<\/p>\n
California needs someone to competently guide insurance system reforms and patch shortcomings as they arise. Patrick Wolff can do it, the editorial board says.<\/p>\n
Yalonda M. James\/S.F. Chronicle<\/p>\n
California insurance commissioner used to be considered a cushy landing pad for politicians to collect a paycheck while building statewide name recognition.\u00a0<\/p>\n
That\u2019s because recent deadly wildfires exposed a crisis hiding in plain sight.<\/p>\n
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Insurance premiums in California hadn\u2019t sufficiently risen to account for climate change, poor forest management and development in fire-prone areas. Proposition 103, a voter-approved 1988 measure, established an onerous process<\/a> for raising rates in the name of consumer protection.<\/p>\n Insurers begrudgingly stayed quiet for years. But when devastation from\u00a0megafires revealed how unable they were to adequately price risk, they\u00a0stopped renewing policies<\/a>, restricted new business<\/a> or left<\/a> the state entirely<\/a>.<\/p>\n San Francisco Chronicle Logo<\/p>\n Make us a Preferred Source to get more of our news when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n Everything from home mortgages to affordable housing development<\/a> was thrown into chaos. Desperate homeowners fled to the state\u2019s Fair Access to Insurance Requirements Plan, which offers pricey, bare-bones coverage to people who can\u2019t find it anywhere else.\u00a0<\/p>\n Article continues below this ad<\/p>\n Private insurers are responsible for claims that the FAIR Plan can\u2019t cover, so\u00a0they restricted coverage<\/a> even further.<\/p>\n The Chronicle editorial board has begun rolling out its endorsements for California\u2019s June primary election. In the weeks to come, we will publish our assessments of all the state races, including the governor\u2019s race, plus local races and ballot measures. To read more about how the editorial board makes its election endorsements, go here<\/a>.<\/p>\n Plus: Look out for the Chronicle\u2019s Voter Guide to publish in early May as ballots get mailed out across the Bay Area.<\/p>\n To slow this spiral, Insurance Commissioner Ricardo Lara enacted a series of emergency reforms<\/a> in late 2023 to give insurers more of what they want.\u00a0<\/p>\n The January 2025 wildfires in Los Angeles County offered a test.<\/p>\n Article continues below this ad<\/p>\n While no insurers went insolvent or fled the state, Chronicle investigations revealed that homeowners affected by the fires often struggled to get claims paid, while insurers pervasively underinsured homes<\/a> and often balked at cleaning up smoke contamination<\/a>.\u00a0<\/p>\n Some insurers<\/a> have recently started to\u00a0write new policies<\/a>, although not enough yet to meaningfully depopulate the FAIR Plan.\u00a0A New York Times investigation<\/a> found that Lara\u2019s reforms allowed insurers to cherry-pick coverage to avoid high-risk homes.<\/p>\n In short, California\u2019s insurance market still has serious structural weaknesses.<\/p>\n With Lara termed out, 11 candidates<\/a> are running in the June primary election to fix the state\u2019s problems.\u00a0\u00a0\u00a0<\/p>\n The most aggressive is former San Francisco Supervisor Jane Kim, the California director of the Working Families Party, who wants to effectively blow up the system by establishing a state-run single-payer disaster insurance program with guaranteed coverage. She would also require insurers to pay interest on delayed or underpaid claims and push the state to offer guaranteed health care coverage for children.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cWe should start acting like the big state that we are,\u201d she told us in an endorsement interview. \u201cI don\u2019t actually believe the insurers want to exit our market.\u201d<\/p>\n While this tough talk might sound good in TV ads, Kim\u2019s approach reflects the same flawed thinking that arguably pushed California into its crisis. And her proposals are almost certainly dead on arrival \u2014 the fiercest consumer advocacy group, Consumer Watchdog, opposes the disaster insurance idea<\/a>.<\/p>\n Instead of picking unnecessary political fights, California\u2019s next commissioner needs to balance holding insurers accountable while keeping them happy enough to write policies that get people off the FAIR Plan. This means conveying to Californians that rates still need to rise in the short term\u00a0\u2014 while pushing lawmakers to invest in the risk mitigation measures like home hardening and defensible space<\/a> needed to bring costs down in the long term.