1988 California Proposition 103

Ballot initiative for insurance rate adjustments June 2023 Proposition 103 Insurance Rate Reductions and Regulation Initiative California 4844312 4630752 File:1988 California Proposition 103 results map by county.svg County results For #7D9CBB 60%–70% 1px #AAAAAA solid #B6C8D9 50%–60% 1px #AAAAAA solid Against #8B8B54 70%–80% 1px #AAAAAA solid #BCBC83 60%–70% 1px #AAAAAA solid #DEDEBD 50%–60% 1px #AAAAAA solid Proposition 103, titled Insurance Rate Reduction and Reform Act, was a California ballot proposition voted on in the 1988 California General Election. It passed with 51% of the vote on November 8, 1988. Ralph Nader (2004). In Pursuit of Justice: Collected Writings 2000-2003. Seven Stories Press. pp. 240–. 978-1-58322-629-2. Proposition 103 expanded the regulatory capacities of the California Department of Insurance, especially in property and casualty insurance. The ballot measure required insurers to reduce their rates by at least 20 percent.CA Ins Code § 1861.01 (2023) In addition, the act expanded the Department's responsibility for enforcement to include: property insurance, automobile insurance, life insurance and other types of casualty coverage, requiring that the Department approve rates submitted by insurers prior to their taking effect.CA Ins Code § 1861.05 (2023) The law also made the California Insurance Commissioner an elected position (previously being a governor-appointed position).Fredrick C. Harris; Robert C. Lieberman (30 June 2013). Beyond Discrimination: Racial Inequality in a Post-Racist Era. Russell Sage Foundation. pp. 280–. 978-1-61044-817-8. Proposition 103 devised a process enabling consumer participation in the setting of insurance rates, and allowed consumer "intervenors" witness fees and expenses in some cases.J. David Cummins (23 June 2004). Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency. Brookings Institution Press. pp. 196–. 978-0-8157-9841-5. Insurance regulation Insurance types regulated by Proposition 103 are: Personal automobile, dwelling fire, earthquake, homeowners, inland marine, and umbrella; Commercial aircraft, automobile, boiler and machinery, burglary and theft, business owners, earthquake, farm owners, some fidelity, fire, glass, inland marine, medical malpractice, miscellaneous, multi-peril, other liability, professional liability, special multi-peril, umbrella, and coverage under the Longshore and Harbor Workers' Compensation Act.Dergler Jon Insurers Question California Commissioner's Authority to Make Comp Writers Report Federal Tax Savings https://www.insurancejournal.com/news/west/2018/07/02/494057.htm Insurance Journal 2 July 2018 4 September 2018 According to the California Insurance Commissioner, Proposition 103 "has saved consumers billions" since being implemented, specifically a $4.29 billion per year dividend.Kamisher Eliyahu Reyes Max Carson Biz 2023-06-02 It's not just State Farm. Allstate no longer sells new home insurance policies in California https://www.latimes.com/business/story/2023-06-02/allstate-state-farm-stop-selling-new-home-insurance-in-california 2023-06-03 Los Angeles Times en-US Bloomberg It also claims "Californians spent 0.3% less on auto insurance in 2010 than they spent in 1989, while the nation spent 43.3% more". The Commissioner quotes a 2013 report of the Consumer Federation that more than $100 billion had been saved by consumers in the 25 years after passage.Information Sheet: Proposition 103 Intervenor Process http://www.insurance.ca.gov/01-consumers/150-other-prog/01-intervenor/info.cfm insurance.ca.gov 4 September 2018Daniels Jeff Why California's big fire losses this year won't mean massive insurance rate hikes in 2018 https://www.cnbc.com/2017/12/07/californias-big-fire-losses-in-2017-wont-mean-huge-insurance-hikes-in-2018.html CNBC 7 December 2017 4 September 2018 Intervenors Investigatory and regulatory hearings are open to intervenors. Members of the public or organizations can observe or may attend the hearing and request to be heard, submit written comments or present live testimony. Attorney fees can be reimbursed when written comments are submitted that "make a substantial contribution within the time frame in the notice".Impact Analysis of Weighting Auto Rating Factors to Comply with Proposition 103. Office of Policy Research, California Department of Insurance. 