ADDITIONAL COMMITTEE MEMBERS
WILL BE HERE. IN FIVE TO TEN
MINUTES SO ONE THE
APPROPRIATIONS COMMITTEE.
FINISHES ITS WORK. I DO HAVE A
BILL TO PRESENT TO THE
COMMITTEE. WELCOME MR GRAYSON.
I HAVE A BILL TO PRESENT TO THE
COMMITTEE AND I THINK I'LL DO
THAT WHEN THERE'S- COUPLE
MEMBERS. NOW JUST ONE ONE
LITTLE BILL. MISTER NORWOOD
HERE YET HE'S HE'S OKAY HE'S
THE OTHER AREAS. BECAUSE HE'S A
SPEAKING ON ON THE BILL THAT.
WILL BE PRESENTED. WAS IT THAT.
WHO LET THE WISE GUY IN. HEY
.
ROLL IT. SO I'M GONNA GO AHEAD
PRESENT THIS BILL TO THE
COMMITTEE ACTING AS A SUB
COMMITTEE WE DON'T HAVE A
QUORUM YET. AND ALL ALASKA
MISTER CHEN THE RANKING
REPUBLICAN. TO TAKE THE GAVEL
HERE. THANK YOU MISTER CHAIRMAN
THANK YOU FOR I DIDN'T GIVE YOU
ANY ANY NOTICE BUT TO. GO THANK
YOU SO MUCH OKAY. YEAH YEAH
.
RESERVE THE RIGHT. WHICH CHURCH
REPORTER. THANK YOU. THANK YOU
THIS IS AB TWO NINE FIVE
REGARDING THE ACCOUNTING
STANDARDS BY WHICH TITLE
COMPANIES OPERATE. THIS BILL
CHANGES THE FORMULA FOR
DETERMINING WORKING CAPITAL FOR
UNDER WRITTEN TITLE COMPANIES
FOR UNDER WRITTEN TITLE
COMPANIES AND CLARIFIES THE
CURRENT LIABILITIES DO NOT
INCLUDE THOSE THAT ARE DERIVED
FROM OPERATING LEASE
OBLIGATIONS. THIS BILL HAS
BECOME NECESSARY BECAUSE A NEW
STANDARD ADOPTED RECENTLY. BY
THE NATIONAL FINANCIAL
ACCOUNTING STANDARDS BOARD
COULD RESULT. IN INCREASED
COSTS FOR REAL PROPERTY
TRANSACTIONS INCLUDING HOME
PURCHASES WHILE PROVIDING KNOWS
SUBSTANTIVE IMPROVEMENT TO THE
DEPARTMENT OF INSURANCE IS
FINANCIAL REGULATION PROGRAM.
WITH ME TODAY IS JOHN NOR WOULD
REPRESENTING FIRST AMERICAN
FINANCIAL CORPORATION WHO WILL
SPEAKER REGARDING THE BILL.
GERMAN MEMBERS JOHN NORWOOD ON
BEHALF OF FIRST AMERICAN THIS
IS A STRANGE SITUATION WHERE
OUR MEMBERS ARE REALLY CAUGHT
BETWEEN THE RULES OF THE
NATIONAL COUNTING BOARD AND THE
DEPARTMENT OF INSURANCE AND WE-
ARE PREFERENCES TO COMPLY WITH
THE DEPARTMENT OF INSURANCE AND
THIS BILL ALLOWS US TO DO. TO
DO THAT FOR THOSE REASONS WE
SUPPORT THE BILL. GO AHEAD
CREEK MR CHAIRED MY NAME IS
CRAIG PAGE WITH CALIFORNIA LAND
TITLE SO SURE SURE WERE ALSO CO
SPONSOR ON THIS. OF THE AUTHOR
IS LAID OUT THE TERMS OF THE
BILL IF YOU HAVE ANY QUESTIONS
I'M HERE TO ANSWER ANY OF.
THANK YOU MISTER CHAIRMAN DO WE
HAVE ANY OTHER WITNESSES IN
SUPPORT. THE BILL. I'M RACKING
AS A SUB COMMITTEE RIGHT NOW
COOLEY WILL GET TO THAT WE GET
TO A QUORUM. TO ANYONE ELSE'S
IN. OPPOSITION. SEE NONE OF
MISTER WOULD YOU LIKE TO CLOSE
YES I APPRECIATE THE ATTENTION
TO THIS AND I THINK THE
RATIONALE IS PRETTY CLEAR AND I
APPRECIATE THE GESTURE BY MR
COOLEY TO. MAKE A MOTION A. IN
WILL THE WILL HOPE FOR ANOTHER
ONE WHEN THERE'S A QUORUM.
PRESENT ANNA ARE THERE ANY
QUESTIONS I CAN ANSWER NOW ON
THIS. OKAY PLEASE WAIT FOR A
QUORUM SHOULD BE FOR ANOTHER
FIVE OR TEN MINUTES THANK YOU
MISTER. MISTER CHAN
. THANK YOU
SO MUCH FOR. IT IS RUNNING. IF
THEY WANT CHANGES. THE STAFF.
DID YOU. ONE ONE. WHAT ABOUT
THE. THANKS AGAIN TO MR CHEN
FOR. HANDLING THE GAVEL
ALTHOUGH WE ARE WAITING FOR A
QUORUM I THINK WE'LL GO AHEAD
AND GET UNDER WAY WITH THE
INFORMATIONAL HEARING TODAY. ON
THE CALIFORNIA FAIR PLAN. AGAIN
THIS IS INFORMATIONAL THERE'S
NO VOTES SCHEDULED TO BE TAKEN
THIS IS SIMPLY TO. PROVIDE AS
MUCH HELPFUL INFORMATION. TO
LEGISLATORS AND THE PUBLIC. AS
WELL WE CAN POSSIBLY THE PUT
OUT SO. WE OFFER FOUR PANELS.
