Balancing insurers' profitability with affordability for policyholders emerged as a top concern for California insurance commissioner candidates. Seven of the 11 candidates running in the June 2 primary answered questions on the subject. This is the third of a four-part series, with other parts covering
As a regulator, how would you address insurers' rate increase requests?
Ben Allen (D): I would review rate requests based on evidence, not politics or pressure. Insurers must justify their filings with credible data, transparent assumptions and compliance with California law. At the same time, the process should move in months, not years, because excessive delay destabilizes the market and can reduce availability. I support modernizing rate review while preserving Prop. 103's core consumer protections. The goal is not to rubber-stamp increases or suppress rates artificially. It is to ensure rates are fair, adequate, transparent and not excessive.
Keith Davis (Ind.): Every major rate-increase request should be known to the public. Consumers deserve transparency, especially when it directly affects their finances and ability to keep coverage. If a rate increase is going to be approved or denied, somebody needs to take responsibility for that decision. As commissioner, that responsibility would fall on me. I'm fighting for more transparency in the insurance industry, and that starts with the rate approval process. If an increase is truly justified and necessary to keep the market stable, then we will approve it. But if it appears excessive, unfair or predatory, then we will deny it.
Merritt Farren (R): As someone who has participated in a rate approval proceeding, I can attest to the fact that there is lots of room to redo the regulations governing rate approvals to allow the approvals to be much more efficient and both allow insurers to innovate and better protect consumers. We can and should drastically reduce the speed of rate approvals and allow rate approvals to reflect market realities.
Jane Kim (D): I will require that every rate request be justified transparently, with full disclosure of how premiums are spent and how risk is calculated, as well as what profit margins are built in. Catastrophe models used to justify increases must be disclosed and independently reviewable. I will publish an annual "Where Your Premium Goes" report so Californians can see what they're actually paying for. I will also prohibit valid claims from being used as justification for rate increases. Finally, rate decisions shouldn't be evaluated against quarterly earnings goals; they should be evaluated against what actually produces a stable market over time.
Stacy Korsgaden (R): If an insurer brings a rate request, I would prefer file-and-use over endless delay. The real change is creating a strong new business division that attracts many admitted carriers back into California, restores competition, and lets price, service and coverage, not rigid price controls, drive fair rates and more choice for consumers while maintaining strong, transparent oversight to protect policyholders.
Eduardo "Lalo" Vargas (Socialist): I pledge to freeze rates and deny rate hikes until insurance companies cease their exploitative business practices and pay the survivors of the Los Angeles fires the full compensation needed to rebuild and repair their homes. State Farm's 17% rate hike last year was excessive and should not have been approved. State Farm was found to have broken the law in the way they handled claims from L.A. fire survivors. In California, an insurance company that doesn't provide compensation to policyholders who paid in for decades, doesn't get rewarded with rate hikes. These rate hikes are criminal and must end.
Patrick Wolff (D): As noted above, I believe California's filing review can and should be substantially expedited to bring the average review time much closer to 60 days, versus the
How would you weigh insurers' ability to keep operating profitably against an obligation to provide adequate property coverage for residents?
Ben Allen: Consumers need affordable coverage, but they also need coverage to be available. A market where insurers leave the state or push people into the FAIR Plan does not protect consumers. I would require insurers to justify rates and practices with real data, while also insisting that companies using modernized tools commit to writing more policies in California, including in higher-risk areas. Profitability cannot be the only goal, but financial reality cannot be ignored. The commissioner's job is to protect consumers and maintain a functioning, accountable market.
Keith Davis: One of the biggest problems is people act like insurance companies making money is automatically bad. It's not. If companies cannot operate profitably, they leave the state, stop writing policies, or dump people onto the FAIR Plan. We are already seeing that now. At the same time, consumers are tired of feeling like they are the only ones sacrificing while rates keep going up and coverage shrinks. As commissioner, I would not blindly side with insurance companies or blindly side with politics. I would bring balance back to the market and make sure both sides are treated fairly.
Merritt Farren: We can only get out of the logjam we're in now, where innovation is blocked in the name of consumer protection — that doesn't ultimately protect the consumer — by taking the customer-centric innovation approach taken at Amazon and similar companies. That's the approach I lived at Amazon and would bring to the Department of Insurance. The best companies know that they can do well financially by doing well for the customer.
