OC Register Board: Jane Kim’s Win Could Reshape Insurance Market

In a column for the Orange County Register, the editorial board argues that Jane Kim’s victory in the state’s insurance commissioner race could reshape California’s volatile property insurance market.

Voters went to the polls in statewide races where Democrats won by wide margins. One major departure from that trend occurred in the contest to succeed term-limited Ricardo Lara. Former San Francisco Supervisor Jane Kim defeated state Senator Ben Allen of Santa Monica by a 54% to 46% margin.

Ahead of the general election, the editorial board endorsed Allen. He backed the state’s Sustainable Insurance Strategy, which consists of reforms designed to encourage insurers to resume underwriting.

During the primary, the board backed Patrick Wolff, a specialist they describe as a genuine insurance expert. Both Wolff and Allen supported market-based solutions for the ongoing insurance crisis.

California’s insurance turmoil stems from a series of destructive wildfires and an inflexible regulatory system.

Voters approved Proposition 103 in 1988, establishing strict controls that tie the hands of insurers. Unable to adjust rates to match risk, many carriers stopped writing new policies. This left homeowners facing steep price increases or forced them to rely on the FAIR Plan, the bare-bones state insurer of last resort.

Kim ran on a platform titled “Natural Disaster Insurance for All.” Her proposal would create a single-payer system to cover major disasters like wildfires and floods. Homeowners would still rely on private companies for typical house fires and standard claims, but taxpayers would shoulder the burden for catastrophic events.

Public agencies struggle to set rates based on risk because such decisions happen in the political arena, the board argues. These bureaucracies typically run inefficiently and employ large numbers of unionized workers.

Consumers might find themselves dealing with the equivalent of the Department of Motor Vehicles after a disaster.

Implementing this single-payer system requires legislative approval. Kim might find a receptive audience in a state Legislature that continues to move further left.

The immediate question is whether she will maintain current regulatory reforms or adopt the approach of consumer activists. Those activists focus on restricting rates, criticizing insurers, and collecting steep legal fees for challenging Department of Insurance rate hikes.

The board notes that Kim did not appear deeply knowledgeable about insurance during their interview. At the same time, they describe her as personable, smart, and ambitious. Running a collapsing insurance market would not serve her broader political aspirations. Some consumer activists actually endorsed Allen during the race.

Kim should also prioritize noncontroversial platform goals, such as ensuring fast claims processing and expanding coverage in high-risk regions. The board suggests she start by hiring advisors who understand the technical details of insurance regulation. They even offered to provide Wolff’s contact information if she needs assistance building an expert team.