California senators urge insurance commissioner to address homeowners’ market crisis
California senators urge insurance commissioner to address homeowners’ market crisis | Insurance Business America
Insurance News
California senators urge insurance commissioner to address homeowners’ market crisis
They list actions that “[have] to happen” to ensure a healthier market
Insurance News
By
Mika Pangilinan
California Senate Republicans are calling on state regulators to tackle the escalating crisis within the homeowners’ insurance market.
In a letter penned to Insurance Commissioner Ricardo Lara, Senate Minority Leader Brian W. Jones (R-San Diego) expressed the need for intervention, citing how multiple carriers have already withdrawn from the state.
Actions that the senators said “[have] to happen” to ensure a healthier market include rate adjustments, as well as reinsurance and prospective catastrophic modeling.
They also stressed the need for a faster rate review process, in addition to authorizing insurance discounts for home-hardening.
“You can begin this process yourself, now,” the letter urged Lara. “This is a critical time for decisive leadership from California’s elected insurance commissioner and the department you head.”
To highlight the significance of the issue, Senator Brian Dahle (R-Bieber) also spoke from the perspective of his constituents residing in high-fire severity zones.
“Californians can’t afford for a catastrophic wildfire to collapse the market and leave those insured without the coverage they may need to rebuild,” said Dahle.
Under Proposition 103, a ballot measure passed by California voters in 1988, insurance companies are required to receive prior approval from state regulators before they can implement changes to their rates.
Experts have said that recent delays in the rate review process make it difficult for insurers to raise rates that would help them keep pace with higher costs brought about by inflation and climate-related risks.
“While the legislature has failed to act, Insurance Commissioner Lara has the power to begin solving these problems under his current authority and we stand ready to work with him to fix this broken market,” said Jones.
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