Harvey Rosenfield has been been fighting the insurance industry for more than three decades.
And these days, with insurance companies canceling policies and threatening to leave California, the Consumer Watchdog founder feels like it’s 1988 all over again.
That’s the year he authored Proposition 103 to protect consumers from skyrocketing insurance rates, and he and his mentor Ralph Nader, already a famous consumer advocate, stumped across the Golden State for its passage.
At a truck stop one evening in Merced County, with big rigs in a semicircle training their headlights on the press conference, Nader declared to reporters that the “insurance industry is high on the narcotic of its own glutinous profits.”
The industry had poured $63 million into the opposition campaign. But right there off Highway 99, Rosenfield — then 36 years old — turned to Nader and said, “Ralph, I think we have a shot.”
The proposition narrowly passed. It made the insurance commissioner an elected position, required insurance companies to gain the commissioner’s approval for rate increases before imposing them, and paid attorney fees for “intervenors” like Consumer Watchdog when they challenge those proposed increases.
As climate change has contributed to major wildfires across California since 2017, and insurance companies have paid out billions in claims, they have blamed Rosenfield and Prop 103 with keeping rates below national averages and slowing the process to increase rates to meet the times.
Rosenfield spoke with us about the battle for consumer interests in a time when many are desperate for coverage and elected Insurance Commissioner Ricardo Lara is overhauling regulations he says are outdated and in need of reform to stablize the market. Edited for length and clarity.
Q: The L.A. fires made this issue very real, not just for the folks who live out in the woods and in the mountains, but to urbanites in the heart of America’s second biggest metropolis. Many had already lost their standard insurance and the state’s last resort FAIR Plan is stretched to the brink. So I have to ask, are Californians starting to feel like maybe they need to dump these rigorous rate review rules from Prop 103?
A: The insurance industry has been saying we can’t do business in California under Proposition 103, and they’ve been pulling out of neighborhoods all over the state to make that threat real. The truth is they’ve been saying they can’t do business under Prop 103 since before Prop 103 passed. This is a propaganda ploy in which insurance companies are trying to opportunistically take advantage of a disaster in order to increase their profits at the expense of the public.
Q: The editorial board of the Orange County Register called for the repeal of Proposition 103, saying it didn’t solve California’s insurance problems, but made them worse. So are we in a situation where policy holders are essentially over a barrel, forced to accept industry demands?
A: It’s really not about Prop 103. It’s about what are we the people of California going to pay. What ransom are we going to pay in exchange for the right to buy insurance? Commissioner Lara’s position is, I don’t care. I’m just going to pay the ransom, whatever they demand. And their demands never end. The black mailers always continue to blackmail you. My answer to that is, if you want to repeal 103, go ahead and try. Only the people can agree to take apart what they put together. Why hasn’t the insurance industry, since they hate it so much, why haven’t they tried to put it on the ballot? The answer is because they know that the voters will never vote to raise their rates without justification.
Q: After Consumer Watchdog accused Insurance Commissioner Lara of striking a secret deal with insurance companies, his office said your group has earned millions of dollars disputing rate increases — while “denying the reality that insurance has become impossible for some Californians to find at any price.” The insurance industry has called Consumer Watchdog a “bomb-throwing bogus advocacy group.” and a “publicity-seeking dark money front.” What do you say to that?
A: The insurance industry has been trying to kill the messenger, the messenger being me, being Consumer Watchdog, for decades, and this is one of their favorite arguments, that these guys are in it just to make a lot of money and it’s not helping anybody. Our work, especially these days, is almost entirely defending the public against insurance company abuses before the Department of Insurance, where the industry is firmly in control now. We’re not beholden to any politicians or government agencies. We just do what’s right for consumers, and they hate that.
Q: Home insurance costs are doubling, tripling and more. How are state lawmakers going to deliver on their pledge to make the state more affordable when people can’t afford home insurance?
A: Now that insurance companies have been given all the rate increases that they’ve needed so far, in the billions of dollars over the last few years, and the commissioner has changed the regulations to allow them to … do everything they want, we’re projecting insurance companies will demand massive rate increases beyond what would have been justified. Rates are going to skyrocket … It could place the cost of insurance beyond anybody’s ability to afford it.
Q: So what happens now?
A: So the people who can’t afford it will go to the FAIR Plan — or go without insurance, which is a bad idea.
Q: And what happens then?
A: The insurance industry, I actually think they’re going to start coming back. California is the biggest insurance market in the U.S. It’s not viable for them to leave the state entirely.
Q: Any regrets?
A: This is one thing Proposition 103 didn’t do. Insurance companies are allowed to flit back and forth between different forms of insurance, like if they feel like selling you car insurance today, but want to stop selling you homeowners. They have the right to do that today – except they can’t discriminate against neighborhoods unfairly. The one thing the Legislature could do is say to the insurance companies, if you’re going to do business in California, any kind of business, you have to sell all forms of coverage that policy holders need — auto, home, etc. That would be a way for them California to leverage the privilege to do business here effectively, right? We are now promoting a bill in Sacramento to require this.
Harry Rosenfield
Work: Founder and Counsel, Consumer Watchdog, a non-profit, non-partisan citizen research, advocacy and litigation organization.
Age: 72
Education: Law degree, Georgetown Law School; B.A. Amherst College
Family: Wife: Georgia Bragg, author of multiple books for young adults. Daughter Maisy Bragg, 35, Masters degree in social work, with three children. Son Cody Rosenfield, 32, Masters degree in data science, investigating price manipulation and other anti-competitive conduct in energy industry.
Residence: Los Angeles.
Five Things to Know about Harvey Rosenfield
1. Took a year off from law school, worked his way over the Atlantic on a freighter, backpacked through Iran, Afghanistan, then Asia, to Taiwan and Japan, rode the Trans-Siberian Railway through Russia and back to Europe.
2. Strong believer in mentoring — his high school teachers, a college professor, and Ralph Nader guided him along the path to where he is today. He’s tried to “pay that forward” through the advocacy groups he’s started.
3. A door-to-door campaign in his hometown to raise scholarship money was adopted by the American Cancer Society and became an annual nationwide event: the “Great American Smokeout.”
4. Into long walks and reading (not at the same time). Did the “Great Saunter” last May — a 32-mile walk around Manhattan in a single day.
5. Injustice really ticks him off.