Jane Kim: CEO bonuses and shareholder payouts cannot and should not be the priority of a functioning insurance system. Insurance is about protecting people — that was its original promise. When insurers use "profitability" as a reason to drop high-risk customers while raising premiums on low-risk ones, we have a systemic failure. If companies want to do business in the largest insurance market in the country, they must serve the full market. I will enforce coverage requirements as a condition of rate approval. Insurers who want to exit should also have to pay an exit fee and forfeit other lines of business.
Stacy Korsgaden: California has the capacity to insure every home. Insurance is about assessing risk and charging a price for it. The disgrace is that state leaders have let those risks explode through failed forest, water, land management and rising crime. With a commissioner who is not politically motivated but understands that risk assessment and pricing go hand in hand, we will restore an abundance of competition. When we also restore responsible, safety focused leadership and make California predictable, insurers will return, competition will increase and our market will thrive like it once did.
Eduardo "Lalo" Vargas: California deserves insurance as a human right, not a commodity sold for profit. With insurers leaving the state, we've seen how the market is a weak foundation for our insurance system. It is incumbent upon the next commissioner to create an insurance system that is not driven by the profit motive. We need a public insurer that can guarantee coverage for all — whether it's in response to a natural disaster, a car crash or a health emergency. Everyone deserves affordable insurance as a human right.
Patrick Wolff: The framing of the question is a false choice. It is impossible to provide adequate property coverage for residents unless risk is priced rationally. This means insurance companies need to be able to operate economically. The real questions are threefold: (1) How do we foster a competitive market with choice and competition while holding insurance companies accountable so that consumers are fully empowered? (2) How can we best reduce risk both through market design and through direct government action? (3) What subsidies are appropriate to provide the help people need and deserve?
Consumer advocates' compensation for participation in rate-increase considerations has become a contentious issue. What is your view of how this has been addressed (including
Ben Allen: Consumer participation is an important part of Prop. 103 and has helped provide independent scrutiny of rate filings. At the same time, the process must be transparent, efficient and accountable. Compensation should support meaningful consumer advocacy, not unnecessary delay or duplicative work. I would review pending changes carefully to ensure they preserve the public's ability to participate while improving timeliness, standards and oversight. California should not weaken consumer voices, but we should make sure the process serves consumers by producing fair, evidence-based decisions without avoidable bottlenecks.
Keith Davis: A lot of regular people look at the insurance system and feel like there are too many insiders involved while consumers are stuck trying to figure out what is really going on. I have no problem with consumer advocates being involved, but if money is being paid out connected to rate hearings, then the public deserves full transparency on who is getting paid, how much and for what. When families are struggling to afford insurance, the last thing people want is a process that feels political or disconnected from reality. Sunlight and transparency fix a lot of problems.
Merritt Farren: The pending changes are unnecessary and inappropriate. The need for and payments to intervenors will naturally come down with the regulatory changes I'll make to streamline and rationalize rate approval and similar proceedings.
Jane Kim: Proposition 103 was designed to give the public a real voice in rate decisions. Commissioner Lara's proposed rule limiting advocate compensation for challenging sub-7% rate increases undermines that. Small increases add up, and Californians deserve representation when insurers come asking for more. I will reverse that rule and strengthen, not curtail, consumer participation in rate proceedings. Insurers have full legal teams defending their requests, which means that consumers deserve equally capable advocates.
Stacy Korsgaden: If California had a truly competitive market, we would not need armies of lawyers in every rate case. Proposition 103 has failed on that front. Its structure and the intervenor model have helped produce today's reality: shrinking availability and prices out of reach. The best way to protect consumers is not more procedure but more competition, innovation and choice, so multiple admitted carriers are fighting to win customers on price, service and coverage. That is how you lower costs and restore real consumer power.
Eduardo "Lalo" Vargas: The intervenor process is an important way consumers can directly influence the rate-approval process. We should make sure that consumers always retain that right to challenge an insurance company's request for more profit. I believe that there are even more powerful ways to encourage policyholders to participate in the regulatory process. I would put working people at the helm of the Department of Insurance, staffing major leadership positions and task forces with people who have a proven track record fighting for policyholders.
Patrick Wolff: I appreciate and take seriously the objections of Consumer Watchdog. I agree that it is necessary to maintain a robust review process for cases that require it, such as the State Farm "emergency rate hike" request, where the robust challenge led to a substantial curtailment that benefited consumers. While I have not been able to review the new regulations in detail, from what I have seen they appear reasonable to me. I look forward to the Office of Administrative Law ruling and I will study their ruling carefully when it is published.
