Consumer Watchdog Praises Ruling Upholding Public Access and Proposition 103 Transparency
An Administrative Law Judge today issued a series of rulings in State Farm's pending rate case that strengthen transparency and consumer protections under Proposition 103. The Court denied the Department of Insurance's request, supported by State Farm, to move pre-hearing matters behind closed doors; rejected the Department's effort to postpone consideration of State Farm's wildfire claims-handling practices until after a rate ruling; required State Farm to disclose its expert witnesses; and granted in part intervenor Farren's discovery requests.
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The judge's order on public access makes clear that in-person hearings are a cornerstone of Proposition 103's transparency and public participation requirements. It emphasizes that hearings under California's voter-approved insurance reform law are meant to be conducted in public view to ensure fairness, accountability, and meaningful consumer oversight.
In opposing the request, Consumer Watchdog argued that remote-only hearings would have “curtailed in-person attendance and effectively converted a public proceeding into a closed session,” contrary to law. The judge agreed, finding:
— Proposition 103 mandates public access and has historically required in-person hearings to ensure transparency.
— The Department's concerns were vague and not sufficient to override statutory protections.
— Convenience cannot outweigh the public's right to see and participate in the process that sets their insurance rates.
“This is a victory for consumers and open government,” said Harvey Rosenfield, founder of Consumer Watchdog and author of Proposition 103. “Proposition 103 was designed so that rate hikes happen in public, not behind closed doors. Today's ruling keeps that promise.”
Today's hearing also addressed a critical issue that has been continually raised by Los Angeles wildfire survivors: at the same time State Farm is demanding an unprecedented financial bailout from its customers, there are widespread reports that it is refusing to pay LA wildfire claims promptly and fully. Instead of addressing this directly, the Department of Insurance, which supported the interim rate increase, asked the judge to prioritize consideration of State Farm's latest $1.19 billion rate hike request, and defer review of the rate impact on State Farm's claims handling ractices until later. Consumer Watchdog opposed the request, arguing that claims handling is integral to ratemaking and cannot be separated from the proceeding. Administrative Law Judge Karl Seligman agreed, adopting a tentative ruling that warned splitting the hearing “could easily result in chaos and challenges as to appropriateness on numerous grounds that would only operate to cause delay.”
The Court also required State Farm to disclose the identity of its expert witnesses, ensuring that testimony can be properly evaluated, and granted in part intervenor Farren's discovery requests to allow relevant evidence to be developed.
Consumer Watchdog is challenging State Farm's applications for significant homeowner insurance rate increases amid widespread policyholder complaints and unresolved wildfire claims.
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SOURCE Consumer Watchdog
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