IN THE FIRST ONE. WILL BE LED
BY THE PRESIDENT OF THE
CALIFORNIA FAIR PLAN. IN A
LEAST GIOVANE. WITH A
MISCHIEVOUS WILL BE CLOSED IN
BROWN FROM THE SURPLUS LINES
ASSOCIATION OF CALIFORNIA WHO
HAVE A ROLE IN THIS IN THE FAIR
PLAN. GO AHEAD ANALYST GOOD
MORNING MISTER CHAIRMAN AND
THANK YOU FOR THE OPPORTUNITY
TO SPEAK ANA INFORM EVERYBODY
ABOUT THE FAIR PLAN. AN
ORGANIZATION I'M VERY PROUD TO
LEAD I BELIEVE ALL OF YOU HAVE
OUR HANDOUTS. SO I DID THIS
JUST TO MAKE A LITTLE EASIER
JUST KIND OF FOLLOW WHAT I'M
GIVING A LOT OF INFORMATION SO
JUST WANT TO GET AN OPPORTUNITY
TO WRITE THINGS DOWN IF YOU
ACTUALLY RIGHT THREE PRODUCTS
THE ONE I'LL BE TALKING ABOUT
TODAY IS THE DWELLING PRODUCTS
THE ONE BASICALLY FOR
HOMEOWNERS. OUT THAT'S OUR
BIGGEST BOOK OF BUSINESS WE
WRITE SOME COMMERCIAL ABOUT
FOUR THOUSAND POLICIES AND SOME
BOP ABOUT TWO HUNDRED POLICIES.
THOSE TEND NOT TO BE THE ONES
PEOPLE WANT TO HEAR ABOUT. AND
DON'T SEEM TO BE ON ANYBODY'S
RADAR SO EVERYTHING I TALK
ABOUT TODAY WILL BE ABOUT A
DWELLING PRODUCT. JUST TO MAKE
THAT CLEAR. YEAH WITH A FOUR.
IF YOU WOULDN'T MIND STOPPING
FOR JUST A FEW DON'T MIND
COUPLE MINUTES BECAUSE WE NOW
HAVE A QUORUM. OF THE IT'S A
GOOD FORM. AND THE I'M GONNA
TAKE ROLE WE'RE GONNA TAKE ROLE
ESTABLISH A QUORUM AND THEN
VOTE ON ON MY BILL AND THEN
WE'LL COME BACK TO THE-
INFORMATIONAL HEARING. DALY
HERE MAYES BERMAN. BIGELOW
CALDERON TEN YEAR. TWO COOLEY
COOPER FRAZIER GIPSON GRAYSON
KAMLAGER-DOVE VOEPEL. ALL RIGHT
THERE EIGHT MEMBERS PRESENT AND
THE- APPRECIATE. MAYBE TO THEM
MOTION BY MISTER COOLEY SECOND
BY MISTER BIGELOW ANY FURTHER
QUESTIONS OR COMMENTS ON THAT
BILL IF NOT TO ROLL CALL VOTE
ON AB TWO NINETY FIVE ON THE
MOTION AS WITH THE
RECOMMENDATIONS THAT SENATE
AMENDMENTS BE CONCURRED IN
DAILY OUR DAILY I MAYES. BERMAN.
BIGELOW BIGELOW I CALLED AROUND
CALDERON AYE CHAN. CHAN I CHU.
COOLEY COOLEY AYE COOPER AYE
COOPER AYE FRAZIER. SEN GRAYSON
GRAYSON I COME WATER DOES
VOEPEL VOEPEL I. IS A TWO ZERO
THANK YOU THAT BILL PASSES OUT
OF THIS COMMITTEE ON AN EIGHT
TO ZERO VOTE. NOW WILL RETURN
TO THE FAIR PLAN THANK YOU. ALL
RIGHT SO I JUST A QUICK RECAP
HERE CALIFORNIA FAIR PLAN WAS
CREATED IN NINETEEN SIXTY EIGHT
BY STATUTE SO WE'VE BEEN AROUND
FIFTY ONE YEARS. WE WERE
CHARGED WITH FOR PURPOSES ONE
CREATED FIRST WAS TO ASSURE THE
STABILITY AND THE PROPERTY
INSURANCE MARKET SO WHAT THAT
MEANS IS PEOPLE NEED TO BE ABLE
TO GET MORTGAGES IN ORDER TO
GET A MORTGAGE YOU NEED AN
INSURANCE POLICY OUR POLICY
SATISFIES THAT MORTGAGE
REQUIREMENT. A NUMBER TWO WAS
TO ASSURE THE AVAILABILITY OF
BASIC PROPERTY INSURANCE YOU
KNOW WE WRITE A NO FEELS NO
FRILLS PRODUCT AND AGAIN WE
KIND OF WITH THAT WOULD SATISFY
THAT SECOND REQUIREMENT THIRD
TO ENCOURAGE THE MAXIMUM USE OF
IN OBTAINING BASIC PROPERTY
INSURANCE OF THE NORMAL
INSURANCE MARKET OTHER THE-
INSURANCE COULD ACTUALLY
DEFINES THE NORMAL INSURANCE
MARKET AS BOTH ADMITTED
CARRIERS AND SURPLUS LINES
CARRIERS. AND I JUST WANT TO
CLARIFY THAT JUST BECAUSE
THAT'S THE NORMAL MARKET THAT
DOESN'T MAKE THE FAIR PLAN THE
ABNORMAL MARKET. JUST WANTED TO
CLARIFY THAT. IN ALSO LASTLY TO
INSURE QUALIFIED PROPERTY FOR
WHICH BASIC PROPERTY INSURANCE
CANNOT BE OBTAINED THROUGH THE
NORMAL INSURANCE MARKET. WE'RE
THERE FOR YOU WE WILL WRITE
ANYWHERE IN THE STATE WE WERE
AS LONG AS THE PROPERTY IS IN
TROUBLE CONDITIONAL GOING TO
THAT A LITTLE BIT MORE LATER.