<\/p>\n We trust two candidates to do that.<\/p>\n State Sen. Ben Allen, a Santa Monica Democrat who represents the Palisades, is widely regarded as a thoughtful lawmaker who takes the time to understand all sides of an issue. As someone who witnessed the devastation wrought by the Los Angeles fires and the roadblocks to rebuilding, Allen has unique insight into the insurance market\u2019s strengths and weaknesses. Accordingly, he\u2019s authored important consumer-protection laws\u00a0\u2014\u00a0including one<\/a> requiring insurers to increase upfront payment for personal property claims without residents first having to submit a detailed home inventory\u00a0\u2014 and is working on\u00a0bills<\/a> to provide low-interest loans for risk-reduction projects and help homeowners keep their coverage<\/a> if they mitigate insurer-identified risks.\u00a0<\/p>\n Article continues below this ad<\/p>\n Allen is an experienced legislator capable of pushing big reforms through the state\u2019s bureaucracy as needed. But experts we spoke with suggested that Lara\u2019s reforms still need time to fully bake. California needs someone to competently regulate the new system before we can fully understand and patch its shortcomings.<\/p>\n That\u2019s exactly what Democrat Patrick\u00a0Wolff, a financial analyst and American chess grandmaster, is proposing to do. Wolff knows California insurance regulations better than any other candidate: He not only built an auto and home insurance brokerage but also obtained his insurance license before entering the race<\/a>.\u00a0<\/p>\n Instead of immediately reinventing the system, Wolff wants to do the hard work of making it run well. In an endorsement interview, he told us that California insurance commissioners have historically focused on\u00a0micromanaging every rate filing instead of regulating insurers\u2019 broader market conduct\u00a0\u2014 whether they\u2019re appropriately underwriting policies and effectively handling claims. He also committed to following the 60-day timeframe<\/a> established by Prop 103 in which\u00a0certain rate change requests are deemed approved. The department has historically required insurers to waive that provision, often leading to requests being stuck in limbo for months.\u00a0<\/p>\n Wolff\u2019s mission is to \u201creform the credibility of the office itself\u201d\u00a0\u2014 which is desperately needed after Lara\u2019s history of ethical scandals<\/a> and jetting off on lavish trips with oft-undisclosed funders<\/a>.<\/p>\n While Wolff doesn\u2019t have prior political experience, we\u2019re convinced his\u00a0deep understanding of insurance and financial markets, as well as his evident passion for the work, will go a long way toward getting stakeholders on board.<\/p>\n \u201cWhat we need to do is just have the courage to think a little bit differently\u00a0\u2014 that this role can actually have someone who\u2019s really qualified and really just wants to do the job as opposed to somebody who views this as a stepping stone or as a platform for an ideological agenda,\u201d Wolff told us.\u00a0<\/p>\n We agree. Wolff deserves your vote.<\/p>\n Other top contenders include Republican Merritt Farren, a former attorney for Disney and Amazon whose home burned down in the Palisades fire\u00a0\u2014 prompting him to become a consumer advocate and intervene in a State Farm rate case<\/a>; former state Sen. Steven Bradford, a Gardena (Los Angeles County) Democrat who pledged to use \u201cmore of the carrot than the stick\u201d to lure insurers back to the state; and Stacy Korsgaden, a Republican licensed insurance agent whose deep industry knowledge sometimes takes an odd back seat to her pledges to be \u201ctough on crime.\u201d<\/p>\n The editorial positions of The Chronicle, including election recommendations, represent the consensus of the editorial board, consisting of the publisher, the editorial page editor and staff members of the opinion pages. Its judgments are made independent of the news operation, which covers the news without consideration of our editorial positions.<\/p>\n Also running is Eduardo \u201cLalo\u201d Vargas<\/a>, a high school teacher and Peace and Freedom Party candidate, and Keith Davis, an American Independent Party candidate and licensed insurance agent.\u00a0<\/p>\n Republicans Sean Lee, a financial services executive; Eric Thor Aarnio, a contractor; and Robert Howell, a cybersecurity company CEO, didn\u2019t respond to our interview requests.\u00a0<\/p>\n Reach the Chronicle editorial board with a letter to the editor:www.sfchronicle.com\/submit-your-opinion<\/a>.\u00a0<\/p>\n