In summary

The Department of Insurance proposal would eliminate the “affinity discount,” which affects millions in communities of color.

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By Julian Cañete, Special to CalMatters

Julian Cañete is president and CEO of the California Hispanic Chambers of Commerce,

From Washington, D.C., to Sacramento, government entities are taking unprecedented steps to support workers who have been severely harmed by the economic consequences of the COVID-19 pandemic.  But these unprecedented actions are only making a small dent when it comes to supporting the Hispanic community, which has been among the most impacted by the pandemic. 

That’s why it is striking to me that the California Department of Insurance is still entertaining a proposal to overturn a long-standing policy, approved by voters, that is saving millions of Californians hundreds of dollars a year on auto insurance.

At risk is something known as an “affinity discount,” savings offered to members who purchase insurance through a group affiliation. Typical of these programs are those offered to seniors through senior organizations, teachers, firefighters and peace officers through their unions, and small-business owners through associations such as the California Hispanic Chambers of Commerce.

These group discount programs are not uncommon. About 40% of California drivers participate through such varied organizations as trade associations, labor unions, membership retailers, advocacy groups, auto clubs and the like. 

The members of the California Hispanic Chambers of Commerce, representing the interest of California’s over 815,000 Hispanic business owners, have benefitted from an affinity relationship for nearly a decade. This discount has enabled our members to save much-needed dollars on their home and auto insurance. The last thing the Hispanic community needs now is for the Department of Insurance to take away our insurance discounts.

We can appreciate that Insurance Commissioner Ricardo Lara is seeking to protect low-income Californians and wants to expand discounts to disadvantaged communities. Steps ought to be taken to expand the reach of existing programs, promote their availability in low-income communities and reach out to new groups with networks in those communities to establish group-discount programs of their own.  

Unfortunately, rather than expand discounts, this proposal would eliminate discounts for millions, including the very communities of color and low-income Californians who can least afford to pay hundreds of dollars more per year. 

Despite attending and speaking at countless hearings and sending letters to push back on these proposed regulations, Lara isn’t listening to us. 

The regulations would result in no clear benefit to those in underserved communities and do nothing more than create hardship. Consider small-business owners. On any list of those who have been most severely impacted economically by the pandemic, small business owners would be near the top. 

There are thousands of such businesses in California, the bulk of them consisting of individuals in business for themselves or with no more than a handful of employees. More than 40,000 of them have closed during this year of the pandemic, many of them permanently. Tens of thousands more – diners and cafes, barbershops and nail salons – are hanging on by threads.

For a state agency to eliminate that benefit at this time would be at cross-purpose with everything California is trying to do to prevent more small businesses from closing. These regulations represent increased costs we cannot afford and will limit our ability to access much-needed discounts.

The state must indeed look for ways to reduce costs equitably for all Californians, wherever they live. But to take money from the pockets of ordinary Californians and our minority small businesses just trying to hang on is not the answer. 


Julian Cañete has also written about the ban on flavored tobacco.

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