BUT THE REASON PEOPLE DON'T
TEND TO KNOW ABOUT THE FAIR
PLAN EITHER IS BECAUSE. YOU
ONLY NEED TO KNOW ABOUT US WHEN
YOU CAN'T GET INSURANCE
ELSEWHERE SO THE LAST TIME THE
FAIR PLAN WAS SORT OF. YOU KNOW
IN THE PRESS IF YOU WILL
GETTING A LOT OF ATTENTION WAS
AFTER THE NORTHRIDGE EARTHQUAKE
WHEN THE INSURANCE MARKET KINDA
SEIZED UP SO THAT'S ABOUT THE
LAST TIME THE FAIR PLAN WAS
REALLY. YOU KNOW IN THE
LIMELIGHT IF YOU WILL BECAUSE
WE WERE THERE TO FILL IN THE
MARKETPLACE BECAUSE THERE WAS
AT THAT TIME THERE WAS A REAL
DIFFICULT IN THE ENTIRE STATE
TO ATTEMPT INSURANCE. WE'RE
SEEING A LITTLE BIT ABOUT NOW
SO AGAIN THIS IS NOW WHY THE
FAIR PLAN KEEPS BUBBLING UP I'M
OCCASIONALLY ASKED IF WE
ADVERTISE IN THE ANSWER IS NO
NOBODY SHOULD KNOW ABOUT US
UNLESS THEY CAN'T GET INSURANCE
ELSEWHERE SO WE KINDA RUN BELOW
THE RADAR. I ALSO FIND MYSELF
SAYING REGULARLY THAT I WORK IN
OPPOSITE WORLD FOR ME SUCCESS
IS DEFINED BY A SHRINKING BOOK
OF BUSINESS FOR ME WHEN NOBODY
KNOWING ABOUT US IS A GOOD
THING. SO IN MANY WAYS WERE
SORT OF THE OPPOSITE OF THE OF
THE NORMAL INSURANCE MARKET
WERE ABSOLUTELY THERE FOR THE
MARKET PLACE WHEN IT NEEDS US
BUT IF YOU DON'T NEED TO KNOW
ABOUT US THAT'S A GOOD THING.
THAT MEANS WE HAVE A VERY VERY
HEALTHY MARKET. MOVING ON THE
SIDE THREE. AGAINST LIVERMORE
BACKGROUND. FAIR PLAN IS NOT A
STATE AGENCY I FIND THAT
PEOPLE. SOMETIMES THINK THAT'S
THE CASE. RUSSIA PRIVATE
ASSOCIATION COMPRISED OF ALL
INSURERS. LICENSE TO WRITE
PROPERTY INSURANCE IN
CALIFORNIA SO IF IT'S AN
ADMITTED INSURER. IN THE STATE
OF CALIFORNIA THEY HAVE A
CHOICE THEY HAVE TO BE A MEMBER
OF THE ASSOCIATION. AND WHAT
THAT MEANS HIS THOSE SAME
COMPANIES ARE ARE NOT OFF THE
HOOK WE HAVE THE ABILITY TO
ASSESS THE INSURERS. IF WE NEED
MONEY TO PAY CLAIMS NOW THE
GOAL IS OF COURSE NOT TO EVER
GET IN THAT POSITION WE NEED TO
HAVE ACTUALLY SOUND RATES WE
NEED TO BE ABLE TO PAY LOSSES
OVER TIME. THE NORMAL INSURANCE
MARKET IS BUT BASIC AND WE'RE
BACK BY THE MARKET SO THERE
WILL NEVER BE AN OPPORTUNITY
WHERE THE FAIR PLAN CANNOT PAY
CLAIMS AND THAT'S A VERY VERY
GOOD POSITION TO BE IN. THERE'S
PUBLIC FUNDING NOR TAXPAYER
MONEY IS INVOLVED. THIS IS
SOMETHING TO THAT PEOPLE ARE
SURPRISED TO HEAR WERE VERY
SMALL ORGANIZATION WE HAVE LESS
THAN SIXTY EMPLOYEES WE ARE A
FULL FULL SERVICE INSURANCE
COMPANY WAS LESS THAN SIXTY
EMPLOYEES WE DO IT ALL. WE
WRITE THE BUSINESS WEEK. HANDLE
THE CLAIMS WE AYE BY
REINSURANCE WE DO PRETTY MUCH.
EVERYTHING A NORMAL INSURANCE
MARKET AS ONLY WITH A MUCH
SMALLER STAFF WE ALSO SERVICE
OUR POLICIES MAILER HELP OUR
POLICYHOLDERS HELP BRING HELP
NEW BROKERS UNDERSTAND HOW TO
USE OUR SYSTEM AT CETERA. THE
GOOD THING ABOUT SUCH A SMALL
STAFF IS WE ALSO HAVE VERY LOW
EXPENSES WHICH WERE ABLE TO
PASS ALONG A RATES WE WANT TO
KEEP OUR EXPENSES DOWN. TO TRY
TO KEEP RATES AS LOW AS
POSSIBLE AND THAT'S ANOTHER
THING MY STAFF TENDS TO CALL ME
A BUDGET HAWK AND THEY'RE
RIGHT. MY GOAL IS TO LET'S KEEP
EXPENSES DOWN AGAIN SO WE DON'T
HAVE TO PASS THAT ON. IN
PREMIUM. MOVING ON A PAGE FOR
SO WHERE DOES THE FAIR PLAN
RIGHT. FAIR PLAN RIGHTS IN ANY
LOCATION IN CALIFORNIA SUBJECT
TO VERY LIMITED UNDERWRITING
GUIDELINES INCLUDING. OF THE
HOUSE MUST BE AN INSURABLE
CONDITION WHAT THAT MEANS IS
BASICALLY NO ON REPAIR DAMAGE
IT'S A PRETTY LOW BAR SO. HOME
CAN'T BE VACANT FOR MORE THAN A
YEAR. AGAIN NOT SOMETHING
WITHIN THE CONTROL THE
HOMEOWNER AND NOT ATTRACTS A
WHOLE LOT OF. LOS ACTIVITY AND
SO THAT'S ONE OF OUR RULES AND
LASTLY NO ILLEGAL ACTIVITIES
CAN TAKE PLACE AT THE PROPERTY
IN YOU'D BE SURPRISED WHAT WE
SEE AND WHAT WE FIND WITH
INSPECTIONS BUT WE WON'T WRITE
THOSE POLICIES. FOR ALL INTENTS
AND PURPOSES WE WRITE JUST
ABOUT ANYTHING SO AGAIN WE WILL
WRITE I TELL PEOPLE THIS ALL
THE TIME I WILL WRITE A WOOD
CABIN WITH THE WOOD ROOF IN THE
MIDDLE OF A FOREST WITH NO FIRE
PROTECTION. THAT'S WHAT WE'RE
THERE FOR. I WILL ALSO WRITE
PROPERTIES THAT AREN'T THAT
EXTREME. BUT FOR WHATEVER
REASON. CAN'T GET INSURANCE
ELSEWHERE THAT'S OUR ROLE IN
THE MARKETPLACE IS TO MAKE
SURE. THAT THE PROPERTY
INSURANCE MARKET IS STABLE THAT
PEOPLE CAN IN FACT GET
INSURANCE WE ARE THERE FOR THEM.
