- So we all know that we live in the age of the climate crisis.

40 years ago, we had a billion dollar storms every three to four months.

We now have one every three weeks.

And the current insurance industry can't handle it.

In fact, the top 10 have been around for over a hundred years and they've done little to innovate to current modern conditions.

- Hey there.

From KQED in San Francisco, this is Political Breakdown.

I'm Marisa Lagos.

Today on The Breakdown, former San Francisco supervisor Jane Kim, one of two Democrats running to be California's 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 prizes and a volatile insurance market.

And it's the first time this year that two Democrats will be facing off on the ballot.

Last week we spoke to Kim's rival, State Senator Ben Allen, and today I am thrilled to welcome Jane Kim back to the show.

Good to see you.

Thank - You for having me, Marisa.

It's great to be back.

- Well, I have known you for a long time because you spent time on the board of supervisors, the Board of Education here in San Francisco.

But before all that, you were born and raised, I believe, in Manhattan to Korean immigrant parents.

And when I was looking back you know, you caught the activist bug pretty early.

I believe in high school you were like volunteering with the Coalition on Homelessness.

You started refusing to say the Pledge of Allegiance because you didn't feel like it was inclusive enough.

I just wonder like where do you think that activist bug came from and were your parents okay with it?

- You know, I, I don't have a very good answer for this because when I was about 13, 14, 15, I knew that this is what I was going to be doing for the rest of my life.

And I'm not sure exactly why that is.

I can create a lot of narratives around growing up in a city with immigrant parents and seeing inequity in our communities, growing up and being asked for money by people who are unhoused on the streets when I was 11 years old and taking the bus and subway on my own and wondering why this was.

So all these questions prompted this, but I just knew that this is what I was going to do.

- Were your parents like.

I mean, I feel like a lot of first generation households, it's like head down, work hard.

100%.

Were they worried about this?

Absolutely.

- My parents were the typical Asian immigrant parents that wanted me to become a lawyer or doctor today, probably be engineer.

And yeah, we fought a lot actually in my younger days because they just wanted me to be secure and stable economically.

And it wasn't until I was on the board of supervisors that my parents really embraced my career choice and my father ended up becoming my biggest cheerleader in my career.

- Yeah.

I mean, you didn't totally disappoint them.

You went on to Stanford, you got your law degree at UC Berkeley.

- You'd be surprised with Asian parents.

- Well, right, but then you went into community organizing.

And as I said, you were eventually elected school board, board of sups.

I wonder when you think back on what was a pretty long period, what are you most proud of from your time in that point in public service?

- You mean when I was young or?

No, - Like on the board or at the board of education.

- Yeah.

So I'm most proud of leading the effort to make San Francisco the only city to make community college tuition free.

Again, because it used to be tuition free until 1983, 1984 in California.

Community college is our only lifelong learning institution.

I graduated from Stanford, but I can't go back to Stanford if I want to take a class.

But community college is always available for me if I want to switch careers, learn a new language, take a PE class.

It's an amazing institution and I'm so glad that we have been investing in it.

I'm also really proud to have passed Baby Prop C with Supervisor Norman Yee to bring in $140 million annually to early childhood education to subsidize childcare for working class and middle class families here in San Francisco.

- Great.

So when you left the Board of Supervisors, you ended up serving as political director for Bernie Sanders 2020 campaign here in California.

And then you became state director for the Working Families Party.

Who is the Working Families Party?

Tell us what it stands for and why you went there.

Yeah, - The Working Families Party started in New York State where they have something interesting called fusion voting, which allows Candace to run under multiple parties at the same time.

We saw this recently with Zohran Mamdani, who was both the Democratic nominee for New York City Mayor and he was the Working Families Party nominee.

So his name showed up twice on the ballot and you could pick under which party you would vote for him.

- I did not know that.

- Yeah.

So it's really cool because, and it's a way that voters can in many ways tell elected leaders where their political priorities are.

