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CA Department of Insurance

Department of Insurance responds to Consumer Watchdog

News: 2014 Press Release

For Release: January 29, 2014
Media Calls Only: 916-492-3566
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Department of Insurance responds to Consumer Watchdog
SACRAMENTO, Calif. -"After a public hearing in which Consumer Watchdog was given the opportunity to present its arguments to an administrative law judge, the judge upheld the settlement allowing Allstate to have separate rates for affinity groups and found that the settlement was fundamentally fair, adequate, and reasonable. The affinity groups in the Allstate rate filing included homeowners and condo associations, alumni associations, professionals and members of Allstate's Motor Club. By adopting the judge's proposed decision in this case, the Insurance Commissioner rejected Allstate's original request for a 6.1 percent rate increase and instead required Allstate to reduce its rates by an overall .20 percent. The ALJ's decision to allow Allstate's affinity groups was consistent with prior rate approvals for other California insurers-some of which have used affinity groups for many years. In several of those prior rate applications, Consumer Watchdog agreed to settlements including affinity groups. Contrary to Consumer Watchdog's assertion, no group subsidizes any other groups. The department will consider Consumer Watchdog's petition."

Department of Insurance

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Media Notes: Groups are not rating factors, but rather have been permitted under the insurance code noted: 1861.12. Group Insurance Plans. Any insurer may issue any insurance coverage on a group plan, without restriction as to the purpose of the group, occupation or type of group. Group insurance rates shall not be considered to be unfairly discriminatory, if they are averaged broadly among persons insured under the group plan.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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