Insurance Commissioner Ricardo Lara. Campaign photo

My first political boss was a U.S. Senator from California whose political philosophy of government became mine: good governance means services reach as many people as possible.

That is why I am so disappointed in my fellow San Diego State alum, California Insurance Commissioner Richard Lara. When the issue of affinity group discounts for car insurance policies in California was raised by critics, Lara ordered a study to see who precisely benefited from these discounts. Credit where credit is due: such a study had never been done before.

The Department of Insurance study indicated that most beneficiaries of affinity group discounts were educated adults belonging to occupational-based groups: college alumni associations, teachers, lawyers, and the like. To reiterate, occupational groups dominated the studies. Affinity group beneficiaries also tended to be clustered in certain geographic areas—that is to say, in higher-income and majority-white zip codes. In neighborhoods with more black and brown residents, the study showed far less access to discounted car insurance rates.

Commissioner Lara saw these results and saw that policy was needed to level the playing field. But instead of promulgating insurance department regulations that would expand affinity group discounts, he decided that the solution would be scrapping those discounts altogether.

The original plan to axe affinity groups has since softened, but still presents a grave threat to millions of drivers who depend on these discounts. Commissioner Lara is now suggesting that to be a member of an affinity group, one must be a documented member of an exclusive group, such as a labor union or membership-only retailer like Costco.

Suppose, however, that a teacher exercises her Supreme Court-decided right to not belong to a union. That (doubtlessly underpaid) teacher would then not be eligible for a car insurance discount despite her profession. And suppose the teacher is a rookie earning a starting salary below $40,000, compared to the average Costco member income of over $75,000, putting Costco membership out of her reach. Does Commissioner Lara consider “leveling the playing field” to mean stripping away discounts for countless residents — discounts that are available today but not under the new proposed regulations?

Lara’s proposals also restrict the definition of affinity groups for insurance companies. Only a group that can prove exclusive membership, such as a labor union, would be considered an affinity group. This flies in the face of the past thirty years, during which time insurance companies have been able to recognize affinity groups themselves. If Lara prevails, a vast number of California residents would no longer be eligible for affinity group car insurance discounts.

The impact of gutting affinity groups would be far-reaching. Say a longtime employee wants to leave a factory job in San Jose to start a landscaping business. Today, this budding small business would be able to utilize a chamber of commerce or business group discount for its work trucks and family vehicles; not so under the Department of Insurance’s new proposals. The loss of such a benefit might even be the tipping factor keeping someone at their job rather than pursuing their dream, stifling the growth of California’s independent businesses.

Raoul Lowery Contreras

If Commissioner Lara truly wants a level playing field where affinity groups are not primarily for the white and wealthy, he should focus on regulations that expand these groups rather than shrinking them. For example: The Department of Insurance could ensure that any registered California voter can be a member of a Voter Affinity Group. After all, every person who registers to vote must be a California resident, 18 or over, and sign a public registration form–documentable by any standard.

I can only think back to what my first boss in the Senate said all those years ago: good government serves as many of its people as possible. I urge Commissioner Lara to focus on providing access to affinity groups for more residents, rather than disenfranchising the millions of Californians who rely on these discounts to help make ends meet in a notoriously expensive state.

Raoul Lowery Contreras is a Marine Corps veteran, political consultant and author of the new book White Anglo-Saxon Protestants (WASPS) & Mexicans. His work has appeared in the New American News Service of the New York Times Syndicate.

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