According to analyses from organizations such as the International Law and Economics Center (ILEC), California leads the nation in “rate suppression,” a phenomenon where insurance premiums are artificially kept below actuarially sound levels. This disconnect has led to an unsustainable market in which companies cannot break even, prompting many to exit altogether.
Additionally, Proposition 103 imposed an electoral process for the insurance commissioner role, further politicizing rate setting. Few elected officials are willing to back measures that raise costs for voters, even when necessary to stabilize the market.
