09/24/2021

Steven Greenhut: In California, the state insurance industry is run by commissar’s edict.

Critics of California’s business climate routinely complain about the state’s high tax rates, its large and costly government, its coddled and overpaid class of government workers, and its excessively burdensome level of regulation. It’s an old story — and you can even buy a People’s Republic of California T-shirt (or move to Texas) if you want to express your displeasure at the continuing loss of entrepreneurial freedoms here.

The People’s Republic jibes are tongue-in-cheek, of course, but there is a large area of commercial life where this isn’t that much of an exaggeration. An ongoing court case over a regulatory edict illustrates how unfree parts of our economic life in this state have become. Because the issue deals with the mind-numbingly complicated topic of insurance regulation, it hasn’t triggered wide interest from reporters or the broader business community.

But it’s worth looking at a San Diego County Superior Court case pitting State Farm General Insurance Co. against California Insurance Commissioner Dave Jones. What would your business life be like if it were regulated in the same manner that California regulates property and casualty insurance? Could you in any way argue that you were operating in a free or open society?

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