Panel Probes Insurance Rate Increases

In a move hailed by consumer groups as long overdue, state officials Wednesday opened hearings to determine the reasons for what Insurance Commissioner Roxani Gillespie called “extraordinary” rate increases.

The hearings stem from both heavy consumer complaints about price increases and the fast-growing number of insurance firms that have failed or “disappeared” from the state, Gillespie said.

The agency’s panel will make recommendations to Gov. George Deukmejian and the Legislature after it concludes the hearings.

Consumer advocacy groups attending Wednesday’s first hearing--on automobile insurance rates--hailed the investigation. “These hearings are certain to reveal the extent of the abuse inflicted upon small business and consumers by the insurance industry,” said Harry Snyder, West Coast director of Consumers Union, at a press conference. “We fully expect that the Department of Insurance will conclude that a complete overhaul of the industry is necessary.”