Will your insurance rates rise or fall?


Proposition 103 has been protecting insurance customers for 20 years . But on Friday the Insurance Department started looking at possibly changing the rules for setting rates.

Insurance rates in California have only inched up compared to elsewhere and consumer groups say it's because of the 1988 voter approved Proposition 103.

On Friday, the Insurance Department began looking at changes to regulations that could allow future rate increases by about half of the insurance companies in California.

"This would be a massive transfer of wealth from the pockets of the people of California into the pockets of people Poizner is helping by these proposals, the insurance companies," said Proposition 103 writer Harvey Rosenfield from Consumer Watchdog.

Rosenfield was in San Francisco to speak out against the changes proposed by Insurance Commissioner Steve Poizner. He was especially ticked because he endorsed Poizner in the 2006 election.

"He pledged he would not meddle with these regulations he would support and defend the formula that has produced billions of dollars in savings for the people of California, and here he is today attacking the formula," said Rosenfield.

The Insurance Department was taking a hard look at the proposals. The workshop was packed with insurance company representatives.

Commissioner Poizner was not there, but Rosenfield was. Among the biggest changes: insurance companies with high expenses could pass on more of their costs to consumers.

"We're trying to balance the need to come up with a system that will produce rates that the insurance companies will take to the market with the need to keep rates the lowest they can possibly be," said Deputy Commissioner Bill Gausewitz.

"There will be some winners and some losers. Provisions in these proposals will require some insurance companies to lower their rates. Other provisions will allow companies to more accurately reflect their costs in the rates they charge," said Association of California Insurance Companies President James Sorich.

Another proposal would let insurance companies reduce rates without any review by the department. That may sound good, but Rosenfield says it means less oversight -- he fears companies may not reduce rates enough to comply with the law.

"Insurance companies have to open their books publically and allow the consumers to challenge unjust and unfair rates," said Rosenfield.

This is just the beginning of what is bound to be a vigorous battle over how much insurance companies can charge you for home and auto insurance.

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