Rebuilding the pillars of California’s insurance system

April 14, 2025

OPINION by STACY KORSGADEN

Imagine the client—the policyholder, the homeowner, the small business owner—as a structure held high upon five great columns. These columns represent the forces that uphold the insurance ecosystem: Insurance Companies, the Department of Insurance, Government at all levels, the Private Sector, and California’s Collective Belief System.

But today, those columns are fractured—crumbling beneath the weight of overregulation, ideological drift, and a government drunk on control.

It wasn’t always this way.

In 1988, California reached a fork in the road. Voters passed Proposition 103, ushering in a regime of government micromanagement disguised as consumer advocacy. Price controls. Profit controls. Risk management dictated by Sacramento bureaucrats and career activists.

And at the helm? An elected Insurance Commissioner, focused on politics, not the policyholders.

This wasn’t just regulation. It was socialism.

Under this system, the client—the person insurance is meant to protect—has suffered the most. Fewer choices, higher premiums, and weakened competition have resulted, and insurance providers are struggling to survive. The results are predictable when you smother the free market and vilify profit.

If clients are paramount—and they are—then we must focus on what supports them. Today, our five pillars are not only unstable; they’re being eroded from within:

• Insurance companies are vilified for turning a profit, while bureaucrats and watchdogs set rules that drive them out. This isn’t sustainable. real accountability comes from competition, not command-and-control economics.
• The Department of Insurance has ballooned into a tool for political interference. Its role should be limited—licensing, fraud prevention, reserve oversight, and honest communication. Nothing more.
• Governments at all levels are failing to reduce risk. Wildfire mismanagement, rising crime, unchecked homelessness, and anti-business policies have increased liabilities and are driving families, businesses, and insurers away.
• The private sector, the backbone of claim fulfillment—contractors, auto shops, adjusters—is suffocating under wage mandates, fuel costs, and labor restrictions. When this network collapses, insurance stops working.
• Finally, our belief system, which was once rooted in self-reliance and personal responsibility, now leans toward government dependency, weakness, and moral confusion.

California doesn’t have a business problem—it has a values problem.

But there is a path forward.

The system can be rebuilt, and each column can be restored. It will require discipline, courage, and, most of all, a return to foundational truths: limited government, personal responsibility, and the power of the free market.

This piece is just the beginning. In the coming weeks, let’s explore each of these pillars in more detail, not to simply criticize, but to offer real solutions that work for Californians.

Because when we restore the pillars, we elevate the client–and California’s future.

Stacy A Korsgaden, 35 year insurance and financial services professional. consumer advocate for insurance choice and customer protection. She can be reached at stacy@stacykorsgaden.com.