California Insurance Commissioner Dave Jones announced yesterday a general 10 percent fee increase for agents and insurance companies. The fee increase will be effective June 15. According to the department, the fee increase is needed because the department has spent most of its reserve. Under the Poizner administration, the Governor and the Legislature cut the Department’s spending authority. The department continued to collect fees at the previous level which resulted in a large surplus at the department. During the last year of the Poizner administration, the department reduced fees by 12 percent.
Now the Legislature and the Governor have restored the department’s spending authorization and the Department has filled many of the vacancies caused by the California budget crisis. This increased spending has depleted the reserve and the Commissioner feels it is time to raise fees. The department does point out that the fee increase is only 10 percent while the previous fee decrease was 12 percent and that for the first time in a decade, the Department’s fees and license rates are increasing.