California Insurance Commissioner, Dave Jones, recently made the announcement that the California Department of Insurance received $7.25 million in new investments from insurance companies and banks to help under-served communities in California.
The money was given to a division of the Department of Insurance, known as the California Organized Investment Network or (COIN). In exchange for the contribution, the various insurance companies and banks received a tax credit from the State of California worth 20% of the gift amount.
The main concern for me is the fact these gifts of tax breaks are being given to companies who really do not need a tax break, and they are being given out by the COIN program at a time when the state is so broke that we will have at least two separate ballot initiatives to vote on in the next election to raise taxes and hopefully, keep the state from going under.
The tax breaks were also given out at a time when three cities in California, Stockton, San Bernardino and Mammoth Lakes have filed for Chapter 9 bankruptcy protection. Who are some of the insurance companies that will be benefiting from the COIN program? The following is just a small selection: United Health Care Insurance Company invested $2.8 million in COIN with a tax break of $560,000; Blue Shield of California Life and Health Insurance Company investment $1 million and their tax break, $200,000; and then we have CUNA Mutual Group investing $1.25 million and gaining a tax break of $250,000, and the list goes on.
Just from the companies listed above, we have a total of $1,010,000; that is one million and ten thousand dollars that was not deposited in the General Fund of this state at a time when state workers are being laid off and government services are being suspended or cut off altogether. I am also not comfortable with accepting gifts from the very same insurance companies that have been attempting to raise their premiums by an ungodly amount due to the fact they say they are going broke themselves.
I know from experience that most of the insurance companies in this state and nation have their own charity divisions and could help the under-served communities in this and other states, and probably do a better job administering the program on their own without going through the red tape that a state government provides.
I encourage the California Department of Insurance to please suspend the COIN program on a permanent basis, or at least until the financial condition of this state improves to the point where we do not have our cities declaring bankruptcy.