And so this year Zohran Mamdani got more votes under the Working Families Party line than the Republican candidate, which was really exciting.

Fast forward and we're now in many states across the country, including California.

We are not a ballot line party here, but we organize like a party, which means that we identify, recruit and support candidates who pledge to be corporate free to run from school board to state legislature and US Congress.

We also create electoral infrastructure like any party would where we do field and phone banking and door knocking and we invest in candidates.

And then when we win, and this may be where we try to differentiate ourselves a little bit, we try to support our electeds to govern once they're in office because our goal is not just winning office, it's to actually win an agenda that uplifts everyday people.

- Yeah.

So we're in this big moment right now where there's so much talk about the Democrat Socialists of America and this sort of split in the Democratic Party between moderates, more progressive.

Where does Working Families sort of fit into that?

Are you guys DSA aligned?

Is it - We - Partner a lot with DSA.

We also sometimes disagree with DSA - And - I think it's great.

I love having a diversity of voices and we all push each other and I think that's really important.

Where WFP is very specific in our mission is that we believe our intervention is electoral, meaning we participate specifically around winning elections and we are serious about governing.

We want to win office again so that we can win an agenda that actually uplifts the lives of working families.

And so our focus is specifically on winning elections.

- Well, let's talk about that.

What made you decide to run for this role?

- Well, let's start with what the role does.

It oversees a $3.3 trillion industry, which despite the headlines is doing incredibly well.

It made $170 billion last year.

Its top 10 CEOs made $391 million collectively.

And meanwhile, we as consumers are required to have it, to drive to work or to school, to qualify for a mortgage to buy a first home, to open a business or even a nonprofit of any kind.

So we have to make insurance affordable and available and fair, otherwise we're shutting everyday Californians out of our economy.

And insurance has this outside say on who gets to build wealth, how much it's going to cost you.

And right now the system is failing us.

The premiums are too high.

They're canceling our coverage.

And even if we have insurance, they fight our claims every step of the way.

And I have dedicated my entire career to figuring out how we can make our society, our economy actually work for everyday people.

And this office plays such a critical role in helping to make that happen and I want to transform this under the radar, under leveraged office to do exactly that, be a champion for working families.

- Yeah.

What do you see as the most sort of relevant experience in your own work and life?

- I see the role of insurance commissioner largely in three buckets to legislate, negotiate and to regulate.

And over my 20 years, I have dedicated my career exactly to that experience as a legislator on the board of supervisors, as a civil rights attorney, and then now as a statewide organizer.

This is what I'll be bringing to the insurance commissioner's office.

And actually what I think makes me very unique is that I have dedicated the last five years to organizing around the state.

So when you look at my endorsements, I've been endorsed by all three Democrats on the San Diego Board of Supervisors.

I've been endorsed by the mayor, Moreno Valley and electeds in Tuolumne and Bakersfield, LA, et cetera.

And what I'm showcasing is this ability to bring these relationships to this office because I am proposing, as you know, some very big ideas.

- Yeah.

I want to get to those in a minute, but I want to - And that is going to require some statewide - Organizing to get there.

- Yeah.

So what do you see as the most important quality here?

Because I think, as you said, it's a very under the radar position, but it is powerful and it is touching an industry that we all need to basically do our lives.

So is it the negotiation, the ability to sit down across the table from these insurance companies?

Is it more, you mentioned legislating, organizing, how do you think about that?

- I think all three skills are important.

I'm sorry if that's not a true answer, but I think you're going to have to do all of those three exceptionally well because this office is inheriting a broken system and no one is happy with insurance.

I would say the insurance industry is probably not very happy with the current setup right now.

And what's so interesting about insurance is how it was actually even developed.

So we've had insurance for millennials.

Humans have always had some form of insurance.

The earliest forms that we know of are Roman soldiers who would pool a percentage of their wages so that when someone died on the battlefield, which was inevitable, they would send that money to their family for burial costs, but also to have some income moving into the future.

