Opinion: Weak Leadership is Failing California’s Insurance Market
They say weak leaders make hard times. Under the leadership of Ricardo Lara, the California Department of Insurance is cracking under pressure. The California insurance market is at a breaking point, and Lara is missing in action.
As reported by the San Francisco Chronicle on July 1st, Lara has avoided hearings and opportunities to testify before the Little Hoover Commission about the ongoing crisis.
Established in 1962, the Little Hoover Commission serves as a watchdog over state government operations. Inspired by the federal Commission on Organization of the Executive Branch, nicknamed the “Hoover Commission,” it investigates and proposes ways to make state government more efficient and cost-effective.
As a business owner, real estate investor, and homeowner, I have repeatedly visited the Department of Insurance website seeking updates and communication regarding the insurance crisis. The inability to obtain fire insurance is spilling over from foothill properties to residential areas that should be easy to insure. The website, while touting a new “Sustainable Insurance Plan,” uses buzzwords like “renewable” and “sustainable,” which many have come to disdain as replacements for common sense and responsibility.
Lara is quick to announce his efforts to protect consumers, but at what cost? The actions of Lara and other government officials are strangling the marketplace they aim to protect.
Insurance is a product. Are we heading towards socialism in our personal lines market, or will we return to the competition and capitalism that built our country?
Californians must recognize the impact of Proposition 103, passed in 1988. After surviving legal challenges, it was implemented, allowing the Department of Insurance to control insurance rates. The details are complex, but the bottom line is that homeowners’ rates in California have been suppressed because rate filings by companies are slow and expensive. Insurance companies cannot continue to provide coverage with inadequate rates. Compounding the issue, our California government leaders refuse to take a tough stance on crime, reconsider or reimagine our timber industry, and, most importantly, rewrite or abolish Proposition 103.
Solving these issues requires real leadership. Ricardo Lara is not the right person to lead this change. It’s time for new leadership so we can return to enjoying California.
