- Do we have a problem with the amount that Wall Street is just involved in insurance and utilities?

- Absolutely.

Absolutely.

It's a tricky, complicated, somewhat abusive relationship with capital, right?

Because in the end of the day, we need capital, money to pay for all the work that the utilities need to do to reduce risk, to make it less likely that they're causing fires.That stuff - Costs money.

- All that stuff costs money.

Wall Street and Capital are not always looking for how they can improve life in California.

It's about how they can make money on their investment.

- Hey everyone, from KQED in San Francisco, this is Political Breakdown.

I'm Marisa Lagos.

Today on The Breakdown, this fall, Californians will choose their next insurance commissioner.

It's a powerful position that regulates insurance rates and acts as a consumer advocate.

The vote comes as the state faces increasingly destructive fires, rising energy prices, and a volatile insurance market.

And for the first time this year, two Democrats will be facing off on the ballot.

Today, we're sitting down with one of those candidates, State Senator Ben Allen, whose district includes Santa Monica and Malibu, the site of those devastating fires in 2025.

Senator Allen, welcome to Political Breakdown.

- Thanks for having me.

I really appreciate it.

- And I should note that next week we will speak to your rival in this race, former San Francisco supervisor, Jane Kim.

So tune in for that too.

But I want to start, before we get to this race, just a little bit of background about you.

You grew up in Santa Monica.

I think you went to Harvard and Cambridge and then UC Berkeley, and you served as a student regent there.

I'm wondering if that's the first place you caught the political bug.

- Oh, goodness.

Well, I had a little bit beforehand, I suppose, but it was an incredible experience represented.

- I mean, it must be kind of an odd one because you're only one student, right?

- One student serving on the board.

And the way they had it at the time, there's another student who serves as the designate.

So you basically serve together for one year, but there's only one voting member.

And it's a very strange experience because you're sitting around a table, especially at the time as by far the poorest, least empowered, youngest.

- Right.

- These are like - Rich, powerful people generally on this board.

Yeah.

- Very powerful, especially given the way that previous governors used to nominate.

So yeah, it was daunting, but I got a lot done there and I really learned a lot and it absolutely helped me with everything I've done since.

- Yeah.

I wonder, I know you did work for a New York member of Congress doing some communication work, but until being elected to the assembly in 2014, most of your work in your career really focused around education.

You taught at UCLA Law School, City College, you served on the Board of Education, Santa Monica, Malibu for seven years.

I guess thinking about all that, did you ever think about running for superintendent or going sort of more into education policy work?

- You know, I did.

I spent a lot of time early in my tenure in the Senate working deeply on education policy.

I was the chair of the education committee and I continued to be very interested in the subject matter.

I think at some point, another area that I'd always been passionate about was environmental policy and environmental protection.

- Yeah, that's what you're kind of known for.

- And I ended up for various reasons, I was shifted by the prote - by the president of the Senate from education committee to chair the environmental quality committee.

And I ended up spending the, the majority of my time in the Senate certainly over the second half of my, my tenure, deeply engaged on environmental policy.

Natural resources fire risk, climate policy, climate, you know, cap and trade, our, our climate bond plastics waste reduction, all those kinds of things.

And there's a real nexus between environmental and climate policy and insurance commissioner.

But, but, but I, education policy remains near and dear to my heart and - - Well, neither policy area is uncomplicated or easy.

- Yeah.

Either way.

And it actually, and it turns out, by the way, that there are very complicated insurance issues associated with educational institutions.

And I actually ended up running a bill with the educational community just this last year relating to insurance compensation disclosure and making sure that they're being well treated as well.

- I mean, that's so fascinating because it sounds like you feel like a lot of the work you've done has prepared you to run for this role.

Is that correct?

- Everything's intersectional.

Everything connects.

You know, but yes, I've, I've spent years and years deeply diving into many different policy topics.

I see how they all connect.

I've got a long track record of, of getting difficult work done in the, in the legislature, in the policy arena.

