California Insurance Regulations June Update

On June 12, California Insurance Commissioner Ricardo Lara released details of his plan to increase the writing of homeowners and commercial insurance policies in areas of the state with high wildfire risk. This action is the next step of his Sustainable Insurance Strategy that will help change the FAIR Plan. His proposed changes include:

• Incorporating the use of forward-looking catastrophic models in ratemaking across California.
• Requiring insurance companies to detail where they are writing policies as well as for them to account for policyholders’ steps to mitigate wildfire risk.
• A statewide wildfire map showing areas where wildfire risk and FAIR Plan policies are concentrated, providing insurance companies information of where they need to write more policies in the state using catastrophic modeling.
• Insurance companies will be required to take FAIR Plan policies facing wildfire risk from more urban areas.

The goal, he said, is to increase the options for insurance coverage and availability beyond the California FAIR Plan, which in many cases has become the only option for insurance, instead of the last resort as it was intended. According to Commissioner Lara, this approach will cover at least 85% of properties in distressed areas.

Commissioner Lara will hold a public workshop on June 26 to release the changes he’s making to regulatory text in the state’s law that will incorporate catastrophic models.

Below you will find links for additional information from the California Department of Insurance:

• California Department of Insurance – FAQ for Insurance Commitments in Wildfire Distressed Areas
• Catastrophe Modeling and Ratemaking Insurer Commitments to Increase Writing of Policies in High Risk wildfire Areas – Workshop Draft Text of Regulation
• Invitation to Workshop Regarding Catastrophe Modeling and Ratemaking – Insurer Commitments to Increase Writing of Policies in High Risk Wildfire Areas
• California Department of Insurance – Presentation on Insurance Commitments in Wildfire Distressed Areas
• Press Release Unveiling Commissioner Lara’s Steps to Increase Coverage Options for Areas of High Wildfire Risk

As your advocate across the state, CACM will continue working with Commissioner Lara and other insurance reform coalitions to make sure your concerns are voiced and heard.

Posted June 13, 2024

Previous CDI communications about Insurance/ Insurance bill/ State Farm’s California Coverage Changes:

CDI Invitation to Workshop (March, 2024)
CDI Workshop Draft (March, 2024)
CDI Consumer Alert (March, 2024)
AB-2996 introduced by Assembly Member Alvarez
State Farm Pulls Out of California