Californians Need Access to Low-Cost Insurance

By Andrew Ysiano

Affinity group programs in the state of California help organizations offer their members affordable rates of insurance. One such organization that I’m familiar with, the California Hispanic Chamber of Commerce, provides small local Latino business owners and their families with the opportunity to get discounted insurance based on agreements with a variety of insurers. These types of programs are offered in almost every state. Under Proposition 103, California allows for the use of these affinity groups, and insurance rates based on affinity groups have been permitted by the California Department of Insurance (Department) for over thirty years.

For over ten years, the California Hispanic Chamber of Commerce has partnered with their insurance carrier to offer discounted insurance through an affinity program, and it is a critical benefit that they provide to their members. This important program provides savings to individuals, businesses and communities that are marginally getting by, saving potentially hundreds of dollars each year.

On September 17, California Insurance Commissioner Ricardo Lara will hold a hearing to investigate the use of affinity groups for auto insurance. Although the Department has permitted insurance rates based on affinity groups for over thirty years, special interest groups claim the practice of providing discounted insurance based on affinity groups – such as occupation, in the case of the California Hispanic Chamber of Commerce – is unfair. 

Insurers have collected data for several decades, and that data, that is reviewed and approved by the Department, demonstrates affinity group members are proven to be lower-risk policyholders. These programs across the state are designed to provide safer drivers with lower rates.  The savings from marketing to a group finances the discount provided.  No other driver subsidizes affinity group discounts; therefore no one is harmed. For organizations like the Chamber, their affinity program allows them to offer hard-working men and women insurance that they might not otherwise be able to afford. 

Communities of color have long experienced a gap in access to crucial services like auto insurance. Should the use of affinity groups be eliminated, this gap would only widen, forcing Hispanic small business owners and their families to pay more for their insurance. What is needed at the upcoming hearings is a fair, honest and transparent debate on the issue that highlights the impact on communities over special interests.

Access to affordable insurance can make or break the financial health of a family or small business owner, and as such, we as a community need to urge Commissioner Lara to maintain this important program and assure the continued growth and safety of all communities in California.

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