ANTHONY VICTORIA: For 91.9 KVCR News, I’m Anthony Victoria, and this is Economics IE. Today, I’m filling in as host for my colleague Madison Aument, so she can tell us about a race that is getting a bit more attention than usual for California’s insurance commissioner. It’s not the most exciting seat in this year’s midterms, but for Californians grappling with steep insurance costs and trouble getting home insurance at all? It’s an important one. Hey, Madison.
MADISON AUMENT: Hi, Anthony.
VICTORIA: Tell us what is the role of the insurance commissioner?
AUMENT: Yeah, the insurance commissioner has the power to regulate insurance companies and review their rates, but the office doesn’t have the power to change state law or decide where homes are built. This is the first time that two Democrats are facing each other for the race to be the state’s top insurance regulator.
VICTORIA: Interesting. So, who’s running for insurance commissioner?
AUMENT: Well, we’ve got State Senator Ben Allen, who represents Santa Monica and is terming out this year, who’s up against former San Francisco Supervisor Jane Kim. Allen served three terms in the state senate and represents a more centrist sect of the Democratic Party. U.S. Senators Adam Schiff and Alex Padilla have endorsed him. While Kim is running on a pretty progressive policy agenda, she’s been backed by Vermont Senator Bernie Sanders. Kim won 26.8 percent of the vote in the June primary, while Allen came in second with 19.6 percent.
VICTORIA: So, how do Allen and Kim’s plans for the job differ?
AUMENT: While both candidates are Democrats, they have very different ideas for the office. Allen, whose state senate district was devastated by the Palisades fire, says he wants to make the system work better.
BEN ALLEN, STATE SENATOR: I mean, the department can do more to speed up the rate reviews, bolster the enforcement division, speed up the entrance of new products into the market, so we can have more options for people.
AUMENT: He says private insurance companies should be part of the conversation. Allen says the best thing insurers can do for consumers is reward risk reduction with lower rates.
ALLEN: We need somebody in the commissioner’s office who’s going to know how to really push them hard to to to reward real risk reduction, and I think that’s ultimately going to be how we we we level things again and and and get and get rates under control.
AUMENT: Risk reduction includes things like home hardening to prevent homes from igniting during wildfires and being strategic about land use around wildfire-prone areas.
VICTORIA: And what about Kim? What are her plans?
AUMENT: Kim agrees that risk reduction is key, but she says she wants to challenge the status quo.
JANE KIM, FORMER SAN FRANCISCO SUPERVISOR: If the market does not want to continue to cover wildfire coverage, that we develop our own public nonprofit disaster insurance program that is guaranteed to every California homeowner currently.
AUMENT: She says they could take three to $5 billion from what insurance companies make on home insurance per year,
KIM: and we run it as a nonprofit program where dollars aren’t going to CEOs and shareholders, but instead getting plowed back into the community in the form of floodproofing, home hardening, and floodproofing things that actually drive down risk.
AUMENT: Allen’s pushed back on the feasibility of Kim’s plan and says the insurance commissioner has limited powers, but Kim says the status quo is costing Californians and that maybe it’s time for a change.
VICTORIA: Well, thanks for your reporting, Madison.
AUMENT: Thank you for wearing my Economics IE host hat today, Anthony.
VICTORIA: For KVCR News, I’m Anthony Victoria, and this is Econ IE. This segment is supported by the Nowak family.