But what, what the through point over and over again is fighting for consumers, looking out for working people, trying to make the system work better for people, trying to improve quality of life in our state in a variety of different topics.

- You know, you, as I mentioned at the top, represent a district that was impacted by those 2025 fires.

Malibu was part of the district.

And I know you did not live in that Palisades fire zone, but I think your family had to evacuate.

Can you just tell me first of like on a personal level, when those fires broke out, like what was your experience?

I think you have two young kids, like your family having to evacuate.

- Incredibly scary experience.

I mean, thankfully I, my family didn't, my, my, my nuclear family didn't evacuate, but my mom did.

Okay.

We brought my mom actually over to our house and we were, our little place, our little condo was, you know, a block and a half away from from the evacuation warning zone.

So very scary.

School got suspended the smoke in the air.

Our, I mean, everybody in the region was breathing in terrible, terrible air for, for a week or two after those fires.

So many of my, I knew, I knew that community so well and so many of my friends lost their homes.

It was a really scary, difficult experience.

Yeah.

And, and then, and then to see how how the community was then getting impacted by lack of insurance, under insurance, - Helping people.

Yeah, talk about that because like you, as you said, you've been in the legislature.

I mean, I mean, these are new problems in the last decade, but things that we've all been grappling with really since 2017 and those horrific fires here in the Bay Area.

So what did you see in the aftermath in terms of those problems with insurance industry?

Was it anything that like surprised you or you didn't know before that?

- You know, I got, I got a, I always, I've been following these issues for a long time and I've been working in this area to some extent for quite, for quite some time.

But you know, seeing how the, all of these rules and market forces play out in real time in a community was very eye opening.

And I saw an incredible range of experiences.

I mean, some insurance companies behave very honorably and paid people quickly and, and it worked as you'd want it to work.

And then there were lots that were lots of horror stories.

And my office started getting dozens and dozens of calls and we ended up helping hundreds and hundreds of people get the payouts that they deserved in the wake of the fires.

I was really proud of that.

I'm proud of my staff and all the work they did.

I, I will say there's still dozens of open cases that we're struggling to get resolved.

I, I couldn't help but wonder why you have to get to your state senator just to get basic help.

Right.

And why can't you get that through your insurer?

Why not through the Department of Insurance?

Well, it turns out there's only 34 people handling these calls to the department.

That's less than one per one million Californians.

So one of the many things I want to do is beef up the customer service operation at the department.

And - What would they be doing there?

Because again, like the insurance companies are the one that these folks should be interfacing with.

- Yeah.

So, so they're basically helping people navigate the process.

I mean, at the end of the day, when there's a disaster, as much as we would hope that the insurance company would behave as though it had a fiduciary duty, you know, the, the, you know, there's a bit of a zero sum problem at that point.

Once a disaster's happened, anything you get from the insurance company is money out the door from the insurance company, right?

So, so the insurance company's not always inclined to be as generous or as, as helpful with you as, as they should, as one would hope they would be.

Right.

And so the insurance commission, the, the insurance department is there to look out for, to advocate for working Californians for consumers and be a, a, you know, support and, and also help to, you know, help to push through some, some challenges.

Now, of course, there's a whole world of people that also you can hire to help you, but but you know, the department's there to be an advocate for consumers and help people through these very difficult moments.

And we got to make sure that when they, when there are these disasters, that there are adequate resources in place to help people.

- You said 34.

How many do you think would be more adequate?

- I mean, at the very least we need to double that and, and, you know, and maybe, and figure out a, a, a kind of a flex plan to, to to, to be able to, to expand during major disasters.

- Yeah.

This reminds me of the EDD meltdown a few years ago and talking to your former colleague David Chu about kind of similar things.

Like you end up in these legislative roles kind of.

I mean, constituent service is a huge part of it.

- It's a huge part of it.

And it's something I've always really prided myself on.

And, and, you know, quite frankly, when I think about the, you know, I really love being in the legislature and get.. as a local feel.

I've got, I know all my local communities and city council members and being able to represent a state the size and the scope of California is going to be daunting.

