The Consumer Federation of America joined a letter to the California State Legislature opposing proposed budget trailer language that would undermine insurance consumer protections and rate review. The bill would gut the consumer intervention process and tie the Insurance Commissioner’s hands, sacrificing transparent public scrutiny of insurance rate increases for speedy approvals. Consumer interventions by Consumer Watchdog over the last 22 years have produced $6 billion in savings, and Consumer Federation of California Education Foundation’s interventions over the past 10 years have resulted in over $400 million in savings for California policyholders. These savings are in jeopardy under this proposal.

The proposal would remove consumer interventions in rate hikes under 7%, force the Insurance Commissioner to make determinations based on insufficient information, give the Commissioner the power to approve rate hikes before consumers can intervene, and allow the Commissioner and insurance companies to bypass public hearings for larger rate hikes. Giving insurers the right to raise rates more quickly will only leave Californians paying higher rates, not get more insurance companies back in the market.