CA Department Sends Proposition 103 Reminder to Warn Insurers of Excessive Rates

Mar 20, 2018

CA Department of Insurance Warns Insurers of Excessive Rates

Last week, a notice was sent to all California insurance companies. The notice was a reminder of Proposition 103 ” the requirement that all insurance companies must gain approval from the California Department of Insurance before carrying out their property and casualty rates to policyholders.


Proposition 103
The Proposition notes that these insurers are to provide fair rates to policyholders. This means policy rates cannot be excessive, inadequate, or unfairly discriminatory. Before the Proposition was passed in November of 1988, prior automobile, casualty, and property insurance rates were originally made by insurance companies. These few insurance companies who had approved rates before 1988, did not gain approval from the official Insurance Commissioner.


2018 Federal Tax Schedule
Revisions to the newest 2018 Federal Tax Schedule had reduced its original corporate tax rate from 35, to 21 percent. As a result, many insurance companies have been alleged at charging overpriced and excessive policy rates. Given the department’s release of the notice, Insurers are reminded to fairly charge their policyholders at reasonable prices.


Regular Rate Review
Earlier in the year, California Insurance Commissioner Dave Jones directed the insurance department to conduct regulatory review of property and casualty insurance rates. Given the newest Federal Tax Schedule and the opportunity for insurers to retain more policyholder premiums as profit, the Proposition 103 reminder has been set in hopes of protecting potential policyholders.



“I am working to make sure insurance companies are not taking advantage of their policyholders,” said Insurance Commissioner Dave Jones. “In California insurer profits are limited under Proposition 103, therefore the savings they realize from the tax reductions should result in those savings being passed on to policyholders through lower premiums.”

Adjusting Unfair Rates
In order for the Department of Insurance to keep track of insurance rates, the department has established a Public Notice of Insurance Company Rate Filings every week. The department publishes their findings at the end of every business week. Individuals who are interested in learning more also have the option on subscribing to their system to receive automatic notifications.


103 Intervention Process
Consumers who are seeking further action for unfair policy rates are entitled to contribute to a Proposition 103 Intervention Process. During this process, the individual must accommodate participation when administering the process of settling their insurance rate(s). These individuals must provide technical input to be considered for advocacy recovery, including all fees and expenses.


Proposition 103 Helps Consumers
More than $100 billion has been saved by California drivers 25 years after the approval of Proposition 103. The November 2013 report found that our own California drivers had spent 0.3% less than what was originally spent on auto insurance in prior years. Apart from this proposition, Jones had ordered the department to condone more research back in January. Jones’ order included hosting regular reviews of insurance companies policy rates as a result of corporate tax cuts.


We Can Help
If you were the victim of an unfair insurance company, give our law firm a call. Here, our attorneys help assist in all types of unfair insurance claims, whether auto or property. Unlike other law firms, our trusted insurance claim attorneys can answer any questions you may have, as well as guide you through your legal matter. We can even help certain individuals pursue litigation if the matter escalates.


Your free, first-time, no-obligation consultation with a reputable Los Angeles Insurance Claims Attorney regarding your unique situation is available by calling:

888-529-3111 Monday-Friday, 24 hrs a day, 7 days a week.

— Michael Avanesian, Esq.
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