Here in California, farmers would collectively pull some of their resources together because they knew inevitably someone in their cohort would lose their crops to something that they could not predict, flood, past, et cetera.

So it was this form of mutual aid.

Now you fast forward to 2026, it's one of the most profitable, speculative industries in the world.

And this office is the only backstop between everyday people and this billion dollar industry.

- Yeah.

How would you approach the industry?

Do you see yourself sitting down with them?

- Absolutely.

I'm already sitting down with CEOs of insurance companies that operate in California because they have to be a part of the table along with consumers, the governor and the state legislature.

- How do you see yourself as a negotiator?

Have you been in tough negotiations before?

Do you feel like that is something you would bring to the job?

- Absolutely.

I spent 12 years on the San Francisco school board and board of supervisors.

I don't think there's better training ground than right here.

But also I happened to be a legislator during the biggest real estate boom in history and the district I represented absorbed 80% of all commercial residential developments.

I negotiated every single one of those deals and I'm proud of the fact that I negotiated more affordable middle housing than any California legislator during my time.

And I believe that is because I sat down the table, I worked with developers to get the projects across the finish line and I negotiated hard on behalf of our communities because we were conferring a benefit from the public to these developers via upzoning and density, which allowed them to make more profit.

And what I asked is for them to share that profit with the community in the form of affordable housing, parks, schools, et cetera.

- All right.

Well, let's get into your big policy proposal.

This is to create what you're framing as essentially a single payer insurance system for natural disasters.

So explain what it is and how it would work.

- Yeah.

So this program would center protecting our communities and homes over corporate profits.

So we all know that we live in the age of the climate crisis.

40 years ago we had a billion dollar storms every three to four months.

We now have one every three weeks.

And the current insurance industry can't handle it.

In fact, the top 10 have been around for over a hundred years and they've done little to innovate to current modern conditions.

And what we've seen historically is that when the risk becomes too high, they exit the market.

So they exit the earthquake market.

So California started CEA, the California Earthquake Insurance.

They largely exited the flood market already, so the government had to set up a national flood insurance program.

Wildfire is headed down the same trajectory, so let's get ahead of the curve.

And this is a program that exists in countries around the world like France, Spain, New Zealand, countries with economies far smaller than California.

And so what I'm proposing is that we claw back some of the premiums we're already spending and we actually use it to invest in prevention, which currently the private market does not do.

- So would that eliminate the private market?

Like what's the actual mechanism here?

- Yeah.

So we've been talking a lot about New Zealand's market, sorry, model because we find it very interesting.

You still buy your insurance on the private market.

So the garden variety risk would still be covered by the market because they do that well.

So the fire in your home because the stove explodes, the flood in your home because the pipe bursts, burglaries, et cetera.

Now the risk line item, which we currently pay to the private market, and New Zealand is paid as a levy to the state from the insurance industry.

So from the consumer's perspective, there's no difference.

And when you file a claim, you still file it with the insurance industry, but the state pays it out and they pay it out quickly and fairly.

- So I mean, this is a huge state and we have had really expensive fires.

I mean, I think the LA costs are 40 billion alone.

I assume you would need to seed this with some money.

Where does that come from?

You need a fund.

I mean, these are companies that have built out of decades of premiums, large essentially bank accounts, right?

- Yeah.

So this would have to happen over stages and we'd have to figure out how to capitalize it in the beginning so that we could pay out claims In year one if fires happened.

And we would look at some sort of exit fee, because like you said, they've been collecting our premiums for decades and investing it.

In fact, their primary business model is that they take our premiums and they invest it in what they call their float.

That's why they've been doing exceedingly well over the last few years is they've been raising our premiums largely on the homes they consider healthy, cancel coverage on the homes that they consider sick or with preexisting conditions, and then fighting our claims every step of the way while investing all of our premiums in the market.

