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Sacramento, CA (CompNewsNetwork) - Insurance Commissioner Steve Poizner announced today that due to increased efficiency at the Department of Insurance (CDI), fees paid to fund CDI's regulatory activities have been cut by 9.8 percent.
"When I came into office, I ordered the creation of a strategic plan -- the first in recent history, a business process survey and a top down review," said Commissioner Poizner. "Because of that, I have been able to streamline the Department of Insurance and cut my state operations budget by nearly 15 percent. With these lower costs, I have ordered CDI to reduce the fees that we charge."
The fees are collected to reimburse CDI for actual costs incurred by the department. These activities include work related to rate filings and resolving rate rollback issues; providing consumer information and assistance in resolving insurance related problems; and studies relating to auto ratings, rate regulation, rate enforcement and fee assessment. Because Commissioner Poizner's efforts have made the department more efficient, fewer resources are needed to complete these activities.
In fiscal year 2009-10, CDI will collect $23.8 million from these fees, a reduction of 9.8 percent compared to fiscal year 2008-09. These fees are now 19.5 percent lower than fiscal 2006-07, the year before Poizner took office. The total savings from the 9.8 percent rate cut is approximately $2.6 million.
This is the third time fees have been cut due to Commissioner Poizner's efforts to modernize and streamline CDI.
• In January 2009, Commissioner Poizner announced a six percent fee reduction for more than 300,000 licensed insurance agents, brokers and adjusters - the vast majority of whom work in California 's small businesses. This specific fee had never been cut since the Insurance Commissioner became an elected position in 1990. The total savings for license renewals alone will be $3.5 million annually.
• Commissioner Poizner has reduced a fraud assessment from $5,100 to $2,100, a direct result of lower estimated operating costs. The cut will result in approximately $3.8 million in savings for ratepayers.
Commissioner Poizner also has attempted to reduce other fees as their original purpose have been fulfilled.
• The legislature blocked an effort to lower a portion of a surcharge on auto insurance policies. A portion of the surcharge was originally intended to fund a backlog of auto insurance complaint investigations that have been significantly reduced. During the last legislative session, Commissioner Poizner proposed lowering the surcharge by 10 cents to reflect the successful backlog reduction. The proposal will be reintroduced next year. This reduction is estimated to save Californians $3 million.
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