But I definitely want to continue that customer service ethos in this position.

- All right.

So, you know, you have worked on a lot of this policy wise in the legislature but neither you nor your opponent who's also served in elected office has really worked like as a consumer advocate or in the insurance space directly.

So what, what do you think is the most important quality in insurance commissioner?

Like what should voters be thinking about here?

- Well, first of all, I would say just I'll respectfully push back on the - Yeah.

I've done a lot of work on, on trying to protect consumers as a consumer advocate in the legislature.

So taking on powerful interest groups, hospices, car dealerships the, the fossil fuel industry petrochemical interests, the utilities, insurers.

I mean, I've run a slate of bills - Yeah.

That, that, that try to create additional protections for consumers in all of those different areas.

So I think part of it is looking for somebody who has got a real track record of fighting for people who actually knows the subject matter, has worked in the subject matter, has been an advocate for working people in that subject matter, who also has the know-how, the relationships, the expertise, and the on the ground experience of, of knowing the issues, how they impact communities around our state, and also getting difficult things through the legislature.

So much of the success of the next insurance commissioner is going to come down to his or her ability to really engage the legislature, the new governor, to pass additional reforms and to, to, to take on these really tough issues.

Yeah.

To protect people, to heal the market, to, to get us back on track so we have affordable, available insurance around the state.

- Yeah.

I mean, that brings up sort of one quality I think you would need, which is like the ability to negotiate in this job.

Absolutely.

Have you had to engage in tough negotiations before?

Like what, how would you describe yourself in those scenarios?

- Over and over and over again.

In fact, as I decide, as I was trying to decide whether to run for this position, a lot of what I reflected on was I said to myself, "What has given you the greatest sense of professional satisfaction in your current job in the legislature?"

And it actually was engaging in these kind of tough negotiations on a lot of different topics from the plastics waste reduction bill, SB 54 that we just got done a few years ago, to the climate bond, which is finally getting, I was the lead author of both of those, that finally getting serious resources out the door to help us with risk reduction around the state, firefighting infrastructure, water infrastructure you know, better treatment of our wildlands and, and with the, with the nation, with the notion toward fire.

You know, the TV film tax credit the, the, the big pro consumer car purchasers bill that we got done.

So lots and lots of different topics that have involved difficult, complex negotiations where you bring everybody to the table, you listen to everybody intensely, you, you, you, you work through the issues.

Negotiations was my favorite class in law school because it, it's a fascinating and important topic that's ultimately all about trying to really listen carefully to your opponent and, and, and actually understand that oftentimes when people come at each other fighting over 10 different issues, you start to actually understand that this guy really cares about items one, five and six, and this person cares more about two, seven and nine.

- It's like why you always start with the easiest stuff first, right?

- And, and, and then that's how you find a, a way toward common ground.

And I think the, the, the next insurance commissioner, to do this job right, is going to have to engage in intense negotiations with the industry, with the insurance industry, with local governments, advocates, environmentalists, fire experts, builders, utilities, and, and consumer advocates to make sure that we're really pushing a, a, a strategy that's focused on risk reduction in a way that will actually be rewarded and incentivized by the insurers with, with affordable, available insurance for folks.

And - Explain like to people who may not understand the system, like what kind of leverage and power do you have in that role?

- So the insurance commissioner is, is the chief regulator of nearly every aspect of insurance except for healthcare, interestingly.

That's - Except the most expensive one.

Which is, which is a big, big meaty and important topic for, for a variety of reasons.

That is largely under the control of the governor through the department of managed healthcare.

But everything else, I mean, home, auto, you know, life insurance and long-term care, pet insurance and title insurance, all those things, workers' comp, those are under the department of insurance at the insurance commissioner's office.

So you review the rates you know, the rate review applications the, there's an enforcement division there.

There's a customer service aspect to this.

So the, the insurance commissioner has a, a decent amount of power.

And in fact, I actually ran a bill to give the infor - the insurance commissioner more power because I called the commissioner and said, "Hey, why aren't going after this, this and that?"