- So how would you price this?

Right now, as a homeowner in San Francisco, my rates have gone up in part because of these wildfires in other areas of the state.

I think that's part of the model is that we're all sharing some risk, but then there's also this question of like, well, you chose to live in a high risk zone, a wildfire zone.

Would those folks be paying more under this plan?

- Yeah.

So pricing risk would include the value of the home and the risk of where they lived.

And by the way, we do a lot of blaming of homeowners.

Most homeowners moved into these wildfire zones way before they became wildfire zones.

In fact, the percentage of homeowners that live in wildfire distressed areas grew by 170% since 2011.

And just because you live in a safe zone today doesn't mean you're going to live in one in five or 10 years from now.

And we have to accept the reality that the climate crisis is driving the failure of the insurance industry.

- I guess one of the reasons that private insurance exists is that yes, there are companies that are making a lot of money off of this and being traded on the stock market and are international conglomerates, but they also are taking on this risk.

So what do you say to people who would be worried that the taxpayers would essentially end up with a huge risk here if we had, God forbid, another year of the 2017 fires, another paradise, another LA?

- We're already paying for it.

- Say more.

I mean - - Yeah, we're already paying for it.

But first of all, they're actually not taking on the risk.

That's a misnomer.

They are raising prices on all the healthy homes and saying that they have to do that because of the risk.

Then they're canceling coverage on all the sick homes and homes with preexisting conditions and then pushing them onto the fair plan.

So they already aren't covering this risk.

And the California Fair Plan, which by the way, is also run by the private market, the 15 insurance companies, and it's one of the most secretive fare plans in the country.

They have a nine person governing board.

We don't know who sits on it.

We don't know when they meet.

We don't have access to their financial models and how they make their decisions.

Because the fair plan is considered nonprofit, when they have gains, they distribute those gains amongst the 15 insurance companies when they make too much money because they're not allowed to hold excess profit.

When they lose money, they just charge all the homeowners and the multi-payer system.

And when insurance doesn't cover the disaster, guess who comes in?

FEMA, state, local and county.

So taxpayers are already on the hook for these wildfires.

And I've been on the hook.

My PG&E bill doubled in the last five years.

- I was going to say, sounds a lot like how utilities operate - Too.

Right.

And so there's all this fight about subrogation, et cetera, but they're really just shuffling the decks on the Titanic.

They're just deciding which industry is going to charge consumers more to pay for wildfires.

Is it going to be utilities or is it going to be the insurance companies?

But we're always paying.

So what I'm proposing is that we claw back some of those premiums we're already spending.

We invested in the market.

We keep those returns.

And then we use some of that revenue to actually invest in prevention because the only way to make insurance affordable and available is to drive down the risk, to flood proof and fireproof entire community so they're not destroyed in the future by floods and fires.

And that is what New Zealand is doing.

Actually, Canada interestingly has single payer auto insurance.

They use a percentage of the premiums to pay for roads and filling potholes so that there are less collisions in the future.

- Yeah.

I mean, I guess that gets me to, well, a few questions, which is like one of them is yes, this is a huge industry, but isn't that also part of the "insurance" they have, which is like they're not just operating in California.

It's a much bigger market.

Do you think we're a big enough market to essentially create this ourselves?

- We are the fourth largest insurance market in the world.

We're the largest market in the country.

Actually, none of these countries.

I mean, sorry.

None of these companies truly want to exit California.

We are 10 to 15% of their revenue base.

Currently, it seems like we have two choices.

We either let them raise rates or they exit California, but they haven't actually really exited.

And also, they provide other types of insurance that are quite profitable, like auto insurance.

And so one of the things that I want to negotiate is that if you provide auto insurance in that zip code and make tons of money, you must provide home insurance as well.

- I wonder like, okay, so we've all been paying for years and decades all these premiums.

