History of Rate Reductions Recounted by Calif. Car Insurance Regulator

California Insurance Commissioner Steve Poizner

California Insurance Commissioner Steve Poizner speaks at a press conference. (Photo Courtesy of the California Department of Insurance)

As California Insurance Commissioner Steve Poizner’s term in office comes to a close, the state’s highest-ranking auto insurance regulator is touting his record of rate-reductions for Golden State drivers. According to his department, Poizner has approved almost $1.3 billion in auto premium reductions since first taking office in January 2007.

The announcement came shortly after the news of a $72-million reduction in premium prices for Mercury policyholders statewide, which was only the latest in a long string of rate cuts.

As with the change to Mercury premiums, a number of the $1.3 billion in reductions have been spurred by Poizner’s rejection of premium increases initially proposed by California auto insurance companies.

This function — overseeing the formulas that car insurance providers use to set rates — has come to be one of the most important of the commissioner’s responsibilities.

During his career, Poizner and his office have reviewed rating formulas in order to make sure that they do not charge excessive prices for coverage and that they do not violate the restrictions placed on the make-up of rating formulas that were outlined in voter-approved Proposition 103.

Prop. 103 established a hierarchy of driver factors and placed restrictions on how much weight an insurer could attach to each factor.

While some insurers would prefer to, say, place greater weight on the average size and frequency of claims filed by drivers in a policyholder’s geographic location than on a poicyholder’s driving history, Prop. 103 stops California insurers from doing so, and it is part of the commissioner’s job to see that they don’t.

The next person to oversee the Golden State’s coverage industry will be Assemblyman Dave Jones, who takes office in 2011.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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