Lara opens insurance rate review process to unprecedented transparency

Protecting Californians from paying more than is required for insurance, the California Department of Insurance is establishing a new, voluntary, and fully transparent process for analyzing proposed insurance rates for personal and commercial lines prior to any approval under Proposition 103. The Comprehensiveness Review Regulation delivers on a core promise of the Sustainable Insurance Strategy to increase insurance options for Californians across the state.

"Every dollar Californians pay for insurance should be justified," said Insurance Commissioner Ricardo Lara, author of the Sustainable Insurance Strategy. "For the first time, consumers will be able to see how Department experts analyze insurance companies' rate requests, challenge unsupported assumptions, and prevent policyholders from paying more than the law allows. This regulation strengthens one of the most important safeguards protecting California families, homeowners, drivers, and businesses."

Billions saved — and full transparency going forward

The Comprehensiveness Review Regulation was approved by the Office of Administrative Law and today the Department posted the final regulation and statement of reasons to its public website. Under this enhanced regulatory process, the Department will be able to publicly release predicted rate savings achieved by its expert rate regulation staff — something unprecedented in its history.

Since 2019, the Department's annual robust review of hundreds of insurance company rate filings for property, commercial, and auto lines has saved consumers $6.6 billion. The new regulation ensures the public can see this work in action.

Over the past 35 years, rate review times have increased and recurring insurance availability crises have left consumers struggling to find available and affordable property coverage. This regulation directly addresses those problems: anticipating insurance companies will provide information upfront in the process, allowing the Department's review to move forward immediately with questions fully answered. The regulation complements the Department's Complete Rate Application Regulation which has been in effect since 2024, reducing delays due to incomplete information submitted by insurance companies before being publicly noticed.

The new "comprehensiveness review" process will be public — giving unprecedented access to the department's consumer protection actions before an insurance company formally files a rate application for review. Californians will be able to see exactly what the Department's analysis shows—including the dollar amounts saved and the issues flagged in each submittal. This level of transparency gives consumers direct visibility into the process that determines what they pay for coverage. The comprehensiveness review would be voluntary for insurance companies, who could choose to skip this optional step and move directly to a formal rate filing — in which case the department's current review process would still apply as it has for decades under Prop. 103.

Accountability across the board

As a key component of the Sustainable Insurance Strategy, this regulation reflects Lara's commitment to accountability for every party involved in the rate review process: The department's experts, insurance companies, and other participants alike. Together with the Commissioner's Complete Rate Application regulation, which requires insurance companies to provide comprehensive information upfront for a timely and thorough review, these reforms bring greater transparency, accountability, and efficiency to every stage of the rate review process under Prop. 103. This regulation also continues to support California's "intervenor" process, by which third parties who can prove they represent consumers' interests can be compensated in fees passed on to consumers in their rates.

The department's initial rate range indications would be completely public — compared to past third-party negotiations with intervenors that happen behind closed doors.

Consider a homeowner paying approximately $1,500 a year for property insurance, the statewide average cost, according to data from the National Association of Insurance Commissioners, which is well below other states. When a homeowner insurer explores a 5 percent rate increase, the department's review might reveal that the company's cost projections are inflated or that certain elements do not comply with California law. If an insurance company's proposed rate is too high or unjustified, the department's rate regulation experts will arrive at a lower rate indication, which the insurer would need to decide whether to take the department's figures or provide additional information to the department in order to substantiate their numbers.

"Government works best when people can see it working," said Lara. "This regulation shines a light on the rate review process and gives Californians a clearer understanding of how decisions are made, how insurance companies are held accountable, and how the Department protects the public interest. Greater openness builds confidence in the system and supports a stronger, more sustainable insurance market for everyone."

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