Consumer group accuses insurers of colluding on California exit
Consumer group accuses insurers of colluding on California exit | Insurance Business America
Insurance News
Consumer group accuses insurers of colluding on California exit
Insurers accused of coordinating to force the state to grant them greater latitude to raise rates
Insurance News
By
Ryan Smith
A consumer advocacy group is calling on California Attorney General Rob Bonta to investigate the spate of homeowner insurance exits in the state.
Several insurance companies have recently stopped selling homeowner policies in California, while others have placed restrictions on the policies they do sell.
In a letter to the state attorney general, advocacy group Consumer Watchdog alleged that insurance companies and their lobbyists colluded unlawfully to coordinate an exit from the state, according to a report by The San Francisco Standard. Such collusion would violate state and federal antitrust laws, Consumer Watchdog said.
The group alleges that insurers coordinated the exit in an attempt to force California legislators to grant them greater latitude to raise rates, the Standard reported.
“Consumer Watchdog believes that insurance companies are colluding to make insurance unavailable to California to boost the price of insurance and pressure policymakers to change California law to allow insurance companies to charge excessive rates,” the group said in its letter to Bonta.
Citing industry insiders, Consumer Watchdog claimed that the collusion took place during meetings of the Personal Insurance Federation of California and the American Property Casualty Insurance Association, two industry lobbying bodies.
The American Property Casualty Insurance Association hit back at the advocacy group in a statement to the Standard.
“Everyone understands that California’s insurance market is in a spiraling crisis that requires immediate policy solutions to protect consumer access to the coverage they need,” Jeffrey Brewer, public affairs division vice president with the lobbying organization, told the Standard. “It’s unfortunate that this organization is advocating against reasonable reforms and instead is pushing for the status quo that hurts consumers.”
Insurance companies have blamed the pullback on spiking wildfire risks, construction costs and difficulties in getting rate increases approved by the state legislature, The Standard reported.
Insurers’ complaints seem to be having an effect in Sacramento. According to a Politico report, California lawmakers are working on a plan to lure insurers back to the state by allowing them to hike rates.
Have something to say about this story? Let us know in the comments below.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