If you then create the single payer situation and move the liability away from the companies, is that in itself a giveaway because they're now not, they don't have the risk even though we've all paid them for all these past premiums.

- Actually, I think the industry should want to come to the table to talk about a single payer nonprofit public insurance program for exactly the reason that you mentioned, but I think they're going to exit anyway because they already did that for earthquake and flood.

And I think we just have to prepare for the future where they exit the wildfire market.

Or - You think they're just going to say, "We don't cover you for wildfires.

We'll cover you for other things."

- We saw them do it for earthquake and flood already.

Yeah.

And I think it is just magical thinking to think that wildfire is not headed down that same trajectory.

What I would like to do is assess an exit fee because they have been collecting our premiums for decades to help capitalize the program.

- Yeah.

Do you see the National Flood Insurance Program as a sort of cautionary tale that is a program that has been underfunded by billions and billions because Congress didn't want essentially to charge the rates that were needed to make it solve, not insolvent but solve it.

That's the word I'm looking for.

- We're going to have to make a lot of hard choices and this is going to be a very challenging office to take on, which I fully acknowledge.

And yes, Congress didn't make the right decisions all the time on how to capitalize this program, but I plan to be honest and transparent about what we need to do to move forward.

And most importantly, what I'm prioritizing is that we invest some of our premiums and those returns into protecting communities in the future.

Because really the thing that we want to do is not really figure out how to make insurance work.

We just want to figure out how homes won't be destroyed by wildfires and we have to invest revenue to do that.

And I'm proposing that this public insurance program do exactly that.

- So critics of this plan, who I will note do include some of the consumer advocates, right?

It's not just the insurance industry and your opponent.

I think are worried, even if they like the idea about how difficult it would be to make it happen when we are in a crisis right now, like we did see last year's LA fires, the homeowners, many of them are still waiting for payouts.

We could have another fire any day.

I mean, there's one burning up near Truckee right now, which hopefully will stay under control.

But I guess, first of all, can you walk and chew gum here?

Like what do you want to do in the medium or shorter term if you're also working on what is a very ambitious plan that would not just require regulations, but probably legislative changes as well?

Yeah.

- No, this program would take time to build.

And so in the meantime, what do we do?

One, I'm going to create a wildfire mitigation fund and I'm going to challenge all the insurers to invest some of the profits that they've made from our state into a community-wide mitigation.

And the Department of Insurance would run it and we would invest in high risk, low-income communities to help fireproof these communities.

Because if our communities are safer, actually costs will come down for everyone.

That's the long-term goal.

Yeah.

I mean, - That's one of the problems that your opponent talks about is like if I do work on my home, but my next door neighbor doesn't, we're all more at risk and our insurance premiums stay high.

Right.

- And this would be a form of revenue to cover that.

And long run, we would have the public insurance program to do that long-term.

Two, I want to create a public dashboard because we should know how much of our money is being spent back in claims and how quickly claims are paid out, which is the business that they're in.

Obamacare interestingly set a requirement that 85 cents of every dollar we spend on premiums comes back in the form of claims spending on healthcare.

We don't have that for auto or home insurance.

And the average in California is roughly 48 cents of every dollar gets spent back on claims.

I want to set a floor.

Maybe it's 65 cents for home and 75 cents of every dollar in auto insurance, but we have to make sure that the insurance industry is actually doing the business that they are in, which is paying out claims when disaster strikes.

- And I want to expand our low cost nonprofit auto insurance program in California.

- On home insurance, I wonder, the current insurance commissioner has moved towards trying to.

Well, insurance companies essentially can reward consumers with lower rates if they do like fire mitigation risk, but it's really all over the map in terms of how that's rolled out.

Is that something you would want to standardize?

How would you approach that?

- Absolutely.

So the state legislature passed a bill recently that my opponent worked on where they are setting what types of mitigation and saying that the insurance industry will provide a discount.

But interestingly, the bill sets a ceiling on how much discount you can, but they don't set a floor.

