Proposition 103, passed by California voters in 1988, established a prior approval system for property and casualty insurance rates. This requires insurers to obtain approval from the California Insurance Commissioner before implementing rate changes. It includes mechanisms for public participation, notably through intervenors and formal hearings often conducted by the Administrative Hearing Bureau (AHB) within the California Department of Insurance (CDI).
The intervenor process allows members of the public (typically consumer advocacy groups or representatives) to participate in rate review proceedings. This is authorized under Proposition 103 to ensure consumer interests are represented in rate-setting. This process promotes transparency and public oversight but has been debated, with some viewing it as delaying approvals or adding costs, while supporters see it as essential for consumer protection. Recent reforms (proposed in 2025 and amended in early 2026) aim to increase transparency, streamline procedures, clarify compensation standards (e.g., shifting from subjective “vexatious” to objective “wasteful” criteria), impose timelines, and enhance oversight.
Consequently, the California Insurance Commissioner just released the amended text of proposed regulations, first proposed in 2025, to modernizing California’s intervenor and Administrative Hearing Bureau processes under Proposition 103 – reforms designed to increase transparency, improve efficiency, and ensure that every dollar in the rate review process serves the public interest. The amended text is now available for public comment. The amended text reflects months of stakeholder engagement and public input.
Pursuant to state law, the amended text is now available for an additional 15-day public comment period. All changes are clearly identified, and supporting materials have been added to the rulemaking file to ensure full transparency.
The updated regulations:
– – Clarify prospective application so new rules apply moving forward, ensuring fairness and consistency in current ongoing proceedings.
– – Replace the prior “vexatious” standard with an objective “wasteful” standard for fee determinations focusing on whether work advances the issues in a proceeding, rather than subjective intent.
– – Strengthen scrutiny of excessive billing on a task-by-task basis.
– – Increase public access to rate proceeding documents by requiring timely online posting of pleadings, hearing calendars, and decisions.
– – Establish firm timelines and regular status updates from administrative law judges to reduce unnecessary delays.
– – Clarify definitions and procedural rules to streamline hearings and reinforce the Commissioner’s authority under Prop. 103.
These reforms are designed to uphold one of the core purposes of Prop. 103 – meaningful public participation – while ensuring that the process remains efficient, balanced, and focused squarely on consumer and ratepayer benefits.
These reforms are part of the Commissioner Sustainable Insurance Strategy – what he claims is “the most comprehensive overhaul of California’s insurance regulations in over 30 years – aimed at stabilizing the market, expanding availability, and ensuring a modern, resilient insurance system that works for all Californians.”