SO THERE WILL NEVER BE A
SITUATION WHERE A POLICY HOLDER
WHO YOU KNOW. HOUSE A HOUSE
THAT'S NOT YOU KNOW. THAT DOES
HAVE A REPAIR DAMAGE OR THAT
THEY'RE NOT YOU KNOW DOING
THEIR THEY DON'T A METH LAB
WHAT YOU'D BE SURPRISED HOW
MANY OF THOSE WE FIND. AND THE
HOUSE HAS BEEN VACANT FOR MORE
THAN A YEAR ABSOLUTELY THAT'S
WHAT WE'RE THERE FOR WE WILL
WRITE YOU. SO I JUST WANT TO
KIND OF PUT EVERYBODY'S MIND IT
IS WE CAN DEFINITELY MAKE SURE
PEOPLE ARE TAKEN CARE OF. AND
PROBABLY WHAT'S MOST IMPORTANT
THESE DAYS IS WE WILL ENSURE A
PROPERTY REGARDLESS OF ITS
EXPOSURE TO BRUSH WILD FIRE.
AGAIN THAT'S WHAT WE'RE THERE
FOR. WE WILL NEVER TURN AWAY
PROPERTY BASED ON LOCATION THAT
IS NOT ONE OF OUR CRITERIA. WE
WILL WRITE WHAT EVER. A
CUSTOMER NEEDS US TO WRITE ON A
PROPERTY. AGAIN THIS GOES BACK
TO OUR PURPOSE THAT WHITE SORT
OF START WITH THE FOR PURPOSES
OF THE FAIR PLAN TO ASSURE
STABILITY IN THE MARKETPLACE
AND TO ENSURE AVAILABILITY AND
MARK PLACE WE TAKE THOSE THAT
ROLE VERY VERY SERIOUSLY. SO
MOVING ON THE SIDE FIVE. WELL
MORE OF WHERE THE FAIR PLAN
RIGHT. CAN WE WRITE ALL
PROPERTIES INCLUDING HIGH RISK
PROPERTIES REGARDLESS OF
CONCENTRATIONS YOU MAY HAVE
HEARD SOME CONVERSATIONS ABOUT
CONCENTRATIONS LATELY WE DO NOT.
CONSIDER CONCENTRATIONS WHEN WE
WRITE POLICIES IF WE HAVE TO
WRITE ALL TEN HOMES ACTUALLY WE
PROBABLY HAVE THIS WE WRITE A
LOT OF POLICIES IN MALIBU
MALIBU. FOR MANY MANY DECADES
HAS BEEN KNOWN TO BUILD
MELBOURNE'S EVERY SO OFTEN I
THINK THAT'S PRETTY WELL KNOWN
WE READ A LOT OF POLICIES
AMOUNT WILL WRITE EVERY SINGLE
POLICY IN A ZIP CODE IF NEED BE
WE DON'T CONSIDER CONCENTRATION
OF POLICIES AGAIN THAT WOULD BE
COUNTER TORE PURPOSE IN THE%
MARKETPLACE. SO WE ACTUALLY
HAVE SOME SIGNIFICANT
CONCENTRATIONS OF POLICIES IN
CERTAIN POCKETS OF THE STATE
BUT AGAIN I STRESS THAT'S WHAT
WE'RE THERE FOR NOW THE NORMAL
INSURANCE MARKET YOU KNOW THEY
MIGHT BE LOOKING AT SPREADING
THE RISK OUT WHICH CANDIDLY IS
A VERY SMART THING TO DO FROM A
LOS PERSPECTIVE. BUT AGAIN FROM
WHERE WE'RE COMING FROM WE WILL
NOT WE WILL NOT TURN ANYBODY
AWAY BECAUSE WERE WRITING TOO
MANY PROPERTIES IN THAT AREA
THAT WOULD NEVER OCCUR WITH US
AND AGAIN ON TOP OF THAT WILL
ALSO READ THE HIGHER RISK PROP.
PROPERTIES WILL WRITE A WOULD
ROOF. YOU KNOW THERE A LOT OF
COMPANIES WON'T UNDERSTANDABLY.
WILL WRITE A WOULD ROOF IN THE
MIDDLE OF A FOREST IF NEED BE
AGAIN WE WRITE THE HIGH RISK WE
RIGHT CONCENTRATIONS. HOWEVER
MOVING ON TO PAGE SIX. NOW I'VE
TALKED A LOT ABOUT BRUSH
WILDFIRE BUT THE FAIR PLAN
HISTORICALLY HAS BEEN AND URBAN
WRITER OF BUSINESS IN FACT 61%
OF OUR BUSINESS TODAY. IS URBAN
BUSINESS WE WRITE HELLO IN FACT
ABOUT 80% ACTUALLY THE LESSON
ABOUT 75% OF OUR BUSINESS IS IT
IS IN LA COUNTY WE WRITE. A
TREMENDOUS AMOUNT OF URBAN
BUSINESS STILL THE MAJORITY OF
WHAT WE WRITE SO WHEN PEOPLE
HEAR ABOUT THE FAIR PLAN THEY
DON'T ALWAYS THINK THAT. BUT
THE URBAN CUSTOMER IS OUR CORE
CUSTOMER STILL AT THIS POINT.
WE ENSURE TWO POINT 7% OF THE
HOUSING UNITS IN CALIFORNIA.
THAT ARE CONSIDERED IN HIGH AN
EXTREME WHILE FOR RISK AREAS.
