Major insurance companies commit to staying in or returning to California after new reforms announced

Several major insurance companies have committed to staying in or resuming service in California, but it could mean high rates for consumers.

The companies include Mercury, CSAA, Pacific Specialty, Allstate and Farmers.

Newly announced insurance reforms allow companies to consider new factors when they set premiums, including the likelihood of a catastrophe and the cost they pay to insure themselves.

But advocates, including the group Consumer Watchdog, say the reforms make it easier for companies to increase premiums.

One company, California Casualty, has already filed for a 6.9% premium increase based on the new reforms.

The California Department of Insurance sent Eyewitness News the following statement about the insurance reforms:

“Under Commissioner Lara’s proposed reforms, intervenors will continue to be eligible to receive fees paid by consumers. The only change is Californians will know exactly what they are paying for and to whom.

While public participation is a cornerstone of Prop. 103, the current intervenor system has not been updated since 2006. Stakeholders — including consumer advocates, insurers, and the public — have expressed concerns that the process established decades ago by former Insurance Commissioner John Garamendi lacks transparency, is dominated by a small number of recurring participants, and can lead to unnecessary delays and costs for consumers and taxpayers.

From Day One, the Commissioner’s goal has been to hold true to the spirit of Proposition 103 – making sure no consumer pays more than they are legally required, whether to an insurance company or to an intervenor.”