Walters: California’s insurance commissioner targets Consumer Watchdog fees

The horrific string of wildfires that has plagued California in new years taking dozens of lives and destroying several billions of dollars in property also created a situation in property insurance A few insurers have abandoned California altogether a few have refused to take more clients plenty of have sought premium increases and the state s insurer-of-last-resort the FAIR plan has seen so much new business that its long-term solvency is in doubt Meanwhile fire casualties often complain that insurers and their adjusters are low-balling settlement offers Obviously California s property insurance sphere demands reorganization of several kind to improve its viability but it s an infinitely complex m lange of financial risks and rewards truly understood by only a limited experts Related Articles Kaiser Permanente Northern California earns top state national ratings Major California wellbeing insurers side with Newsom and healthcare groups to cover COVID shots Without insurance immigrant patients may face unregulated therapeutic deportation California s FAIR Plan would face more scrutiny under bill heading to Newsom s desk Fighting a robustness insurance denial Here are tips to help Ricardo Lara a former state legislator happened to be California s elected insurance commissioner when the dilemma hit home so by default he had to develop a response while simultaneously fielding complaints from casualties and dealing with insurers demand for premium increases to cover mounting losses Lara has proposed a major overhaul in how insurers calculate their feasible losses seeking premium adjustments and a shift from using only past experience to projecting future losses which is called catastrophe modeling It is necessary he commented to persuade insurers to keep writing policies in California and stave off a collapse of the sector The proposal has heightened Lara s feud with Consumer Watchdog which began even before his balloting The organization had sponsored the ballot measure that converted the insurance commissioner s position from an appointed job to an elected post and laid down a new set of rules for regulating premiums Thereafter Consumer Watchdog enjoyed close relationships with elected commissioners and was awarded a multitude of millions of dollars in intervenor fees for participating in premium-setting cases in the Department of Insurance The nonprofit organization contends that its participation has saved consumers a great number of more dollars than it has collected in fees From the onset of Lara s bid for the office Consumer Watchdog was critical of him alleging he was too friendly with insurers When Lara unveiled his overhaul of the premium setting process adopting an approach insurers supported the feud escalated Nevertheless throughout Lara s tenure Consumer Watchdog has continued to receive large intervenor fees paid by insurers However that may not be true in the future Last week Lara proposed another procedural overhaul this time changing how intervenor fees are calculated and awarded saying these reforms will for the first time protect consumers from hidden fees establish clear guidelines for intervenor participation and strengthen oversight of the administrative hearing system to prevent unnecessary delays Lara s proposal includes redefining the substantial contribution standard for awarding intervenor fees requiring more community reportage of intervenor exercises and compensation requiring authorities who preside over rate cases to file regular reports on pending cases and requiring the Department of Insurance to post rate situation documents online The proposal s substantial contribution element is the one that could affect Consumer Watchdog s finances Lara left no doubt it is aimed at the organization Lara described the current process created by the first elected commissioner John Garamendi in the early s as lacking transparency and dominated by a small number of recurring participants To punctuate that characterization Lara disclosed a list of rate cases this year of which resulted in nearly million in intervenor fees for Consumer Watchdog Consumer Watchdog not surprisingly opposes Lara s new rules If the goal of Insurance Commissioner Ricardo Lara s new intervenor compensation regulations is to bring in new intervenors into the process his regulations will do the opposite Jamie Court president of Consumer Watchdog reported in a announcement By making it harder for intervenors to be paid he will discourage intervenors from participating Thus the feud already six years old will continue at least until term limits end Lara s tenure and another commissioner is elected next year Dan Walters is a CalMatters columnist