Insurance Newscast

During this time of economic recession California’s Insurance Commissioner has given away 6.9 percent rate increases to major insurance companies without public scrutiny.

The Greenlining Institute, a California consumer protection group, asserts that the Commissioner has given away at least 6 of these rate increases to major insurance companies in 2008.

Greenlining alleges that the proposed 6.9 percent increase, one-tenth of a percent below the 7 percent necessary to mandate an automatic public hearing, is “a conspicuously suspect figure that is intended to circumvent a mandatory hearing.” Samuel Kang, managing attorney for the Greenlining Institute estimated, “As a result of Commissioner Poizner’s 6.9 percent golden tickets close to 100 million dollars in rate increases have never been scrutinized.”

Greenlining has attempted to challenge the pattern of 6.9 percent rate increases by filing 6 formal requests for a hearing at the California Department of Insurance. However, Commissioner Poizner has denied calling a hearing on all 6 occasions based on the same technicality – that a 6.9 percent increase is not mandatory for a hearing.

As a result major insurance companies like Allstate, Safeco and Farmers have already taken advantage of Commissioner Poizner’s 6.9 percent rate increases. Kang said that such giveaways are ultimately coming at the expense of California consumers.

Greenlining contends that now, more than ever, because of the current financial crisis, increasing foreclosures, and fewer Americans being able to pay for necessities like groceries and utilities, consumers need the utmost protection.

“Even with this ongoing crisis Commissioner Poizner allows nickel-and-diming to a tune of 100 million dollars,” said Kang, “I’m confused why Commissioner Poizner would allow California consumers to be nickel-and-dimed like this even though he has publicly stated that in today’s economic environment people need all the help they can get just to pay the bills.”

“Commissioner Poizner continues to proclaim that he is the ‘top consumer watchdog’ in the state of California,” said Kang, “But he has a funny way of showing it.”

The Greenlining institute is a multiethnic public policy and advocacy think tank that advocates for low income and minority communities through economic development, consumer protection, health advocacy, civil rights, and leadership development.