WHAT THAT MEANS IS NINETY SEVEN
POINT 3% OF THE HOUSING STOCK
IN THOSE AREAS ARE WRITTEN BY
THE NORMAL INSURANCE MARKET
THAT'S A PRETTY STRONG
STATISTICS SO WE'RE THERE FOR
THE FOR THE SMALL. NUMBER OF
PEOPLE WHO ACTUALLY NEED US BUT
THE GOOD NEWS IS THE VOLUNTARY
MARKET IS STILL VERY VERY
ACTIVE IN THESE AREAS NOT
THAT'S A SIGN OF A HEALTHY
VOLUNTEER MARKET. NOW THAT SAYS
WE HAVE GROWN. TWENTY TWO
THOUSAND ONE HUNDRED AND ONE
DWELLING POLICIES IN THE LAST
TWELVE MONTHS NOW THAT'S LET ME
PUT THAT IN CONTEXT FOR YOU
SINCE TAKING OVER THE FAIR PLAN
ABOUT TEN YEARS AGO WE'VE BEEN
STEADILY DECLINING ABOUT
ANYWHERE BETWEEN A HUNDRED AND
THREE HUNDRED POLICIES A MONTH.
SORT OF A SLOW. SLOWED DROP OFF
IN THE LAST MONTH WE'VE GROWN.
SO. DEPENDING ON HOW YOU LOOK
AT THIS NUMBER THE WAY I LOOK
AT THIS NUMBER IS OKAY I SAW
THE FRONT PAGE OF THE
SACRAMENTO BEE THIS MORNING AND
SAID THREE HUNDRED AND FIFTY
THOUSAND POLICIES WERE NON
RENEWED BY THE INSURANCE
INDUSTRY UNIFORMLY PICKING UP
TWENTY TWO THOUSAND OF THOSE.
THAT MEANS WE STILL VERY
HEALTHY VOLUNTARY MARKET AND
ALSO MEANS. THAT THE SYSTEM IS
WORKING BECAUSE THESE TWENTY
TWO THOUSAND CUSTOMERS ARE
COMING TO US WHEN THEY NEED US
SO AGAIN OVERALL THE SYSTEM IS
WORKING IF I COULD AND BY THE
WAY ANY COMMITTEE MEMBERS WHO
HAVE QUESTIONS FOR ANY OF THE-
SPEAKERS OF A PLEASE GO AHEAD
NASCO. OR MAYBE WE SHOULD WAIT
UNTIL THE SPEAKERS FINISHED BUT
ON THAT POINT I THINK IT'S
IMPORTANT TO HIGHLIGHT. THAT
THREE HUNDRED AND FIFTY
THOUSAND OR WHATEVER THAT THREE
HUNDRED PLUS THOUSAND THAT'S
OVER A PERIOD OF FOUR YEARS
CORRECT YOU KNOW I JUST SAW
THAT THE HEADLINE SO I YEAH.
YOU DON'T THEIR SUMMARIZING
ACCUMULATIVE NUMBERS OVER I
THINK IT WAS A FOUR YEAR PERIOD.
BECAUSE THAT DOESN'T SQUARE
WITH THE NUMBER THAT YOU JUST
GAVE US FOR THE PAST YEARS
INCREASE. OKAY THAT POINT TAKEN
AGAIN I JUST READ THE HIGH JUST
READ THE THANK YOU MISTER
CHAIRMAN WELL LIKE I SAY YEAH.
THEY'LL BE OTHERS SPEAKERS
TALKING ON THE DATA THIS
MORNING AND WILL HAVE A CHANCE
TO. SEPARATE FACT FROM FICTION
I GUESS ABSOLUTELY PLEASE COULD
YOU PLEASE CONTINUE THE BATON
SO WHAT I CAN POINT TO
FACTUALLY AND ACCURATELY IS
THAT WE'VE GROWN TWENTY TWO
THOUSAND AND ONE I. WANTED ONE
POLICIES IN LAST YEAR WELL. NOW
LET ME BE REALLY CLEAR FOR
THOSE TWENTY TWO THOUSAND
CUSTOMERS. IT FEELS LIKE AN
AVAILABILITY CRISIS. I'M NOT
GONNA DO MINIMIZE HOW THESE
PEOPLE MUST FEEL ABOUT THE
INSURANCE AVAILABILITY FOR
THEIR PROPERTY IT'S PROBABLY A
REALLY BAD FEELING BUT THE GOOD
NEWS IS. THAT THE VAST MAJORITY
OF THE CUSTOMERS WHO'VE BEEN
NON RENEWED BY THEIR INSURANCE
COMPANY CAM FIND INSURANCE
ELSEWHERE IN FACT IF YOU LOOK
THE LAST BULLET ON THE PAGE.
WHICH NEW BUSINESS OVER TIME
AND HAVE BEEN SINCE LAST
NOVEMBER YOU CAN WELL IMAGINE
WE WERE EXPECTING A AN INCREASE
IN BUSINESS AFTER THE CAMP
WOLSELEY FIRES. AM THE POLICIES
THAT WE WROTE AS NEW BUSINESS
IN NOVEMBER. ALMOST ONE OUT OF
FIVE OF THOSE POLICIES ARE NO
LONGER WITH US BY THE END OF
JULY. THAT'S A VERY STRONG
STATISTIC WHAT THAT TELLS ME
WHAT I TAKE FROM THE STATISTIC
IS THAT PEOPLE ARE PANIC BUYING
FROM US. AND THAT'S EXACTLY OUR
ROLE WE DON'T WANT ANYBODY TO
GO WITHOUT INSURANCE NO MATTER
HOW LONG IF IT'S A IF IT'S A
DAY IF IT'S A WEEK OF ITS A
MONTH. THEY SHOULDN'T GO
WITHOUT PROPERTY INSURANCE AND
THEY ARE WELCOME TO AND THEY
ARE ABLE TO COME TO THE FAIR
PLAN AND GET INSURANCE. UNTIL
SUCH TIME THAT THEY HAVE THE
OPPORTUNITY. OR CANDIDLY THE
TIME BECAUSE IT DOES TAKE TIME
TO SHOP AROUND AND GET
INSURANCE ELSEWHERE I CAN SPEAK
FOR THE TIME I REASON I'M I'M
AN INSURANCE CUSTOMER I
RECENTLY WENT THROUGH THIS
PROCESS I. I ALSO UNDERSTAND
THAT IT'S NOT SO EASY TO GO OUT
AND SHOP AROUND AND GET NEW
INSURANCE SO IT'S NOT A SIMPLE
THING TO DO NECESSARILY. BUT
AGAIN THE GOOD THING IS ALMOST
ONE IN FIVE OF OUR CUSTOMERS
HAVE MANAGED TO PLACE INSURANCE
OR LEAVE THE FAIR PLAN. SO
PRESUMABLY GET INSURANCE WITH
ANOTHER COMPANY AGAIN A VERY
SOLID STAT BUT ALSO IT SHOWS
ONCE AGAIN THE SYSTEMS WORKING
CUSTOMERS ARE COMING TO US WHEN
THEY NEED US. AND THEY LEAVE
WHEN THEY NO LONGER DO. SO
THAT'S A GOOD THING. YEAH I
WORKING OPPOSITE WORLD WE'RE
TRYING TO HELP COST LEAVE THE
FAIR PLAN. SO MOVING ON TO
SLIDE SEVEN. WHAT DO WE WRITE
WELL IN A NOT SHOW WE WRITE
WHAT THE NORMAL INSURANCE
MARKET WON'T. AND WHAT IS IT
THEY WON'T WRITE. FIRE. SO
THINK OF US AS BEING ME.
