Proposition 103

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

California voters passed Proposition 103 on November 8, 1988. It in effect made insurance companies require "prior approval" from the California Department of Insurance before implementing property and casualty insurance rates. It passed with 51% of the vote.[1]

The measure expanded the Department's responsibility for enforcement to include: property insurance, automobile insurance, life insurance and other types of casualty coverage. Proposition 103 made the California Insurance Commissioner an elected position (previously being a governor-appointed position).[2]

The ballot measure required insurers "roll back" their rates 20 percent. Proposition 103 devised a process enabling consumer participation in the setting of insurance rates, and allowed consumer "intervenors" witness fees and expenses in some cases.[3]

Insurance regulation[edit]

Insurance types regulated by Proposition 103 are: Personal automobile, dwelling fire, earthquake, homeowners, inland marine, and umbrella; Commercial aircraft, automobile, boiler and machinery, burglary and theft, business owners, earthquake, farm owners, some fidelity, fire, glass, inland marine, medical malpractice, miscellaneous, multi-peril, other liability, professional liability, special multi-peril, umbrella, and coverage under the Longshore and Harbor Workers' Compensation Act.[4]

According to the California Insurance Commissioner, Proposition 103 "has saved consumers billions" since being implemented, specifically a $4.29 billion per year dividend. It also claims "Californians spent 0.3% less on auto insurance in 2010 than they spent in 1989, while the nation spent 43.3% more".[5][6]


Investigatory and regulatory hearings are open to intervenors. Members of the public or organizations can observe or may attend the hearing and request to be heard, submit written comments or present live testimony. Attorney fees can be reimbursed when written comments are submitted that "make a substantial contribution within the time frame in the notice".[7]


  1. ^ Ralph Nader (2004). In Pursuit of Justice: Collected Writings 2000-2003. Seven Stories Press. pp. 240–. ISBN 978-1-58322-629-2.
  2. ^ Fredrick C. Harris; Robert C. Lieberman (30 June 2013). Beyond Discrimination: Racial Inequality in a Post-Racist Era. Russell Sage Foundation. pp. 280–. ISBN 978-1-61044-817-8.
  3. ^ J. David Cummins (23 June 2004). Deregulating Property-Liability Insurance: Restoring Competition and Increasing Market Efficiency. Brookings Institution Press. pp. 196–. ISBN 978-0-8157-9841-5.
  4. ^ Dergler, Jon. "Insurers Question California Commissioner's Authority to Make Comp Writers Report Federal Tax Savings". Insurance Journal. Retrieved 4 September 2018.
  5. ^ "Information Sheet: Proposition 103 Intervenor Process". Retrieved 4 September 2018.
  6. ^ Daniels, Jeff. "Why California's big fire losses this year won't mean massive insurance rate hikes in 2018". CNBC. Retrieved 4 September 2018.
  7. ^ Impact Analysis of Weighting Auto Rating Factors to Comply with Proposition 103. Office of Policy Research, California Department of Insurance. 1994.