1994. Election With $207 million spent, the most expensive election campaign in U.S. modern history was the 1988 California insurance initiatives election battle. Once Prop. 103 won voter approval. The $207 million spent, in 2020 dollars adjusted for inflation, which was $95 million in 1988, was reported by the Los Angeles Times.See "$23 a Vote, Insurers Spent $55.87 on Prop. 104," by Leo C. Wolinsky, Los Angeles Times, Mar. 31, 1989, p. 3 and p. 23. Opponents of Prop. 103 spent over $200 million trying to defeat it or trying to pass competing initiatives. Prop. 103 raised $6.4 million in small donations of about $30 from a statewide door-to-door canvass. These small donations from the canvass paid for the modest offices and canvasser salaries, which going into the election reached one million households. TV ads for Prop. 103 were run at no cost by TV stations only due to the fairness doctrine in place at the time, with some equal-time ads. These ads were in response to the tens of millions of dollars being spent by the insurance industry, which also used large direct-mail campaigns, coordinated by consultant Clint Reilly, who acknowledged the efforts against Prop. 103 by insurance companies lacked a lot of public support. With $200 million spent among the other initiatives, both pro and con, however, it came down to the wire, with Prop. 103 winning by only 1%, with a 51% yes vote. The campaign, and its results, received extensive national attention. Court challenges were turned down, and the California Supreme Court upheld every provision of 103. "Three other insurance measures--Proposition 104, the industry's no-fault proposal, Proposition 100, backed by the state's trial lawyers, and Proposition 101, ... sponsored by dissident insurer Harry Miller,--all were overwhelmingly defeated," reported Kenneth Reich, the L.A. Times staff writer who covered the insurance industry and this election. Reich wrote "But Proposition 103 campaign chairman Harvey Rosenfield suggested that if the insurance industry was in trouble with the public, it had only itself to blame."https://www.latimes.com/archives/la-xpm-1988-11-09-mn-266-story.html Voters Splitting Evenly on Nader's Prop. 103 1988-11-09 Los Angeles Times en-US 2020-01-28 Criticism In the aftermath of the devastating January 2025 Southern California wildfires, Steven Greenhut of the R Street Institute harshly criticized Proposition 103 for pushing the state's property insurance system to the brink of collapse by imposing a "byzantine" system of price controls which had already caused most insurers to flee the state because it was impossible for them to earn a profit.Greenhut Steven How Policy Helped Create California's Insurance Crisis https://www.city-journal.org/article/what-led-to-californias-insurance-crisis City Journal January 16, 2025 In arguing for the imposition of conditions on the release of federal aid to California wildfire victims, U.S. Senator Ron Johnson (R-WI) criticized the "moral hazard" inherent in California's "laws where they made it very unattractive for private insurers to come in and actually insure their properties and assess the risk properly" and thereby "encouraged people to build multimillion ... homes and complexes in very vulnerable areas".Inskeep Steve Steve Inskeep Guevara Milton Republican Sen. Ron Johnson says fire aid to California should come with conditions https://www.npr.org/2025/01/15/nx-s1-5259669/california-wildfires-aid-republicans Morning Edition January 15, 2025 Reuters reported that California's price controls were so effective that before the Palisades Fire, insurance costs in Pacific Palisades, California (which was mostly wiped out) were cheaper than in 97% of all ZIP Codes in the United States.Sullivan Andy Pacific Palisades fire may spell an end to cheap homeowners insurance in California https://www.reuters.com/world/us/pacific-palisades-fire-may-spell-an-end-cheap-homeowners-insurance-california-2025-01-09/ Reuters January 9, 2025 Kelsey Piper of Vox identified those price controls as one of several examples of incompetent governance before and during the wildfires that were leading Californians to the sinking realization that "no matter how bad things get, the real grown-ups can’t be called in to save the day because they don’t exist".Piper Kelsey Kelsey Piper There are no grown-ups in California https://www.vox.com/future-perfect/395335/wildfires-california-gavin-newsom-insurance-housing Vox January 17, 2025 See also California FAIR Plan References 103 Category:Insurance legislation Category:California law