EARTHQUAKE WRITER OF YOU KNOW
INSTEAD OF EARTHQUAKE WE WRITE
FIRE THIS IS A PERIL THAT THE
INSURANCE INDUSTRY IN SOME
AREAS IS HESITANT TO WRITE
AGAIN THAT'S OUR ROLE WE WRITE
A BASIC PROPERTY. PER THE YOU
KNOW THE PURPOSES OF THE FAIR
PLAN A BASIC INSURANCE POLICY
RIGHT FIRE EXTENDED COVERAGE IN
VMM VMM IS VANDALISM MALICIOUS
MISCHIEF EXTENDED COVERAGE
WOULD INCLUDE THINGS LIKE WIND
AND SOME YOU KNOW SOME OTHER
MINOR COVERAGES BUT. OUR
PRIMARY PERIL WHAT WE WHAT WE
KNOW WHAT WE DO WHAT WE ADJUST
WHAT WE TAKE CARE OF CUSTOMERS
WITH DAY IN AND DAY OUT IS
FIRE. THAT'S OUR CORE PRODUCT.
WELL RIGHT THOSE BRUSH WILDFIRE
EXPOS POLICIES WERE RIGHT OLDER
HOMES THIS IS ONE OF THE
REASONS WHY WE HAVE A BIG URBAN
BOOK. WE HAVE A LOT OF POLICIES
ON THE BOOK A LOT OF PROPERTIES
ON THE BOOKS THAT ARE MORE THAN
EIGHTY YEARS OLD THAT'S NOT
NECESSARILY AN ATTRACTIVE
PROPERTY FOR A- YOU KNOW A
VOLUNTARY A NORMAL INSURANCE
MARKET. BUT AGAIN WILL WRITE IT.
I WILL ALSO WRITE. PROPERTIES
THAT HAVE BASICALLY NO FIRE
PROTECTION I DON'T HAVE A FIRE
DEPARTMENT WITHIN FIVE MILES OF
THEIR HOME. THERE'S NO FIRE
RESPONSE ABSOLUTELY WE WILL
WRITE THEM. AND WE'RE NOT WE
HAVE A LOT OF POLICIES WE WRITE
A LOT OF PROPERTIES AT STILL
HAVE NOT BEEN TO WIRING NOT AN
ATTRACTIVE ABSOLUTELY NOT
ATTRACTIVE RISK FOR A VOLUNTARY
WRITER. BUT AGAIN WE FILL THE
NEED. TO GIVE THOSE FOLKS
INSURANCE SO WE WILL WRITE KNOB
AND TUBE WIRING. SO MOVING ON
TO PAY DATE SO WHAT DOES THE
NORMAL INSURANCE MARKET RIGHT
WELL VIS A VIS THE POLICIES
THAT WE WRITE. OF THE NORMAL
INSURANCE MARKET WRITES A
DIFFERENCE IN CONDITION POLICY.
NOW WHAT THAT TYPICALLY LOOKS
LIKE IS A COMPANY WILL TAKE
THEIR HOMEOWNER'S POLICY AND
ADD AN ENDORSEMENT TO IT NOT
ENDORSEMENT SOMETIMES SAYS
SOMETHING LIKE THIS POLICY
COVERS EVERYTHING EXCEPT WHAT
THE FAIR PLAN RIGHT TO COULD BE
SOMETHING AS SIMPLE OF THAT IS
THAT I'VE SEEN LANGUAGE AS
SIMPLE AS THAT. I'VE SEEN
LANGUAGE THAT TALKS A LITTLE
BIT MORE ABOUT WE EXCLUDE FIRED
WEEKS WITH EXTENDED COVERAGE WE
EXCLUDE VANDALISM UNLESS AS MR
SUMMER MORE COMPREHENSIVE
SUMMER OTHERS BUT AT THE END OF
THE DAY THEY ALL MEAN THE SAME
THING. THEY'LL COVER.
EVERYTHING ELSE OF HOMEOWNERS
POLICY. COVERS EXCEPT FOR THE
FIRE BECAUSE THE FIRE PIECE.
THAT CAN BE PARTICULARLY HIGH
RISK IN CERTAIN AREAS AGAIN. I
KEEP STRESSING THIS POINT BUT
THAT'S WHAT WE'RE HERE FOR WE
RIGHT THE FIRE PIECE THIS IS
WHAT THE MARKET DOESN'T
NECESSARILY ONE RIGHT. NOW IT'S
A REALLY GOOD THING THAT WE
HAVE SO MANY COMPANIES WHO
RIGHT DIFFERENCE IN CONDITIONS
POLICIES BECAUSE ANYTIME YOU
HAVE THIS MUCH COMPETITION YOU
END UP WITH PRICE COMPETITION.