He said, "Well, I don't have the power to do it.

Okay.

I'm going to write a bill and do it so we can give you some more power to, to, so to have more enforcement ability against bad actors."

And so there's, there's, you know, it's not, it's certainly not unlimited and, and, and so much of the, the ability of the next insurance commissioner to be effective will involve deep work, deep close cooperation and coordination work with the governor, with the legislature and with local government leaders.

But there is considerable power, power there and I, I intend to, to utilize it in coordination and cooperation with, with other, other leaders.

- You know, you brought up the current commissioner, Ricardo Lara, he's a former state senator as well.

Early in his term, there's critiques that he was like too close to the industry.

Do you feel like those have worn out over his term?

- Look, I, I I think he's, he's done some good things.

I mean, certainly one thing I would say that that he's done well is the, the implementation of the sustainable insurance strategy has actually started the process of building out the market again, getting people off of the fair plan.

Well, at least slowing the growth of the fair plan.

Look, it's a hard job.

He's certainly struggled in aspects of it.

But I do think that there's some new, there are some successes that are coming online.

You know, I mean, look, I, I'm, I'm, I'm my own guy.

I've got a long track record of taking on these industries, including the insurance industry directly, through legislation, tough battles in the legislature and winning.

And I'm going to, you know, after going through what I just went through in my community, I'm going to be, you know, fighting for working people around the state.

And that's going to be my focus and trying to make the system work better for, for, for real people.

- You have a grade for Lara?

Like how would you grade him in his tenure?

Oh, I don't - Know.

I, you know, look, I think it depends on the topic, quite frankly.

Yeah.

I think you know, there's some areas where I have criticism and there's other areas where I think he's done well.

- What's the biggest sort of criticism you would have then?

- You know, it's interesting.

A lot of people criticize him for the trips and some of the gifts and there's been a lot of journalism on all of that.

You know, obviously - - Doesn't look good.

- Yeah, it doesn't look good that, you know, but that's, that's for folks to evaluate.

I mean, I think quite frankly, he, I've said this to him.

I mean, I'm not, I'm not, you know, speaking out of turn here.

I don't know that, I think, I've said this to him that he, I don't think he's defended himself in the press enough.

I think there's a lot of things he's done which actually makes sense when you go through the details, especially aspects of the sustainable insurance strategy that are making the system work a little bit better, that he's not adequately - He's not selling.

Sold, you know?

It's just a, it's about, because ultimately this is complicated stuff.

Yes.

The, the, the factors and forces at play are really intense.

And I just, I, I think that you know, I, I would want to build on what he's done, but I want to, I would want to go further.

And - It - Sounds like you feel like though explaining a lot of that to the public is part of this job.

Absolutely.

And that struck me, honestly, when I was looking at some of the things he's done.

I was like, oh wow, that, that actually.

Yeah.

Well, let's - Explaining - To the public, explain to the legislature, engaging the legislature, engaging the public advocates you know, folks like Consumer Watchdog and, and Consumer you know, Federation, you know, I'm proud of endorse me and the policy holders, you know, all of these, these groups that are out there advocating for, for folks.

And, and I think engaging with them and engaging in negotiations with the industry, this is, this is the work.

- Yeah.

- Well, let's talk - About some specifics because you've called for essentially rewarding fire mitigation risks.

So like if I as a homeowner do things to harden my home and our community does it, that you should get a break.

Do you.

And, and this is something Lara has worked on as well, offering, you know, discounts to folks who make wildfire safety improvements, but it seems like there's a lot of differential between like what gets rewarded by what company, by how much.

I wonder if you think that's something you want to tackle, is like standardizing those discounts and, and, and making it more clear to consumers.

- Standardizing them, scaling them.

And let me just say, one of the problems with our current system is that the relationship is between an insurer and an individual.

And the truth is, all the work you do to harden your home, to make your home less susceptible to fire or other risks, only goes so far because.

And I know this, I've got a good friend who's done everything right.

