The two candidates running for state insurance commissioner present a stark contrast. The incumbent, Democrat Dave Jones, has used his regulatory authority to push insurers to slow the growth of premiums for auto, home and other property and casualty insurance. His challenger, Republican state Sen. Ted Gaines of Roseville, isn't convinced that the insurance commissioner should have the power to pass judgment over premiums. Gaines is an insurance agent, and that job may give him valuable insights into the industry. But Jones is the only sensible choice to oversee it.
Four years after the Legislature required all drivers to carry insurance, Californians voted in 1988 to require auto insurers to roll back premiums 20%. That ballot measure, Proposition 103, also required insurers to obtain the Department of Insurance's approval before making any change in property or casualty insurance premiums (including those for auto policies), and to show that the proposed rates would not be "excessive" or "inadequate." The change added teeth to the department's little-used authority to reject premiums that would generate unjustifiably large profits or leave an insurer unable to pay its customers' bills. All told, the department oversees more than 600 insurance companies that collect more than $120 billion in premiums annually from Californians.
Jones has made full use of the department's power, requiring insurers to reduce proposed increases or increase proposed rate cuts more than 500 times during his term while forcing life insurers to pay $1 billion in benefits they were improperly withholding. He's also been an activist commissioner, pushing for new rules on insurers related to gender non-discrimination, the coverage of autism treatments and the risks associated with climate change.
Gaines argues that Jones has made it too difficult for insurers to offer new products in California, which has reduced competition and hurt consumers. He has argued that rather than have the state subject new premiums and rate changes to a time-consuming review, consumers would be better served if insurers could innovate and quickly bring products to the market. As welcome as more competition would be, however, the commissioner can't ignore the limits on premiums set by Proposition 103 — an initiative that Gaines opposed.
Voters will also decide in November whether to extend the insurance department's regulatory authority to health insurance plans, as proposed by a ballot measure (Proposition 45) that Jones supports and Gaines opposes. Regardless of the outcome of that vote, it's hard to see why Californians would be better served by having a commissioner of insurance who doesn't want to use the office's primary tool. Jones has been an energetic insurance commissioner who's shown an unusual ability to master the complex details of the field. The Times urges voters to give him another term.