SO THESE COMPANIES ARE OUT
THERE. THEY DON'T WANT TO LOSE
THEIR MULTI LINE CUSTOMER THEY
DON'T WANNA LOSE THE CUSTOMER
WHO HAS THEIR THREE HOT THREE
AUTOS THEIR HOME THEIR UMBRELLA
POLICY THEIR LIFE POLICY THEY
DON'T WANT TO MISTER LOSE THAT
CUSTOMER. SO THOUGH RIGHT A
DIFFERENCE IN CONDITION POLICY
ALONGSIDE A FAIR PLAN POLICY
AND THEY CAN KEEP THAT CUSTOMER
AND WHAT'S SO IMPORTANT ABOUT
THAT. IS THAT CUSTOMER GETS TO
KEEP THEIR AUTO HOME DISCOUNT
WHICH IS IT IN MANY IN MOST
CASES IS A SIGNIFICANT DISCOUNT
FOR THOSE CUSTOMERS. WHAT KEEPS
THE RELATIONSHIP INTACT BECAUSE
THEY'RE STILL COVERING
EVERYTHING THAT THEY- ARE
WILLING TO COVER NAMELY NOT
FIRE. AND THE CUSTOMER
MAINTAINS THEIR MULTI LINE
DISCOUNT SO THIS IS A REALLY
GOOD THING AND THAT. I ACTUALLY
WORK VERY CLOSE IN FACT LAST
WEEK I WORK WITH A VERY LARGE
INSURANCE COMPANY THAT'S NOT ON
THIS PAGE. WORKING WITH THEM ON
GIVING THEM I DO THIS PRETTY
REGULARLY BY THE WAY. WORKING
WITH THEM AND GIVING THEM IDEAS
ON HOW TO STRUCTURE THEIR
POLICY THINGS TO CONSIDER
THINGS THINGS HELP WHAT THE
SIZE OF THE MARKET MIGHT BE
ETCETERA ETCETERA. SO I SPENT A
LOT OF TIME. ACTUALLY DRUMMING
UP BUSINESS FOR MY CUSTOMERS.
WITH THE NORMAL INSURANCE
MARKET AGAIN IT'S SORT OF
OPPOSITE WORLD. THERE'S NEVER
ANY HAVE EVER THERE'S NEVER ANY
AND I TRUST I ONLY SPEAK TO ONE
INSURANCE COMPANY IN A TIME OF
COURSE. BUT I GO OUT AND YOU
KNOW THAT'S WHY I KNOW CLIFTON.
I'VE REACHED OUT TO CLOSE IN
THE SAY HEY WHAT CAN THE
SURPLUS LINES MARKET DO FOR
FAIR FIND CUSTOMERS WHAT CAN
THE SURPLUS LINES MARKET DO
FOR. THIS NEED THAT'S BEEN
IDENTIFIED FOR THE FAIR PLAN
CUSTOMER THIS IS AFTER THE
FIRST TIME CLOSE TONIGHT AND I
HAVE MET IN PERSON BUT I HAVE
HAD. LOTS OF CORRESPONDENCE
WITH HIM I'VE CORRESPONDENCE
WITH MANY COMPANIES. TRYING TO
MAKE. AVAILABILITY MORE. MORE
AVAILABLE TO MAKE POLICIES MORE
AVAILABLE TO MY CUSTOMERS
BECAUSE AGAIN FOR ME A
SHRINKING BOOK OF BUSINESS. IS
A GOOD THING SO MUCH OF MY ROLE
IS TO LIKE I SAID HELP THE
NORMAL INSURANCE MARKET WHICH
AGAIN IS DEFINED AS ADMITTED
CARRIERS AND SURPLUS LINES
CARRIERS. TO CONSIDER PRODUCTS
EITHER SUPPLEMENT THE FAIR PLAN
POLICY OR ENCOURAGE THEM TO
SOMEHOW. TAKE SOME OF THE
POLICIES FROM US I DON'T
ACTUALLY GIVEN THAT POLICY
INFORMATION BUT I TRY TO
ENCOURAGE THEM. TO THINK
OUTSIDE THE BOX AND IT'S
SEVERAL OF THESE COMPANIES THAT
WRITE D. I. C.'S I'VE ACTUALLY
DEALT WITH SEVERAL OF THEM. MY
BELIEVE IN OTHER ONES GOING TO
BE COMING OUT WITH SOME ONE
FILING FOR ONE SOON SO I'M
HAPPY TO SAY THERE'S GOOD
COMPETITION IN THIS SPACE. SO I
KNOW THERE'S BEEN SOME
DISCUSSION ABOUT ASKING THE
FAIR PLAN TO WRITE A PACKAGE
HOMEOWNERS POLICY. AND THE
ANALOGY I WOULD DRAW IT BE LIKE
ASKING THE FLOOD INSURANCE.
PROGRAM TO WRITE THE PACKAGE
HOMEOWNERS POLICY WE SPECIALIZE
IN FIRE. THAT'S KIND OF OUR
WHEEL HOUSE THAT'S WHAT WE DO.
ASKING US TO WRITE ALL THESE
OTHER THINGS A THE WATER THE
PFAFF THE LIABILITY. BELIEVE IT
OR NOT THOSE ARE COMPLETELY
THAT'S A COMPLETELY DIFFERENT
UGH. LINE OF INSURANCE IF YOU
WELL WE DON'T HAVE THE
EXPERTISE WE DON'T HAVE THE
WE'RE NOT THE CLAIMS KNOWLEDGE
WE DON'T HAVE THE SYSTEMS WE
DON'T THERE'S- WOULD HAVE TO
KIND OF BUILD EVERYTHING FROM
THE GROUND UP. AND WHAT THAT
WOULD MEAN IS WELL OUR EXPENSES
WOULD GO UP OF COURSE AND SO.
RATHER THAN COMPETE WITH THE
VOLUNTARY MARKET WHICH IS
AGAIN. PER THE YOU KNW THE FOR
PURPOSES OF THE FAIR PLAN TO
MAXIMIZE THE USE OF THE
VOLUNTARY MARKET. SO I DO WANT
TO COMPETE WITH THEM. SO I SEE
MY ROLE IS BEING GETTING THE
VOLUNTARY MARKET TO WRITE MORE
OF THESE DE I SEE POLICIES AND
CREATE EVEN MORE COMPETITION.
BETWEEN THOSE COMPANIES.
RECENTLY I'VE ALSO BEEN ASKED
TO CONSIDER WRITING A
LIABILITY. LIABILITY COVERAGE
ON ON THE AFFAIR PLAN. OF
PLATFORM AGAIN LIABILITY IS
LIKE. HENCE THE DIFFERENCE
BETWEEN APPLES AND ORANGES IT'S
A IT IT SOUNDS LIKE IT'S ALL
HOMEOWNERS INSURANCE AGAIN I'D
BE LIKE ASKING THE FLOOD
INSURANCE PROGRAM RIGHT A
PACKAGE NUMBERS POLICY THEY
REALLY ARE APPLES AND ORANGES.
