California Insurance Commissioner Dave Jones is seeking to mandate that insurance companies pass tax savings they receive as a result of the recent changes to the Internal Revenue Code to policyholders.

In a statement, Commissioner Jones said, "The recent revision to the federal tax schedule for 2018 reduced the corporate tax rate from 35 percent to 21 percent. That means that nationally insurers will now be able to retain even more of policyholder premiums as profit. However, in California the prior approval process that applies to property and casualty insurance rates limits insurer profits. I have directed my staff to commence a regulatory review of these insurers' rates given the major tax windfall under the new federal tax rules. I have also directed staff to consider and identify possible actions in other lines of business where insurers will benefit from the tax cut to see if we can enable their policyholders to also benefit from the lower corporate taxes paid by their insurers."