Governor’s Proposal Targets Prop 103’s Public Rate Review that has Saved Homeowners, Drivers, Doctors $6 Billion on Insurance, Says Consumer Watchdog

LOS ANGELES, May 29, 2024 /PRNewswire/ — A proposal released by Governor Newsom yesterday would undercut independent public scrutiny of insurance rate increases and jeopardize savings from the process that consumer advocates have used to save Californians a record $6 billion on their insurance.

Consumer Watchdog Logo (PRNewsfoto/Consumer Watchdog)

The $6 billion represents $2.28 billion saved by home, condo and renters’ insurance policyholders, $3.68 billion in auto insurance savings, and nearly $100 million saved by doctors and other small business owners, from Consumer Watchdog rate challenges between 2002 and 2024.

Click here for a graphic detailing the $6 billion in savings.

Bill language posted by the governor last night could end public participation in insurance rate review and will handcuff Department of Insurance oversight of rates, leading to unnecessary overcharges to consumers.

“The governor’s plan invites insurance companies to set their own prices and will kill public participation in rate review. It takes away the Insurance Commissioner’s ability to make insurance companies justify their charges and turns the Department of Insurance into a rubber-stamp for rate increases. It guts the public intervenor process and will cost insurance consumers billions in savings from future public rate challenges. It’s up to the legislature to fix it,” said Carmen Balber executive director of Consumer Watchdog.

The governor’s proposed language would: 

  • Allow insurance companies to choose their own rate. 
  • Forces the Department to provide an “estimated” rate after 120 days that insurance companies have a right to accept, even if necessary data is not provided by insurance companies.
  • Insurance companies will not answer questions or explain their numbers if the Department is required to estimate a rate based on limited information and disregard the input of intervenors.
  • Contains no provisions for considering a lower rate or addressing objections raised by a public intervenor.
  • Creates more incentives for insurance companies to file serial rate increases below 7% – barring public participation – since they can get three rate increases of less than 7% approved in a year rather than have to face the scrutiny of a hearing, which is allowed for rate hikes over 7%.
  • The proposal released by the governor mirrors closely the language of a deal struck by the Insurance Commissioner and insurance companies last year that failed to win legislative approval at the end of session in 2023. See the analysis of that proposal.

    In the last seven months alone, Consumer Watchdog rate challenges have resulted in nearly $1.5 billion in savings. 

    Recent Insurance Rate Savings, Nov. 2023 – May 2024


    % Rate



    State Farm Rental

    20.0 %

    11.43 %


    State Farm HO

    28.1 %

    20.0 %


    Pacific Specialty HO

    6.9 %

    3.0 %


    Standard Fire HO

    21.70 %

    15.30 %


    Allstate Northbrook Auto

    35.0 %

    30.0 %


    State Farm Auto

    24.6 %

    21.0 %


    GEICO Auto

    20.8 %

    12.8 %


    CSAA Auto

    28.00 %

    9.50 %




    The right of consumers to monitor insurance companies’ compliance with Proposition 103 is part of the 1988 insurance reform initiative that requires insurance companies to open their books and prove their rates and premiums are reasonable before the Insurance Commissioner can approve them.

    Prop 103 created the public intervenor process to give consumers a voice in rate oversight, both to assist the Department of Insurance and to make sure the Commissioner enforces the law.

    It requires the insurance companies to pay the fees and expenses of lawyers, actuaries, and other experts who represent consumers in such challenges. Consumer Watchdog attorneys, outside actuaries, and other experts were paid $13.5 million in fees over 22 years for work to achieve the $6 billion in savings. That amounts to less than 25 cents in fees for every $100 dollars consumers saved from lower insurance premiums.

    For more information, read the study, “How Citizen Enforcement of Proposition 103 has Saved Californians $5.5 Billion – and Why the Insurance Industry Hates It.”

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    SOURCE Consumer Watchdog