![]() “We are in really uncharted territory, and we must make difficult choices,” said Lara. Companies may also be allowed to incorporate the costs they pay for reinsurance in California, to hedge against their own risk, in the rates they charge. In exchange, companies will be allowed to use forward-looking catastrophe modeling when they set their rates, models that consumer advocates have objected to in prior negotiations on the grounds that they will lead to higher insurance costs by pricing in increasing wildfire risk. ![]() They will also have to bring on policyholders from the state’s FAIR Plan, the insurance plan of last resort, that has been taking on an increasing share of the riskiest policies in the state, thus skirting insolvency. Here’s the deal: Insurance companies that want to operate in California will be required to increase their presence in disaster-prone areas to at least 85 percent of their market share elsewhere in the state when they file to update their rates. The details will be familiar to anyone who was following the negotiations over wildfire insurance in the legislature, where a deal failed to materialize by the end of the session. Gavin Newsom put out an executive order urging Insurance Commissioner Ricardo Lara to take swift regulatory action to stabilize California’s insurance market.īy 3:30 p.m., the insurance commissioner was holding a press conference on a new agreement the state reached with wildfire insurance companies to - hopefully - bring them back to California. WE HAVE A DEAL - Things moved pretty quickly today. California Insurance Commissioner Ricardo Lara announced a deal to stabilize the state's wildfire insurance market in Sacramento today.
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