- And - So one thing that the insurance commission can do to fix this flaw, this legal flaw, is that the insurance commissioner determines whether rates are inadequate, excessive or discriminatory.

And if you did 20, $30,000 worth of home hardening and you only got a $50 discount, well then I think your rate is excessive.

And this is where the commissioner can come in to regulate that bill.

- Yeah.

It's complicated though because they're doing very different things for very different consumers, right?

What they're offering can vary house to house.

Are you talking already to like lawmakers or other folks about how to move forward with the single player plan?

Because as I said, I mean, this would be an ambitious proposal.

I mean, you tell me, what's your estimate on how long it would realistically take to get something like that up and running?

Oh, - It's hard for me to say the estimate of time, but what I will say is that I will fight for it and we need to start fighting for it now.

And I think folks, the biggest critique I have gotten, I think, is that I want too much for California and I'll take that critique.

I will fight every day for the state.

What I think is magical thinking is that we can continue doing what we have been doing for the last 20 years and expect a different result.

The legislature has been really tinkering with the system and what has resulted is higher premiums, canceled coverage, and again, claims not getting paid, paid out quickly and fairly.

So I think we need a bold leader that is going to push some big ideas and transform the industry to work for consumers.

- Yeah.

Before I let you go, you also on your website say you want to bring healthcare insurance regulation into the Department of Insurance.

Is that a priority?

- So what I'm actually proposing is to write the plan to make Medicare for kids a reality in California.

And this was not my idea.

It was proposed by another Californian Republican, Richard Nixon, when he ran for president.

And I want to make that - - Never heard you name check Richard Nixon before, Jane I want to make that Republican vision a reality here in California because I think the wealthiest state and the wealthiest nation can afford to guarantee healthcare for every child.

And it's actually, children are fairly cheap from a healthcare perspective.

And so I want to write the plan and bring that to the legislature.

And this office has a huge investigation and study harm and should absolutely be using this office as a bully pulpit to make healthcare more fair.

- So how would that work though?

You don't see the insurance department necessarily taking over what the Department of Managed Healthcare does around the regulation, but this would be sort of a policy area that you would push forward?

Yeah.

- Unfortunately via Prop 103, this office doesn't regulate managed healthcare plans.

It can review healthcare plans and state what they think is fair for consumers.

And actually this office in the past has been able to push legislation based on its recommendations, but it doesn't have direct oversight.

Yeah.

- I wonder, yeah, as you think about sort of you're making this case to voters, when people are worried that you're being sort of overly ambitious, what is your answer there in terms of how homeowners can think about what would happen in a year, two years versus 10 years down the line?

- Well, what I will say is that for all the critiques of these ideas that we're putting out there, which I think we have to at least explore and study and discuss, while we're having that discussion, the current system is not working.

It is too expensive.

The premiums are too high.

They're canceling our coverage.

So my assessment of the current framework is that it's a total disaster.

And so what I'm proposing is to kind of expand the number of ideas that are on the table that we can think about.

And it's going to be a big table.

It is going to involve the governor's office, the state legislature, the industry and consumers as well.

And that's the way it should happen.

But what I will do is be a political and policy leader on putting everything on the table to make this economy work for all of us.

And what I'll end with is that I'm really excited to run for this office.

I really think this office could have a huge impact on California and make the state actually work.

And - Maybe people would actually know who the insurance commissioner is that way.

Maybe, - Maybe.

I'm not betting on becoming famous through this office.

- Jane Kim, candidate for insurance commissioner.

Thank you so much.

Thank you - So much for having me, Marisa.

That's - Going to be a wrap for Political Breakdown today.

We're a production of KQED.

Our engineer is Christopher Beale.

Our producer is Izzy Bloom, and our video team includes Jim McKee, Derek Lartaud, Kate Lowpensky, and Vivian Morales.

I'm Marisa Lagos.

I'll see you next time.