ATTORNEY NEWSLETTER
Lobbyists Ask Insurance Commissioner to Override Judge’s Decision
Consumer Protections At Risk
Important Of Independent Judicial Review
Evans Law Firm, Inc. is a consumer/plaintiffs’ law firm with a focus and dedication to safeguarding consumer rights under federal and State consumer protection laws. Many of the laws we litigate over protect certain groups of consumers, like seniors and dependent adults, or protect all consumers with respect to certain goods and services, like insurance. Typically, the defendants in our cases are corporations flouting consumer protections. But government agencies may also flout the very consumer protection laws they are supposed to enforce. Recently, a dispute over insurance rate approval procedures has arisen between the California Department of Insurance, insurance company lobbyists, and the independent administrative law division of that department that shows just how a government agency may veer from its mission of protecting consumers. If you have been the victim of violations of any consumer protection laws in California, including under the Insurance Code, call us today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
California Department Of Insurance Dispute
In a recent opinion, the Chief Administrative Law Judge (CALJ) of the California Department of Insurance (DOI) has concluded that the DOI is flouting laws designed to protect Californians against insurance overcharges and arbitrary decision-making by the agency. The ruling has galvanized the insurance industry and a DOI attorney to ask California Insurance Commissioner Ricardo Lara to overturn key portions of the Chief Judge’s decisions. That is not good news for consumers.
Proposition 103 And Rate Review
Under insurance reform Proposition 103, insurance companies are required to apply to the elected Insurance Commissioner for approval of changes in rates and premiums; open their books to public scrutiny and justify rate those changes before they go into effect; and allow consumers to challenge requests they believe are improper. In a lengthy rebuke of the procedures that Insurance Commissioners have utilized when consumers challenge proposed rates as unlawful under Proposition 103, Chief Administrative Law Judge (CALJ) Kristin I. Rosi noted that settlements between the Department, insurance companies and consumer representatives must by law be subject to review by judges within the agency’s independent judicial unit, the Administrative Hearing Bureau. That is “an essential part of [Proposition 103’s] rate proceeding framework, meant to ensure public oversight and protection,” Judge Rosi explained.
Judge Rosi noted that “[w]hen the parties ignore settlement regulations meant to provide specific oversight, California consumers are once again left without assurances that the implemented rate is fundamentally fair and reasonable.” And it “permits insurance carriers and the Department to freeze out consumer groups from any negotiated resolution in contravention of Proposition 103’s stated purpose of fostering public access and information.”
Insurance Industry Pushback
Two major insurance companies, State Farm and Allstate – whose previous rate increases are among those criticized by the CALJ’s rulings – have joined an agency attorney to urge the Commissioner to reverse the Chief Judge. The CALJ’s rulings come as Commissioner Lara has proposed new regulations based on proposals long desired by the insurance industry that will cause insurance rates to skyrocket for home, renter, auto and small business insurance. Lara has also announced a plan to undermine or eliminate key procedural protections the voters established that mandate insurance companies apply for approval of rate increases, open their books to public scrutiny to justify rate changes before they go into effect, and allow the public to challenge requests they believe are unjust.
In our opinion the decisions of the CALJ are correct and should not be disturbed particularly out of deference to industry pressure. To disturb the rulings or remove the rate approval process from independent review by the Administrative Law division would undermine the integrity of the agency, the authority and independence of the administrative law judges, and the laws that the people of California enacted to protect consumers.
Contact Us
If you have been the victim of violations of any consumer protection laws in California, including under the Insurance Code, call us today at (415)441-8669. Our toll-free number is 1-888-50EVANS (888-503-8267).
