Posted on 08/14/2025 11:40:37 AM PDT by Angelino97
A proposed ballot initiative would drastically change the way property insurance is regulated in California by repealing a law voters passed almost four decades ago.
Proposition 103 has regulated home, auto and other types of property and casualty insurance in the state since 1988. It requires insurance companies to seek approval from an elected insurance commissioner to raise their premiums, and allows members of the public to object to rate increases.
The initiative — which experts are calling a long shot — would throw most of that out. It would impose stricter limits on the rate-approval process starting in 2027; the commissioner would be appointed by the governor instead of elected; and the public would no longer be able to intervene in rate filings.
The independent insurance agent who submitted the proposed measure this week, Elizabeth Hammack, wrote that she “has seen first-hand the dysfunction” that Prop. 103 has “wreaked upon our state.” Hammack did not immediately respond to CalMatters’ request for an interview.
Denni Ritter, a vice president for American Property Casualty Insurance Association, said the insurance industry group was not involved in drafting the measure and is “reserving judgment” while reviewing it.
To qualify for the November 2026 ballot, the initiative effort would need to collect more than half a million signatures by April.
If the initiative qualifies for next year’s ballot and is approved by voters, it could also throw a wrench into Insurance Commissioner Ricardo Lara’s plan to try to fix the state’s insurance market as insurers have refused to renew policies or write new ones as wildfire risk has grown.
Lara crafted his plan around the confines of current insurance law while giving the insurance industry certain concessions, such as allowing them to use catastrophe modeling and to factor in their reinsurance costs when setting their rates. In exchange, the insurance department asks that insurers retain or increase their policies in areas considered at high risk for wildfires. The plan’s implementation began this year.
“Prop. 103 guarantees consumers’ right to hold all parties in the ratemaking process accountable,” said Molly Weedn, an external spokesperson for the insurance department, adding that Lara is “opposed to any effort to take away the rights consumers deserve.” As for how the measure would affect Lara’s plan, Weedn said “come back to us with that question if they collect the signatures.”
Consumer Watchdog, the Los Angeles-based advocacy group whose founder wrote Prop. 103 mostly to address rising auto insurance rates, said in a statement that the proposal does not seem to be a “serious” or well-funded campaign. The group also cited a report that found Prop. 103 has saved California drivers more than $150 billion in auto insurance rates over the years, as well as a poll that found consumers blame insurance companies for rising premiums.
“We’re confident voters want more accountability from insurance companies,” Carmen Balber, the group’s executive director, told CalMatters. She said repealing Prop. 103 “would mean skyrocketing rates for home and auto insurance policy holders.”
Amy Bach, executive director of San Francisco-based consumer advocacy group United Policyholders, said that while Prop. 103 has “important consumer protections,” the intervenor process has resulted in approval delays — which insurers have long complained about — and political pressure that have contributed to California’s problematic insurance market.
“I don’t give the ballot measure a high degree of success,” Bach said. “People are not happy about escalating premiums.”
But Karl Susman, owner of an insurance agency in Los Angeles, said: “If you ask any homeowner in the state of California, are you happy with the current state of insurance? You know the answer is going to be no. Now we actually will have an option to vote to change that.”
Another consumer advocacy group says Prop. 103 has helped keep California home and auto insurance rates lower than the national average. The state’s average annual homeowners insurance premium falls in the middle of the pack among all U.S. states, according to an analysis by comparison website Bankrate.com.
Consumer Federation of America, a Washington, D.C.-based research and advocacy organization, “has studied state insurance markets for decades, and this initiative would institute the regulatory system used in states that have seen some of the most dramatic rate spikes around the country,” said Douglas Heller, director of insurance for the group.
Heller added that California is not alone in facing an insurance crisis, and that “removing oversight of the insurance companies at this moment would be like shutting down the fire department in the middle of a blaze.”
Ratemaking process = Because We Said So
Nobody wants to pay the price of the regulations. A commissioner is just going to deny rate increases and insurers will leave and/or not write new business. The next step will be a government insurer who doesn’t charge enough and runs out of money that will be made up with taxes.
But will California voters approve it?
What happens if the commissioner, appointed by the governor, doesn’t approve needed rate increases?
Kind of like appointed judges (especially with lifetime tenure) are supposed to be more impartial than elected judges.
Who would want that?
Who would want that?
Insurance companies.
A proposed ballot initiative would drastically change the way property insurance is regulated in California by repealing a law voters passed almost four decades ago [emphasis added].
FR: Never Accept the Premise of Your Opponent’s Argument
As a side note to this thread, please consider the following.
I don't know anything about the referenced law. But don't activist states have a reputation for allowing misleading law descriptions that trick voters into a yes or no?
You can read about Prop 103 on Wiki.
You'll note it passed with a little over 51% of the vote. Most California counties votes against it, but not the ones where most people live (i.e., the Los Angeles and San Francisco areas).
I voted against it.
CA will drive insurance companies out, because they cannot operate taking on more risk with no compensation.
Insurance will become more expensive, not less.
Then what? Is that the goal?
Given the pace of insurance policy cancellations in California due to the inability of the companies to raise their rates to reflect market risk, many people are aware of a direct connection between over-regulation and loss of coverage for their property.
Reality often changes minds, and I’d bet good money that the initiative passes in November, particularly if the anti-Texas redistricting proposition and constitutional amendment is on the ballot.
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