Insurers are applauding a move by California Gov. Gavin Newsom to try and expedite the insurance rate filing process.
Newsom made the proposal while discussing the state’s budget. It was mentioned in a press conference to talk about the budget, according to people at the conference.
At the conference he mentioned he was working on a bill to expedite the process.
Home insurance rates are on the rise, and availability has also become a concern, as many insurers are pulling back from the wildfire prone state. Proposed solutions to the crisis have included finding ways to expedite rate filings, enabling insurers to use reinsurance rates in filings, as well as enabling them to use catastrophe modeling to set rates.
Many of these proposals indicate a growing interest in making a change to Proposition 103, the 1988 voter-approved law that requires prior approval from the California Department of Insurance before implementing property/casualty insurance rates.
The calls to make changes to Prop. 103 have grown louder as insurers pull back from writing homeowners insurance in the state.
Last May, State Farm announced it had stopped accepting new policy applications for property/casualty insurance in California due to increased risks from wildfires and inflation. Last month, State Farm said it would non-renew 30,000 California homeowners, rental dwelling, and other property insurance policies.
The Hartford announced in January it would discontinue writing new homeowners policies in California. Liberty Mutual in July 2023 stopped offering its business owner’s policy product in the wildfire-prone state and that same month Farmers began limiting new homeowners insurance policies in California.
The American Property Casualty Insurance Association, which has been calling for changes to Prop. 103 for years, applauded Newsom’s comments.
“We appreciate the Governor highlighting this critical issue,” stated Denni Ritter, APCIA department vice president for state government relations. “Expediting the rate review process is a vital component to addressing California’s insurance crisis. We look forward to working with the Administration, Legislature and Department of Insurance on this crucial reform and other reforms necessary to fix our broken regulatory system and increase the availability of insurance for California homeowners, drivers, and businesses.”
Topics California Carriers