On November 2, Californians will select a new insurance commissioner, charged with regulating the fourth-largest insurance market in the world at about $160 billion. Assemblyman and Democrat Dave Jones recently shared why he has the experience to tackle such topics as workers’ compensation insurance, balancing the needs of consumers, insurers, agents and brokers, and how he would use the position to help grow the state’s green economy.
An Assembly member from Sacramento serving his third term, Jones chairs the Assembly Health Committee and serves on the Appropriations, Judiciary and Accountability and Administrative Review committees. During his time in the Legislature, he has obtained passage of more than 70 bills — including a host of insurance-related regulation, such as a bill that prohibited health insurers from charging a price differential based on gender and one creating green insurance incentives.
A Harvard Law School and Kennedy School of Government graduate, and an advisor to former U.S. Attorney General Janet Reno, Jones believes he has the experience to oversee “an incredibly important industry that … touches on every aspect of individuals’ and businesses’ lives and operations.”
Jones said he will be able to balance consumer, business and industry needs. “I understand that this is an office that has extraordinarily important powers. It has to be exercised in a thoughtful and deliberate and judicious way,” he said, noting he has been trained to make decisions in a way that “is fair to all parties, that provides transparency and balances the appropriate interests.”
Moreover, he doesn’t believe that consumers and businesses are necessarily adversaries. For instance, when a major health insurance company earlier this year announced a 75 percent increase in rates being charged to its small-business clientele, Jones said he recognized that independent agents and brokers were outraged and distressed that they had sold this product to their small business clients. In this dilemma, Jones proposes to provide the insurance commissioner authority to reject excessive health insurance rate increases, so the insurance agent community and businesses are not being hit by dramatic rate hikes.
Jones also believes employers in the Golden State cannot withstand excessive rate hikes in workers’ compensation. “When workers’ comp carriers seek a 30 percent rate hike in the middle of the worst recession since the Great Depression, it’s a huge problem for California’s businesses,” he said, citing the Workers’ Compensation Insurance Rating Bureau’s recent recommended 30 percent rate increase, then revised 27.7 percent rate filing.
“I share the Governor’s view that medical costs are not rising at anywhere near the rate increase proposed by the Workers Compensation Insurance Rating Bureau, and the cost of claims administration is actually going down. The rate increase at this time is not justifiable … It would be crippling for California businesses,” he said. “By the same token, I do recognize that we need to have a viable workers’ compensation market.”
In addition to taking a look at rate setting in the workers’ compensation insurance system, Jones said he will examine earthquake insurance and green insurance options, as well as tackle national health care reform requirements, if elected.
He is concerned about the affordability of earthquake insurance, as well as its limited subscription rate.
“We face a huge risk and enormous cost that we know eventually will befall us, and we need to figure out how to get more people to take up earthquake insurance.”
Jones said he will try to make earthquake insurance more affordable, lower the cost of deductibles and advocate for a national natural disaster risk pool, similar to the flood insurance program.
Jones also believes the insurance commissioner can encourage business and innovation with green insurance opportunities. “There is a real opportunity here in California to look at the question of whether the growing green tech and clean tech economy is adequately served by insurance products, and whether insurance regulations are in some ways stifling the growth of that economy,” he said.
Jones authored a new law that facilitates personal car sharing to help reduce traffic and air pollution while insulating individuals from personal liability arising from the sharing of the vehicle.
The new commissioner will have to implement national health insurance reform, and Jones said he would monitor the heath care insurance exchange that would allow people who don’t have insurance provided by their employers to shop in a competitive market. A new health care exchange here in California will provide opportunity for up to 6 million Californians to purchase affordable health insurance, and small and medium businesses as well, he said. Consequently, Jones said he wants to ensure that health insurers don’t “cherry-pick” the market and increase the portion of sick people in the exchange, leading to higher rates and carriers exiting California.
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