California Insurance Commissioner: Who’s Running in the Nov. 8 General Election and Why It Matters

What does the California Insurance Commissioner do?

Jhe State Insurance Commissioner is California’s foremost consumer advocate for insurance, whether it’s insurance for your car, home or business. Their job is to make sure that insurance companies treat consumers fairly. They do this primarily by setting regulations for the industry (in other words, what insurance companies can or cannot do), administer licensing, and investigate consumer complaints.

When it comes to property and casualty insurance, the commissioner gets to approve or reject proposed rate changes, usually increases. But they also need to make sure insurance companies can stay financially sound in order to pay claims — and so they don’t end up limiting services or leaving the state.

The commissioner oversees the 1,400-employee insurance department, which regulates all kinds of insurance — home, auto, fire, earthquake, some types of health insurance, even pet insurance. It also regulates the bond industry – bonds are considered an assurance that a person will return for trial.

Think an insurance company is engaging in fraud or price gouging? Or do you have reason to believe that an insurance broker’s license should be revoked? You can file complaints with the Department of Insurance, and they can initiate investigations. The insurance commissioner can see what’s going on across the state, punish violators, and issue new regulations to prevent future abuse.

This position was a governor-appointed role until 1988, when voters adopted a ballot initiative to make it an elective position. The move was widely seen as a revolt against high insurance premiums, especially for auto insurance.

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Many of the rules that determine how much you pay for auto insurance were shaped by the old insurance commissioners. In California, zip codes were once a primary factor in determining driver auto insurance rates – for example, if you lived in an area with a high number of vehicular accidents, you would likely pay more for your insurance than if you lived elsewhere, even if you had never had an accident yourself.

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That changed in 2005, when then insurance commissioner John Garamendi put in place new rules saying insurers had to reduce the weight assigned to postal codes to determine these rates and focus more on factors such as driving records and experience.

Insurers were also allowed to charge different rates to men and women based on their gender. That ended in 2019, when then-insurance commissioner Dave Jones made California the seventh U.S. state to prohibit this practice. (Yes, until just three years ago.)

What is the plan for the next term?

One word: forest fires.

Climate change and California’s now year-round fire season have disrupted the wildfire insurance industry. As the number of wildfires – and damage to homes and livelihoods – has skyrocketed in recent years, so have the number of insurance claims and the amounts of payments to homeowners. And as insurance companies lose money, they raise premiums to offset the costs or drop the cover downright, leaving homeowners in high fire risk areas with difficult decisions to make about whether they should risk staying or if they can afford to move. California’s insurance commissioner will have to try to find a way to keep insurance affordable enough for people to buy, but priced high enough for companies to have enough money to pay claims.

Who we spoke to for this piece

Robert Stern, former president of the Center for Government Studies

The candidates

This section was republished from CalMatters’ 2022 Voter’s Guide.

In 2018, Democratic state senator Ricardo Lara defeated Steve Poizner, who ran as an independent but was a Republican when he served as insurance commissioner from 2007 to 2011. Lara became California’s first openly gay public servant. .

This year, Lara faced a feisty primary battle with a Democratic challenger, Assemblyman Marc Levine. Levine accused Lara of not doing enough to protect homeowners in wildfire areas from losing their cover. Levine’s campaign also created a video and sent out letters attacking Lara for accepting industry donations. In response, Lara’s campaign sent out mailings criticizing Levine’s voting record on labor issues. Lara has also benefited from the approvals of the California Democratic Party, California Environmental VotersGovernor Gavin Newsom, US Senator Alex Padilla, as well as labor groups and other state and national officials.

But in the end, a little-known cybersecurity equipment maker named Robert Howell, who ran as a Republican, got about 7,000 more votes than Levine for second place in the general election. Lara and Howell will face off in November.

Robert Howel

Cybersecurity Equipment Manufacturer (Republican)

This profile is from CalMatters’ 2022 Voter’s Guide. Check out their comprehensive guide to learn more about employment history and positions on specific issues.

Robert Howell is the longtime chairman of a Silicon Valley cybersecurity equipment maker and is running for insurance commissioner as a self-proclaimed “Reagan Republican.” He narrowly clinched second place in the primary, passing Democratic State Assemblyman Marc Levine by a tenth of a percentage point. Howell will challenge incumbent commissioner Ricardo Lara in the November election.

Howell says he is committed to helping wildfire victims and says he will fight waste, fraud and “over-inflated” insurance premiums. He also says he won’t take money from insurance companies.

Howell has already run for office twice. In March 2020, he participated in a primary for a state senate seat representing District 15, a segment of Silicon Valley that includes San Jose and Cupertino. Howell finished fourth out of seven candidates and did not qualify for the general election. In November 2020, Howell ran for a spot on the board of the Santa Clara Valley Open Space Authority, but did not win.

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Ricardo Lara

Insurance Commissioner (Democrat)

This profile is from CalMatters’ 2022 Voter’s Guide. Check out their comprehensive guide to learn more about Lara’s work history and her stances on specific issues.

Ricardo Lara has risen through the ranks of California state politics and now hopes to keep his job as insurance commissioner. The son of immigrants, Lara is also the first openly gay elected official in the Golden State.

During her tenure as commissioner, Lara temporarily stopped insurance companies from dropping homeowners affected by certain wildfires in 2019 and 2020, and proposed new rules that would force insurance companies to offer discounts to homeowners. who take certain measures to protect their homes against fires. He also ordered insurance companies to refund certain auto insurance premiums to California drivers, who were on the road less during the pandemic.

After the United States Supreme Court struck down the constitutional right to have an abortion, Lara was vocal about her support for access to abortion.

At an industry conference in 2019, Lara said she was open to providing insurers with insurers’ driver data to set car insurance rates – a move opposed by consumer advocates who have raised confidentiality issues. But in 2022, he had changed his tone, fight with Elon Musk on Twitter on the tech mogul’s push for California driver data.

Lara’s tenure has also been marked by a series of controversies. First, it was for accepting tens of thousands of dollars in campaign donations from insurance industry executives after pledging not to. After the San Diego Union-Tribune reported the donations, Lara pledged to return the money. Lara’s office also intervened at least four times in proceedings involving a company whose executives and their spouses donated to Lara’s re-election campaign.

Lara has also rented a second residence in Sacramento, where her job as commissioner often takes her, and has the taxpayers stuck with the bill. A spokesperson defended the move, telling Politico it was not illegal and “has the potential to benefit taxpayers by saving on hotel costs.”

In May, the California Fair Political Practices Commission opened an investigation into Lara and several political committees over a series of political contributions. It is still ongoing.

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