California insurance department submits Prop 103 rulemaking package for final review

The California Department of Insurance (CDI) has submitted its Intervenor and Administrative Hearing Bureau Fairness and Accountability rulemaking package to the Office of Administrative Law (OAL) for final review, which it says marks the most significant modernization of the intervenor system since Proposition 103 was enacted in 1988.

Under Proposition 103, the insurance commissioner is responsible for ensuring that consumers don’t pay more to insurance companies and intervenors than is legally justified.

The reforms strengthen transparency, improve efficiency, and protect consumer dollars in the insurance rate review process. Once approved by OAL, the regulations will establish clear standards for intervenor compensation, expand public reporting, and reinforce CDI’s authority to ensure that every dollar in the rate review process serves the public interest.

“These reforms strengthen Proposition 103 by bringing long-overdue transparency and accountability to every part of the rate review process,” said Commissioner Ricardo Lara in an April 20 press release. “Californians deserve to know that every dollar in this system is protected, and I will not allow any organization — insurer or intervenor — to operate without clear guardrails.”

The release states that key provisions of the regulations include:

• • “Clarifying ‘substantial contribution’ and reasonableness standards for an intervenor’s request for compensation;
  • “Defining the role of the Department’s Administrative Hearing Bureau (AHB) in settlement agreements and requests for compensation;
  • “Requiring regular status updates from AHB Administrative Law Judges every 30 days to all parties;
  • “Expanding public reporting by posting intervenor activity and statistics on the Department’s website; and
  • “Improving public access to proceedings through the required posting of AHB calendars, dockets, and documents.”

The reforms follow months of public engagement, including a 45‑day comment period, written and oral testimony, and a subsequent 15‑day comment period on targeted revisions, CDI says. Input from consumer advocates, insurers, legal experts, and members of the public informed the final proposal.

“Several organizations representing homeowners, farmers, builders, and small businesses expressed strong support, calling the reforms ‘a crucial step toward restoring balance, reducing unjustified delays, improving transparency, and protecting access to coverage,’” the release states.

Lara also addressed “mischaracterizations” raised by opponents during the rulemaking process.

“Some groups have misrepresented these reforms as limiting consumer voices. That is simply false,” Lara said in the release. “The right to intervene remains untouched. What changes is the expectation that compensation must be earned, documented, and aligned with the issues in the proceeding.”

According to CDI, from 2019-2025, the department’s expert review saved Californians $6.6 billion in premiums and secured $3.3 billion in refunds for drivers during the COVID‑19 pandemic.

“Accountability is not optional,” Lara added in the release. “Transparency is not an attack. It is the foundation of public trust, and these reforms ensure that every part of the system is accountable to the Californians it serves.”

CDI says the reforms are a central component of Lara’s Sustainable Insurance Strategy, aimed at “stabilizing the market, expanding coverage options, and building a modern, resilient insurance system.”

OAL has up to 30 working days to complete its review. Once approved, the regulations will be filed with the Secretary of State and take effect shortly after, according to CDI.

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Lara proposes regulations to strengthen Prop 103 rate review and intervenor processes