Assembly Bailout Plan Codifies Bad Lara Regulations That Cost Consumers $562 Million And Created Only 10,000 New Homeowners Policies; Locking In Rate Hikes, Says Consumer Watchdog

SACRAMENTO, Calif., Aug. 27, 2026 /PRNewswire/ -- An Assembly working group document recommends codifying failed Department of Insurance regulations that allow home insurance companies to raise rates based on black box climate models without having to cover more homeowners. Putting the regulation into statute could prevent a newly elected insurance commissioner from fixing their defects. 

To date, Commissioner Ricardo Lara's failed Sustainable Insurance Strategy (SIS) regulations have resulted in $562 million in increased rate requests and only 10,000 new homeowners insurance policies, according to Consumer Watchdog's tracking. (Available on request.)

A New York Times front page investigation, "California Promised Insurance Relief But Delivered Loopholes," explained how the regulations have huge loopholes that allow companies to raise rates without covering more people, despite their promise to do so.

Since the regulations were announced nearly three years ago, enrollment on the FAIR plan has more than doubled – climbing from 320,581 to 675,229 policyholders.  

The Assembly plan is part of an end-of-session deal with the Governor that would need to pass before Monday and no language has been put in print. 

"This outrageous power grab would lock in higher insurance premiums without the increased coverage policyholders were promised in exchange for higher rates," said Jamie Court President of Consumer Watchdog. "Tying the hands of the next insurance commissioner to fix these loophole-ridden regulations would be a slap in the face to beleaguered homeowners. This type of power grab could only happen in an end-of-session deal because it would not withstand the light of day. This recommendation is the poster child for why end-of-the session bailouts always hurt consumers and benefit industry."

Consumer Watchdog said the legislation would be an illegal amendment to Prop 103.  Courts have stated only the commissioner can issue regulations, not the legislature, and only regulations that do not conflict with Prop 103.

"The plan overrides the protections of Proposition 103, violates the California Constitution and is a betrayal of the voters," said Harvey Rosenfield, the founder of Consumer Watchdog and the author of insurance reform Proposition 103. 

SOURCE Consumer Watchdog