She's rebuilt her home in the Palisades to the highest fire safety standards, but her next door neighbor who happens to be four or five feet away is a corporation by the way, and they just literally rebuilt their home using vinyl sidings, vinyl fencing.

I mean, that's a plastic that will just combust in a second during the next major fire.

And so an insurer's going to come to her house and say, "Look, great job.

You've done everything right, but your next door neighbor has been a puts and hasn't done the hardening, and so you're still a pretty high risk policy."

Part of what we have to do as a state is change the culture, the rules, the zoning, the approach in a way that will bring together not only the individual home hardening work, but also collective community-wide resilience work.

It's the way we treat our wildlands.

It's the building out of our fire infrastructure.

It's the way that we design our communities and rebuild our communities and invest in our communities in a way that will make them less susceptible to a major disaster sweeping through.

And there are ways to do this.

There actually are communities that are doing this right now that are actually getting affordable insurance as a result, but we've got to scale this in a major way.

It's going to be hard.

And it's going to involve the insurance commissioner really looking the insurers in the eye and saying, "Listen guys, you keep paying all this lip service to risk reduction, but you're not actually rewarding it in a meaningful way.

As I go around the state, there's all this incredible work underway, community to community to reduce risk."

Now, what the insurers will sometimes say is, "Well, what they're doing is not enough."

Okay, let's close the loop and get that addressed.

If what they're doing is not adequately meeting your needs from a risk reduction perspective, by all means, let's make sure this risk reduction process is being informed by the underwriting process as well.

By all means, I want that conversation to be happening.

And I think the insurance commissioner is uniquely positioned to force that conversation and to say to the insurance industry, okay guys, you've got to be part of the solution.

You've got to inform this risk reduction effort, and then once you've done so, you've got to actually reward it and incentivize it.

- Yeah.

I mean, I wonder, is that going to require state law change, regulatory change?

- Almost certainly it will involve various changes in rules.

Again, another reason why there's a real benefit to having someone in this position who cares a lot about fixing the problems, who also knows how to navigate the complexities of Sacramento, the capital, the legislature, and the new governor.

- Yeah.

I want to ask you about something your opponent has called for, which is like single payer home insurance, this idea that instead of having the private market run this, that we should have the state collect premiums, pay out claims.

What do you think about that?

- Yeah.

So what my opponent is doing is she's taking popular support for comprehensive single payer healthcare, which is a real thing that exists in a lot of countries.

My dad is an immigrant from Europe.

I've seen comprehensive single payer healthcare work in other places.

You can interrogate the numbers.

There are studies on this.

There's people written about this.

And she's basically taken that model and - - Popping it over here.

- Popped it over onto a home disaster insurance.

And the problem is that that doesn't exist anywhere in the world.

What she will say if you ask her is, "Oh, well, what about New Zealand?

Well, what about New Zealand?

New Zealand covers up to $167,000 per unit.

It doesn't cover fire.

It's basically a baseline support, kind of almost like a social security for people who might lose their home from a tidal wave, a volcano, or a tornado or an earthquake.

That's what it covers.

Now that's good.

That's helpful.

That's not nothing, but that's not comprehensive single payer system.

So then she'll point to France or Spain.

Those are public backed reinsurance programs.

Not a bad idea.

I'm interested in both those models, by the way.

But what she's proposed has no precedent in the world.

Neither - But - Does that in itself make it a bad idea or do you think that there's a fundamental problem with that idea given what we've seen?

- You know what?

Even if she were able to get this through the legislature, which I don't think she'd be able to, even if it were a good idea, it would take 10 years to implement at the earliest.

I'm trying to focus on fixing the problems right now.

That's where my focus is.

All the consumer advocates, I mean, these are people that fight the industry every day.

They would like nothing but to see the industry - Go out of this.

But they pan her ideas.

I mean, Consumer Watchdog, Consumer Federation, United policy holders, they say that it's not grounded in real science, in real experience.

And so my focus is in trying to make the system work for working people right now.

- Okay.

I want to ask too.

We just had, and this is a area that includes both utilities.

