CDI’s new Prop 103 regulations now in effect

The California Department of Insurance (CDI)’s new Prop 103 regulations are now in effect, which, Insurance Commissioner Ricardo Lara says, modernize the state’s insurance rate review process and strengthen consumer protections.

“These reforms increase public access to information, establish clearer standards for intervenor participation, and ensure stronger oversight of costs that can ultimately be paid by policyholders,” a CDI press release states.

Lara added: “These reforms put the power of transparency directly into consumers’ hands, where it belongs. Every dollar matters for Californians who are struggling to find and afford insurance. They have a right to know who is participating in rate proceedings, what costs are being requested, and how those costs impact the premiums they ultimately pay.”

The CDI says the new “Administrative Hearing Bureau and Intervenor Fairness and Accountability” regulation represents the most significant modernization of California’s insurance intervenor process since voters approved Proposition 103 in 1988.

“The regulation strengthens transparency, improves accountability, and enhances public confidence in California’s insurance rate review system by establishing clearer standards for intervenor participation, documentation, and compensation requests,” the release states. “It also improves public access to information about pending administrative hearings, including regular status updates in rate filing proceedings to promote greater understanding of public processes.”

Lara added that “transparency cannot apply to only one part of the process.”

“We are holding every participant accountable — insurance companies, intervenors, and the department itself — because consumers deserve a fair, modern, and fully transparent insurance marketplace,” he said. “These reforms strengthen oversight, not limit participation, and ensure that consumer dollars are protected at every step.”

The CDI notes the urgency of the reforms is underscored by the recent State Farm General rate proceeding, in which Consumer Watchdog joined a three‑party settlement supporting an average 17% rate increase for State Farm homeowners’ policyholders.

“Consumer Watchdog may later seek intervenor compensation for its participation, as authorized under Proposition 103,” the release states. “If a compensation request is submitted and approved, the award could be paid by State Farm policyholders under existing law. Future rate applications and any future requests for compensation submitted under the new regulation will be reviewed under the department’s enhanced transparency, accountability, and qualification standards now in effect.”

The department says it sent letters to all currently certified intervenors notifying them that parties seeking compensation funded by policyholders may be required to answer additional questions and provide supplemental documentation demonstrating compliance with the new requirements. This includes disclosure of funding sources and potential conflicts of interest. Petitions recently granted by CDI will be subject to the applicable requirements, according to the release.

CDI says all actions on intervenor compensation requests will continue to be posted publicly.

CDI found that, from 2013 to 2026, intervenors received more than $14.4 million in compensation for their participation in rate filings.

“The department’s record during Commissioner Lara’s tenure demonstrates the importance of rigorous regulatory oversight,” the release states. “From 2019 through 2025, the department’s expert review of insurance rate filings saved Californians $6.6 billion in premiums and secured $3.3 billion in refunds for drivers during the COVID‑19 pandemic.

“Earlier this year, after a rigorous review by department rate regulation experts, a homeowners insurance rate request from Farmers Insurance was reduced from 6.9% to approximately 1.5%. That reduction, achieved through the department’s independent rate review process, resulted in significant consumer savings without requiring policyholders to pay intervenor compensation costs.”

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