In today's fast-moving digital world, misinformation spreads faster than facts — especially when it comes to complex issues like insurance regulation. One leaked email, a few out-of-context headlines, and suddenly, public understanding of an already complicated market becomes even murkier.
That's exactly what happened recently when internal communications between insurance industry representatives and California officials were selectively publicized — suggesting cozy relationships, backroom deals, and regulatory bias. But as KarlSusman, host of Insurance Hour and longtime advocate for consumer and industry transparency, explains, the truth is far more nuanced.
The issue isn't corruption — it's communication. And when media narratives distort how insurance reforms are discussed, it becomes nearly impossible for Californians to understand what's really at stake in their state's insurance crisis.
California's insurance system is in the midst of its most serious disruption in decades. Major insurers like State Farm, Allstate, and Farmers have restricted or paused new business. The state's FAIR Plan, designed as a last-resort safety net, has doubled its policy count since 2020.
At the heart of the problem is Proposition 103, a 1988 law requiring insurers to get prior approval from the Department of Insurance before adjusting rates. What was once a consumer protection measure has become a regulatory bottleneck — preventing companies from responding to inflation, wildfire risk, and reinsurance costs in real time.
As Susman points out, "Insurance companies aren't leaving California because they want to. They're leaving because the math no longer works."
The controversy began when a series of emails between insurance industry representatives and the California Department of Insurance (CDI) surfaced. Media outlets framed the correspondence as evidence that regulators were working "too closely" with insurers during the rulemaking process.
But according toSusman, these communications were routine and required by state law. Under California's Administrative Procedure Act, regulators are obligated to seek public and stakeholder input when developing or amending rules — including input from insurers, consumer advocates, and industry groups.
"It wasn't collusion,"Susman clarified. "It was collaboration — the kind that ensures any new regulation is grounded in reality, not ideology."
The so-called "leaked" emails were, in fact, publicly available documents on the state's website as part of the regulatory comment process. What made them seem secretive was how they wer ...