So the Public Utilities Commission has power over it, but also insurance, which is this deal that kind of fell apart, the governor was pushing for, essentially to try to shift some liability away from utilities when they cause things like wildfires onto insurers.

And he at first wanted to end this subrogation process where essentially a home insurer could sell the claim after.

They pay out maybe me for a disaster and then in order to go after the utility, they sell that to an insurance company.

You know all this, but I think a lot of people don't.

And a lot of times they sell them to hedge funds who have super deep pockets and a lot of lawyers.

Newsom wanted to ban insurance companies from selling those claims to hedge funds.

Did you support that idea?

- Absolutely.

Yeah.

And so did the Senate, by the way.

So the Senate supported banning this hedge fund component.

It died in the assembly, yeah.

We were not interested in zeroing out subrogation.

We think it's important.

We though it was important for there to be.

Because again, someone who's seeking to try to fix our insurance system, the last thing we need.

We already having massive problems getting available affordable insurance in a lot of parts of the state.

And the last thing we need to do is now take away an additional tool that provides them with the opportunity to go after some, to get some recompense when there's a utility caused fire.

But I will say that I think there was openness, maybe not going down to zero, but there's a lot of space between 100 and zero.

And I think there was an openness to have a conversation about subrogation, but I think we just didn't want to zero it out.

I think that was too risky to the insurance system.

But the - Final deal that fell apart just said hedge funds shouldn't be the ones buying these, right?

- With regards to subrogation, yes.

And it also had some important consumer protections.

I was certainly ready to support those reforms.

I think they would have been helpful.

- I guess I wonder, because I covered the PG&E bankruptcy and everything that happened there where hedge funds cashed in on both sides of that, right?

They both made money off of, because they owned stock in PG&E, and they made money off of these subrogation claims.

They played both sides of that.

And then at the same time, these utilities are also traded on Wall Street.

We saw PG&E and the other stock fall when this deal fell apart.

At the same time, PG&E went out and said, "Well, now we're going to delay $2 billion worth of work."

I know you just said you want to fix things now and maybe this is a bigger thing, but do we have a problem with the amount that Wall Street is just involved in insurance and utilities?

- Absolutely.

Absolutely.

I mean - - Is that something we can fix at all?

- I mean, obviously it's a tricky, complicated, somewhat abusive relationship with capital, right?

Because in the end of the day, we need capital, money to pay for all the work that the utilities need to do to reduce risk, to make it less likely that they're causing fires.

We got to reconductor and do some undergrounding and improve - - That stuff costs money.

- All that stuff costs money.

And by the way, it pays workers and there's all sorts of.

But that stuff costs money.

And so Wall Street's an important source of money, but it's a very tricky relationship.

And of course, Wall Street isn't always looking to.

Wall Street and Capital are not always looking for how they can improve life in California.

It's about how they can make money on their investments.

Well, right.

And so it's up to us and the government to align the incentives in a way that tries to drive capital through the front door in a way that's actually going to benefit Californians.

Yeah, - Because it's sort of ironic - And I'm not getting manipulated by these people.

- To say we're going to delay safety work that would ostensibly lower our liability risk because you didn't lower our liability risk.

- Absolutely.

And when they were threatening this, I called them out on it and they weren't happy.

But in the end of the day, my interest in any of these folks, from the insurers to the utilities, and I've run legislation against all these folks, largely to create more transparency and more fair rules to protect consumers.

But my interest in their business model is only based on their business model's ability to serve the people of California.

So I'm not looking to run them out of town, but I want them.

It's our job in government to make sure that their business model is actually serving us.

- Yeah.

Well, that is a great note to end it on.

State Senator Ben Allen, candidate for insurance commissioner.

Thank you so much.

- Thank you.

Thanks very much.

- That is going to be a wrap for Political Breakdown.

We are a production of KQED.

Our engineer today is Christopher Beale.

Our producer is Izzy Bloom.

Our video team includes Jim McKee, Derek Lartaud, Kate Lowpensky, and Vivian Morales.

I'm Marisa Lagos.

We'll see you next time.