Insurers launch challenge to Consumer Watchdog’s bottom line in California

By Camille von Kaenel | 06/26/2024 06:28 AM EDT

Insurers’ pushback on the group’s participation in rate hearings comes as the state Insurance Department is reviewing requests for record rate increases.

A wildfire is seen.

Insurance companies and ratepayer advocates are sparring in California over who should be eligible to participate in hearings as insurance rates are set to rise to cover increased wildfire costs. @forestservice/Twitter

SACRAMENTO, California — Insurance and business groups are pushing back on ratepayer advocacy group Consumer Watchdog’s participation in rate-setting proceedings — at the encouragement of Insurance Commissioner Ricardo Lara.

The move comes as state regulators are weighing faster rate increases to keep insurers from fleeing fire-prone areas. Consumer Watchdog, a firebrand group that sponsored Prop. 103, the 1988 ballot initiative requiring state approval of property and casualty insurance rates, is often the only advocacy group participating in the proceedings.

Property insurers fleeing the rising costs of climate change have grown increasingly frustrated with Consumer Watchdog because of the group’s opposition to Lara’s proposed reforms to entice companies back to California, including faster rate hikes and the use of proprietary forward-looking climate models. The insurers asked the Insurance Department to require Consumer Watchdog to provide more information about the consumers it claims to represent and to hold a public hearing on the group’s role.


If the Insurance Department were to determine Consumer Watchdog ineligible as an intervenor, it would effectively neuter the group. It received 96 percent of the fees the Insurance Department paid to intervenors last year, adding up to over $21 million for the group since 1988.