveiled the amended text of proposed regulations concerning the intervenor and Administrative Hearing Bureau processes under Proposition 103. These reforms are designed to modernize the existing framework and address the evolving needs of California’s insurance landscape.
Related: California Bill Would Require Insurer Claims Handling Plans, and Double Penalties
In light of the increasing challenges posed by wildfires, Lara has also proposed several changes to state insurance laws. These changes aim to encourage insurance carriers to resume offering homeowners insurance in high-risk areas of the state.
One notable participant in the intervenor hearings is Consumer Watchdog. According to data released by the California Department of Insurance in January, Consumer Watchdog earned $1.4 million in fees last year from a program that compensates individuals and advocates for their participation in rate hearings.
The intervenor program has faced scrutiny, particularly as insurance carriers have begun to withdraw from the state. Last year, Commissioner Lara proposed modernizing the program to diversify the recipients of intervenor funds, which are governed by Proposition 103.
Related: ‘Structural Shift’ Occurring in California Surplus Lines
Consumer Watchdog has been approached for comments regarding the latest developments. Following Lara’s proposal in January, the organization stated that the compensation they received last year was for efforts challenging excessive rates dating back to 2021. This included payments for 14 rate challenges that had been delayed but were finally approved in May.
The difficulty in securing payment for intervening has been identified as a primary barrier for organizations wishing to participate in the program. Consumer Watchdog expressed concerns that Lara’s proposed changes could undermine the public’s ability to scrutinize and challenge unjustified rates, potentially derailing the participatory process established by Proposition 103.
The amended text reflects months of engagement with stakeholders and public input, according to the California Department of Insurance (CDI). After reviewing feedback from consumer advocates, insurers, legal experts, and the public, the department made revisions to address various legal and constitutional concerns.
The amended text is now available for an additional 15-day public comment period, allowing for further input from interested parties.
The updated regulations include:
- Clarification of prospective application, ensuring new rules apply moving forward.
- Replacement of the previous “vexatious” standard with an objective “wasteful” standard for fee determinations, focusing on whether the work advances the issues in a proceeding.
- Strengthening scrutiny of excessive billing on a task-by-task basis.
- Increasing public access to rate proceeding documents by mandating timely online posting of pleadings, hearing calendars, and decisions.
- Establishing firm timelines and regular status updates from administrative law judges.
- Clarifying definitions and procedural rules to streamline hearings.
These reforms are part of Lara’s Sustainable Insurance Strategy, which aims to stabilize California’s insurance market.
Topics
California
Legislation
Interested in Legislation?
Get automatic alerts for this topic.
