ICLE on California’s Prop 103 Failures

An ICLE white paper on the problems with California’s Prop 103 system of insurance regulation was cited by Cato at Liberty in a post about the insurance crisis facing the state in the wake of major wildfires. You can read the full piece here.

The CDI rejected or delayed approval for substantial rate increases in many cases, creating a de facto price cap. Previous research from scholars at the International Center for Law and Economics shows that the average delay was 293 days between 2020 and 2022—a significant worsening from the average of 157 days between 2013 and 2019.

In fact, between 2017 and 2022, California was the worst state in the country for “rate suppression,” having the biggest gap between “the actuarially indicated rate and the rate approved by regulators.”