California Insurance Commissioner Implements New Strategy Allowing Insurers to Consider Future Risks, Leading to Premium Hikes
California's Insurance Commissioner, Ricardo Lara, has implemented a new 'sustainable insurance strategy' that permits insurance companies to incorporate catastrophe modeling, including future risks and reinsurance costs, into their rate-setting processes. This change is expected to result in higher premiums for Californians. The department is also working to accelerate the review process for rate-increase requests from insurers. This regulatory shift comes after several insurance companies ceased writing or renewing policies in California due to substantial claims from wildfires and complaints that existing rates did not adequately cover their risks. While some insurers have reportedly resumed writing policies in the state, the exact number of new policies is not yet known. The FAIR Plan, the state's insurer of last resort for fire insurance, has seen its growth slow, which the department cites as a positive indicator of the new rules' effectiveness. Additionally, a new regulation requires intervenors in ...
