California — A Ballot Measure to Eliminate Prop 103 Insurance Price Controls

The California Insurance Market Reform Act of 2026 has been introduced to the people of California by insurance agency owner, Elizabeth Hammack. She hopes to get 600,000 valid voters to sign her petition by June 25, 2026 to get the proposition on the November 2026 ballot.

The idea — the head of Panorama Insurance Associates in Roseville, California says — is to do away with the decades old insurance regulating, Proposition 103. Not only will it repeal Prop. 103, it will also make the state’s insurance commissioner a position appointed by the governor rather than an elected position. 

If it passes, the public will also no longer be able to give input on insurance rate increase proposals. The Department of Insurance, and the insurance commissioner, will set them.

PIA Western Alliance Executive Vice President Kim Legato said if this gets on the ballot — and somehow passes — it might further damage an already fragile insurance market, and could even cause it to totally collapse. So the PIA will be watching this closely and encourages its members to be engaged and informed on what’s happening here.

“As for the push to totally do away with Proposition 103, while PIA is opposed to Prop 103’s imposed limits on the rate-approval process, this would do away with public input on rate filings. That’s not a good thing,” she told Weekly Industry News. “Even more troublesome, the commissioner position will be appointed by the governor instead of through the election process. The voting public has every right to vote who they elect to represent them as insurance commissioner.”

This isn’t to say the PIA is all that positive about Proposition 103.

“It was enacted under the guise of being consumer protection but has proven to be a draconian overreach into the insurance marketplace,” she said. “The intent may have been to lower premiums but in practice it has created a burdensome regulatory environment that has stifled competition, innovation, and consumer choice.”

Legato said reforms are needed, and this appears to be Commissioner Lara’s current push with the Sustainable Insurance Strategy reforms.

Molly Weeden of the California Department of Insurance said the 40-year old Proposition 103 has been good for California’s insurance market and doesn’t see repeal as being positive.

“Prop. 103 guarantees consumers’ right to hold all parties in the ratemaking process accountable,” Weeden said and noted Commissioner Lara is “opposed to any effort to take away the rights consumers deserve.”

Carmen Balber is the executive director of California’s Consumer Watchdog. She isn’t taking this effort seriously. She believes Californians love the insurance regulating Prop. 103 and says it has, alone, saved people in California over $150 billion in auto insurance premium prices.

She said polls and surveys done by Consumer Watchdog show Californians want more regulation and not less.

“We’re confident voters want more accountability from insurance companies,” Balber said and noted a repeal of Proposition 103 “would mean skyrocketing rates for home and auto insurance policy holders.”

Legato says voters want accountability as much as they want solutions. And more regulation isn’t necessarily a solution. This thought brought her back to Lara’s Sustainable Insurance Strategy reforms.

“Will his reforms work? Time will tell. However, California has faced so much regulation under Proposition 103 that it increased premiums, has driven out competition and reduced consumer choice,” Legato added. “More specifically, Proposition 103 has stifled the innovation that is so critical to a healthy insurance market and turned it into a fragile marketplace. To help correct an over burdened market place, innovation is key to creating new, competitive insurance products that reflect emerging needs in areas like technology and personalized risk factors.”

In the end, she said Prop 103 actually limits consumer choice, “particularly as the insurance industry continues to evolve with the rise of new technologies and data analytics, and the PIA is not sure Lara’s reforms are going to fix that.”

Source link: Cal Matters — http://bit.ly/3UVWRmZ