Who Runs for Insurance Commissioner?

from Levi SumagasaiCalMatters

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Californians finish voting Tuesday for who they think can best fill one of the state’s toughest jobs: insurance commissioner.

The commissioner is responsible for regulating the nation’s largest property insurance market, which includes home and auto insurance, plus health, pet, trucking and life insurance, and workers’ compensation.

But the hot topic over the past few years as wildfire risk has increased has been home and fire insurance. The next commissioner will face many challenges that include trying to balance the availability of property insurance with affordability. Some insurance companies that had stopped renewing policies or writing new ones for the past few years are now taking advantage of new regulations that allow them to use new tools to set their rates. That usually means premiums will go up because the insurance department, led by the commissioner, will likely continue to approve increases in homeowner’s insurance premiums.

The new commissioner will also have to deal with the aftermath of last year’s wildfires in Los Angeles County. Insurance-claim delays and refusals are a key part of the slow pace of recovery and recovery. State Farm, California’s largest individual insurer, and FAIR Plan, the state-authorized fire insurance provider of last resort, are facing lawsuits from homeowners and legal actions from the insurance department over their handling of claims from these fires.

The leading Democratic candidates are state Sen. Ben Allenwhich will be released by the legislature; Jane Kim, head of the California Working Families Party, who served on the San Francisco Board of Supervisors; Patrick Wolff, a financial analyst who has never held public office; and Steven Bradford, former state senator and assemblyman. Neither of the leading Republican candidates has held statewide public office either: Stacey Korsgaden, a longtime insurance agent, and Merritt Farron, an attorney who lost his home in the Palisades fire last year.

Candidates interviewed by CalMatters most agreed on the problems to be solved but offered different solutions. Several of them have asked increased financial participation of the state: Kim wants to create a state wildfire and flood authority funded by a portion of policyholders’ premiums. Farron wants to create a state reinsurance authority funded by a fee insurers charge policyholders, something both Kim and Allen have expressed interest in. Bradford said he would explore a public-private partnership to help insurers continue to write policies in California.

Consumer advocacy groups and former insurance commissioners say the job is complex and involves “a brutal balancing act” that takes into account the needs of homeowners, business owners, landlords and tenants while keeping insurance companies confident that the rates they charge are responsive to the state’s growing wildfire risk.

U.S. Rep. John Garamendi, the Democratic congressman whose district includes much of Contra Costa and Solano counties, was the state’s first insurance commissioner and held the position twice. He told CalMatters that the commissioner’s job is “complicated, hard, detailed work.”

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.