The Eaton and Palisades Fires have brought the challenges facing California's home insurance market into stark relief. Amidst recent calls for Insurance Commissioner Ricardo Lara to take action or resign, VX News shares this letter from November 2023 led by California's first elected Insurance Commissioner, Representative John Garamendi (D-CA08) and members of California’s congressional delegatio urging Lara to use his power under state law to stabilize the insurance market and protect consumers. The letter responds to Commissioner Lara’s proposed Sustainable Insurance Strategy, which signatories contend could diminish the Insurance Commissioner’s regulatory power, as well as other proposals that could threaten the consumer protections established in Proposition 103 and in place since 1988.
Dear Commissioner Lara:
We write regarding your recently announced Sustainable Insurance Strategy. In short, California’s present insurance market is in chaos. Across the state, major insurance companies are canceling policies, denying coverage, and dramatically raising insurance rates for homeowners and other consumers. Many of these consumers include those with federally-backed home loans from the Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), or Veterans Affairs (VA).
We believe that, under Proposition 103 (1988), as California Insurance Commissioner, you have the power to stabilize the statewide insurance market. It would greatly benefit our constituents across California for you to use that power to immediately and quickly review the proposed rate increases under any new risk modeling to determine if they are necessary, adequate, and not excessive for consumers. We also believe it would be beneficial to use that power to require that the insurance industry provides adequate, affordable coverage in every part of the state.
Your recent announcements, including the proposed Sustainable Insurance Strategy, seem to suggest dramatic changes to the Commissioner’s regulatory power that may result in a diminution of the authority granted by California voters and your ability to create a stable insurance market in our state. Proposals such as using proprietary forward-predicting models, expediting rate reviews that limit public comment, allowing insurance companies to abandon certain regions of the state, and incorporating reinsurance costs into Californian rates could threaten the important consumer protections established in Proposition 103 and in place since 1988. We believe it is important to keep California consumer interests at the forefront of your decision-making process.
We bring our concerns to your attention in anticipation of a comprehensive and transparent process of rulemaking, public hearings, and public comment on any proposed changes to the regulatory powers of the Commissioner and process for approving any rate increases for policyholders. Such a public process is necessary for the protection of consumers against unchecked corporate interests, and we strongly believe that any precipitous action should be subject to public scrutiny.
We appreciate your attention to this critical matter.
Signed,
John Garamendi, Member of Congress
Zoe Lofgren, Member of Congress
Norma J. Torres, Member of Congress
Katie Porter, Member of Congress
Linda T. Sánchez, Member of Congress
Jim Costa, Member of Congress
Julia Brownley, Member of Congress
Adam B. Schiff, Member of Congress
Ami Bera, M.D., Member of Congress
Judy Chu, Member of Congress
Josh Harder, Member of Congress
Juan Vargas, Member of Congress
Mark Takano, Member of Congress
Tony Cárdenas, Member of Congress
Ted W. Lieu, Member of Congress
Jared Huffman, Member of Congress
Doris Matsui, Member of Congress
Raul Ruiz, M.D., Member of Congress
Sara Jacobs, Member of Congress
Ro Khanna, Member of Congress
Robert Garcia, Member of Congress
Jimmy Gomez, Member of Congress
Barbara Lee, Member of Congress
Grace F. Napolitano, Member of Congress
Mike Thompson, Member of Congress
Mark DeSaulnier, Member of Congress
Mike Levin, Member of Congress
Eric Swalwell, Member of Congress
Pete Aguilar, Member of Congress
Salud Carbajal, Member of Congress
Sydney Kamlager-Dove, Member of Congress
Anna G. Eshoo, Member of Congress