Though Dave Jones and Harvey Rosenfield have traditionally collaborated, a recent issue has led to a split.
The California Insurance Commissioner, Dave Jones, and advocate from Consumer Watchdog, Harvey Rosenfield, have traditionally held very similar beliefs when it came to the industry and its insurance rates.
That said, this trend appears to have changed when it comes to the rates being charged by Allstate.
Rosenfield, who hails from Santa Monica, was the author of Proposition 103, a ballot measure from 1988, which converted the position of insurance commissioner in the state into an elected one. It also provided that official with the authority to be able to reject insurance rates that have been proposed for home, auto, and certain other forms, should they be determined to be excessive. Last year, Consumer Watchdog – with Rosenfield at the helm – attempted to broaden the regulatory authority of the commissioner to apply to the rates of health plans, as well, but voters opposed it.
That said, a recent issue of certain Allstate insurance rates has now brought Rosenfield against the commissioner.
According to Consumer Watchdog, Allstate Insurance Co. has been overcharging for the policies that they are selling for homeowners, rental, and condominium coverage. The consumer advocate group filed a petition with the California Insurance Department, back in July 2014, claiming that premiums were too high, and calling for the commissioner to hold hearings. Rosenfield said that for every $1 of homeowners insurance that Allstate collected in premiums, it was paying out only $0.44, last year.
In February, Commissioner Jones stated that there had been “insufficient evidence” to support the claims by Consumer Watchdog that stated that the rates being charged by Allstate were “excessive”. He also said that he would be requiring the insurance company to make a new rate application filing.
Since that time, there has been a fiery battle going on between Rosenfield and Jones, particularly when it came to the commissioner’s insurance rates regulation history, which Rosenfield called “lackluster”. He also stated that Jones should “change his approach or his record is going to be one of costing people more money — rather than saving them more money.”
Insurance Commissioner Dave Jones has saved consumers $1.9 billion by consistently and strongly regulating auto, home and other property insurance rates under Proposition 103. Recently, he fined Mercury Insurance $27.6 million for overcharging consumers and won a lawsuit to uphold a regulation denying insurers the ability to pass on brand advertising costs to consumers.
Whether he is fighting lawsuits brought by insurers to challenge and undermine consumer protection regulations or ordering insurers to comply with the law, consumer protection is Commissioner Jones’ number one priority. Anyone suggesting otherwise is simply ignoring the facts.
The California Department of Insurance appreciates Consumer Watchdog’s concerns about Allstate’s rates, however the department’s independent professional actuaries disagreed with their analysis. California faces significant risk of severe fires which is only increasing with prolonged drought conditions. Allstate some time ago stopped writing new homeowners insurance policies in California. Commissioner Jones ordered Allstate to file new rates which will be available for the public and the Department to review and determine whether their rates are excessive.
Byron Tucker
Deputy Insurance Commissioner, Communications California Department of Insurance