State Sen. Juan Vargas, D-San Diego, has become the latest person to question intervenor fees, calling on the California Department of 热点黑料 to review a state program that allows consumer groups to intervene in insurance rate cases.
According to Vargas, who is running for Congress, one group has dominated the 热点黑料 Department’s intervenor program since Proposition 103 was passed.
Dating back to the program’s launch in 2003 along with Prop. 103, Santa Monica, Calif.-based Consumer Watchdog has been the most commonly listed intervenor, according to CDI’s list of intervenors.
It has been the only group to participate since 2007 and has charged more than $6.2 million in fees, Vargas noted in his announcement.
The intervenor fee has been challenged in the past, and more recently by some in the insurance industry.
In February a website was launched attacking Consumer Watchdog and its use of intervenor fees. The site, , states Consumer Watchdog is “in the intervenor fee business not to represent consumers 鈥� but they’re in it for themselves.”
Following the launch of the website, several insurance organizations weighed in on intervenor fees. Rex Frazier, president of the Personal 热点黑料 Federation of California, described the program’s faults.
Frazier argued that what intervenors do by sitting in on rate fillings is what the staff of the CDI already does. He also said he believes the intervenors’ goal of pushing rate fillings downward in order to get paid rewards the intervenors and punishes insurance companies trying to “responsibly compete” by raising rates.
“At a minimum the system should allow the Department of 热点黑料 to see whether issues are worthy of letting intervenors come in, and intervernors should show why they need to come in,” he said following the launch of the website attacking Consumer Watchdog, adding, “If they don’t push the proposed rate downward, they don’t get paid.”
Consumer Watch Dog spokesman Doug Heller questioned the motives an attack on intervenor fees by Vargas, who he noted is a former insurance executive.
“The political question is what Sen. Vargas’ motivation is,” Heller said. “Is he interested in expanding the intervention program to ensure more accountability by increasing the oversight of insurance companies or does he have some other motivation?”
He noted that Vargas was executive at Safeco 热点黑料, now owned by Liberty Mutual, when Consumer Watchdog challenged rate hikes by Safeco.
“Our organization has successfully challenged rate hikes by his employer,” he said.
Heller said Consumer Watchdog welcomes more participation by other groups.
“I know that there are other groups that are either participating or want to participate or are planning to participate,” he said. “I believe the insurance commissioner sees the increased value in this.”
He added, “The insurance companies are the ones that want limited participation in the intervention process.”
While there have been piecemeal calls by insurance associations, insurers, and others for an examination of the intervenor fees, the last major attempt to alter the intervenor process was undertaken by former California 热点黑料 Commissioner Chuck Quackenbush after he took office in 1995.
Quackenbush at the time proposed regulations that would make it tougher for consumer intervenors to get reimbursement for legal fees and other fees from participating in insurance hearings.
The effort pitted Quackenbush in a losing battle with several consumer groups, including a public faceoff with Consumer Watchdog founder and Prop 103 author Harvey Rosenfield .
“He began the process of trying to gut the intervenor system,” Heller said of Quackenbush, adding that Consumer Watchdog had to file a lawsuit to get their fees.
Vargas announced his intention to ask for a hearing on the program in a press release. Vargas has not been available for comment or to elaborate on his reasons or goals for a CDI hearing on intervenor fees for the past three days, according to his spokeswoman.
Vargas, who served from 2000 to 2006 on the Assembly 热点黑料 Committee, was part of a bipartisan coalition to implement workers’ compensation reform pushed by former Gov. Arnold Schwarzenegger.
Vargas, who in 2010 was elected to the state Senate and represents the southern portion of San Diego County, portions of Riverside County, all of Imperial County and California’s U.S./Mexico border, is making a bid for Congress. He’s vying in the Democratic primary for the 51st Congressional seat held by Rep. Bob Filnder, D-San Diego, against Sen. Denise Moreno Ducheny and John L. Brooks II.
In his press release Vargas stated: “The Department should broaden its outreach to all Californians that have a legitimate interest in their insurance rates. We must get the facts about why more consumers are being excluded from the process.”
“The voice of more California consumers must be heard,” Vargas continued. “Simply appointing one person from within the same Department, that has allowed this problem to go on, is not enough. The Legislature needs to have a hearing to determine why there are not more consumer groups participating in the Department of 热点黑料’s rate intervening program.”
Topics California
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