“In California, our ongoing partnership with the Governor and Legislature to improve conditions for the consumers, homeowners, and businesses that make up our insurance marketplace is critical to crafting lasting solutions,” suggests the state’s Insurance Commissioner Ricardo Lara.
These comments come as part of a statement in which Lara discussed the next steps for the sustainability of the California insurance market.
“As Insurance Commissioner, I have used every resource at my disposal to protect consumers. We have gone to every corner of the state, listening to thousands of consumers in hundreds of town hall meetings and living rooms,” Lara’s statement began.
He continued, “And we have been leading – from the first-in-the-nation discounts for homeowners and business owners that harden their properties from wildfires, to protecting consumers and businesses by modernizing the FAIR Plan, to supporting landmark investments in wildfire mitigation by the Governor and Legislature.”
“There is no doubt that because of climate change, our planet, country, and state are at an insurance crossroads. Our current path is unsustainable. In California, our ongoing partnership with the Governor and Legislature to improve conditions for the consumers, homeowners, and businesses that make up our insurance marketplace is critical to crafting lasting solutions.”
Lara went on to say that “legislation is one of many options” that he has been pursuing, adding that he is also moving forward with a package of regulatory solutions that will “streamline the Department’s rate review process, opening it equitably to public input — not just the entrenched interests that have benefited materially from the status quo.”
Lara concluded, “We will continue moving forward. Together, we can create a sustainable and resilient insurance market to protect Californians, our communities and our environment.”
Analysts at BMO Capital Markets responded to this statement, noting, “While a legislative deadline recently passed, California’s Insurance Commissioner hinted at a willingness to make substantial changes that would allow insurers to streamline rate requests, among other items.
“As a reminder, most insurers have been losing money in California because they cannot 1) fully price for their forward view of risks increasing; and 2) keep up with inflationary trends given state regulators haven’t allowed for as robust of rate increases versus the country (excl-CA) average.”
