Governor Gavin Newsom vetoed a bill that aimed to raise the pay for insurance fraud investigators at the California Department of Insurance (CDI), according to BestWire.
Assembly Bill 2872 proposed increasing CDI fraud investigators’ pay to match the salaries of sworn peace officers at California’s Department of Justice (DOJ).
DOJ agents saw pay increases of 12% in 2021 and 5% in 2023, while CDI investigators only received one 5% raise during the same period.
Newsom stated in his veto message that the bill undermines the collective bargaining process and the California Department of Human Resources’ authority to set salaries. He emphasized that setting wages for one department in statute restricts the state’s ability to consider broader factors that impact compensation proposals across various state employee groups during negotiations.
The CDI argued that 75% of its investigators leave to become DOJ special agents, causing significant staff shortages. Gabriel Sanchez, the CDI’s press secretary, highlighted the critical nature of the issue, describing the loss of personnel as a “cascade effect.”
California Insurance Commissioner Ricardo Lara supported the bill, citing the importance of addressing insurance fraud, which he described as a multibn-dollar issue that affects vulnerable populations, including seniors and immigrant communities. Lara stressed the need to recruit and retain skilled investigators to protect consumers and the state’s economy.
Insurance fraud is a major national issue, with the Coalition Against Insurance Fraud estimating an annual economic impact of $308.6bn. California alone faces $17.2bn in yearly losses due to these crimes, according to the CDI.
Attempts to get further comments from the CDI about the veto were unsuccessful.