THE GOOD NEWS IS THOUGH I'VE
BEEN ABLE TO. IDENTIFY THREE IN
THE FOURTH WILL BE COMING THIS
WEEK. COMPANIES THAT WRITE A
STANDALONE C. P. L. POLICY THAT
HAVE THE EXPERTISE THAT HAVE
THE INFRASTRUCTURE. I PUT THE
INFORMATION ON OUR WEBSITE I'VE-
PUSH THE INFORMATION OUT TO OUR
BROKERS AND I ACTUALLY. SPENT A
LOT OF TIME MAKING SURE THAT
THE CORRESPONDENCE THAT GOES TO
OUR CUSTOMERS BOTH AT NEW
BUSINESS AND RENEWAL. YOU KNOW
SUGGESTS TO THEM THAT THEY
SHOULD CONSIDER A DIFFERENCE IN
CONDITIONS POLICY WE'RE ABOUT
TO UPDATE THAT AS WELL FOR
LIABILITY SO WE DO A LOT OF
DIRECT COMMUNICATION WITH OUR
CUSTOMERS. AND WE TRY TO MAKE
WE TRY TO EDUCATE OUR CUSTOMERS
AND WE TRY TO MAKE UP THE
DIFFERENCE IN CONDITION
POLICIES AND THE LIABILITY ONLY
POLICIES. KNOWN TO AND
AVAILABLE TO THE BROKERS WHO
PLACE BUSINESS WITH THAT SO
IT'S SOMETHING I CARE VERY
STRONGLY ABOUT AND IT'S
SOMETHING I WANT TO MAKE SURE
THAT. YOU KNOW WE'RE FILLING
THAT NEED. SO MOVING. IT'S NOT
ANOTHER THING WE RECENTLY DID.
WE WERE ASKED TO INCREASE OUR
DWELLING. LIMIT FROM ONE POINT
FIVE MILLION. TO THREE MILLION.
I'M HAPPY TO SAY THAT THE
GOVERNING COMMITTEE HAS
APPROVED THAT AND WE ARE
ACTUALLY NEED DEEP. IN DURING
AN ACTUARIAL ANALYSIS TO GET
OUR RATES TO GET RATE SET UP
FOR THAT TO. PROGRAMMERS
SYSTEMS WE'RE LOOKING TO FILE A
RATE FILING WITH THE DEPARTMENT
OF INSURANCE EARLY OCTOBER. AND
I KNOW THAT THEIR EAGER FOR
THIS AS WELL AND I. YOU KNOW I
WILL WORK CLOSELY WITH THEM
THEY'RE GREAT TO WORK WITH YOU
KNOW WE'LL JUST WE'LL GET THIS
THIS APPROVE WE NEED RIGHT TO
PROVE WE CAN'T JUST. YOU KNOW.
BUT RATES OUT THERE IN THAT YOU
KNOW NOT DO ANYTHING. WE'RE
HAVING TO UNDO MANY YEARS OF
PROGRAMMING THOUGH BECAUSE- WE
HAVE THAT ONE POINT FIVE
MILLION DOLLAR LIMIT IN PLACE
FOR SO LON THAT IT'S HARD
CODED INTO MANY PARTS OF OUR
SYSTEMS LIKE. TO MAKE SURE I GO
OVER MILLION FIVE AND SO WE
HAVE TO IDENTIFY. ALL THOSE
LOCATIONS WHICH HAVE BEEN IN
THERE FOR DECADES SO. WE'RE
WE'RE DOING A LOT OF YOU KNOW
SEARCHING AT THE MOMENT FOR OUR
SYSTEM. NOW WE'RE TARGETING AN
APRIL FIRST EFFECTIVE DATE
THAT'S PROBABLY TO SOME PEOPLE
SOUNDS LIKE A LONG WAY OUT
CANDIDLY I'D LIKE NOTHING
BETTER TO HAVE THEM TO HAVE
THAT AVAILABLE. YESTERDAY THE
TRUTH OF THE MATTER IS A FOUR
ONE EFFECTIVE DATE MEANS
EVERYTHING HAS TO BE LOCKED
DOWN. BY FEBRUARY FIRST BECAUSE
RENEWALS HAVE TO GO OUT. AND
THEN IF YOU WORK BACKWARDS FROM
THERE AND I'VE I PUT THIS GANTT
CHART IN HERE FOR YOUR
INFORMATION. THIS IS ACTUALLY A
VERY AGGRESSIVE TIMELINE BUT
WERE WERE PUSHING OURSELVES
BECAUSE WE RECOGNIZE THAT
THERE'S A MARKET NEED FOR THIS.
HOLD UP ABSOLUTELY WOULD NOT BE
THE DEPARTMENT OF INSURANCE IT
WOULD BE US BECAUSE I BELIEVE
THE DEPARTMENT OF INSURANCE
WOULD CERTAINLY TURN THIS
AROUND QUICKLY. SO WE ARE. YOU
KNOW PUSHING ON ALL ANGLES THIS
IS SOMETHING I PUSH ON MY I. T.
TEAM IN THE ACTUARIAL TEAM.
THAT'S DOING ANALYSIS FOR US
PROBABLY EVERY OTHER DAY. SO WE
ARE WE ARE. BARRELING FORWARD
ON THIS TO FILL THIS NEED. THAT
WE. WE SEE THAT THE- THE
CUSTOMERS HAVE AND WHILE I'M
DOING THAT TO I'M ACTUALLY
WORKING WITH ONE OF THE SURPLUS
LINES CARRIERS. WHO HAS BEEN.
WORKING TO SECURE CAPACITY WITH
LLOYDS OF LONDON AND THEY KEEP
ASSURING ME THEY'RE VERY CLOSE
AS SOON AS THAT ACCESS PRODUCT
IS AVAILABLE I WILL NOTIFY ALL
OF OUR BROKERS OF THAT SO THAT
THEY HAVE A RELIEF VALVE IN THE
INTERIM. SO AGAIN WE DO I TRY
TO BE VERY RESPONSIVE TO OUR
CUSTOMERS TO THE NEEDS OF THE
CUSTOMERS WHILE STILL. WORKING
WITHIN THOSE FOR PURPOSES THAT
WERE LAID OUT FOR THE FAIR PLAN
WHEN WE WERE CREATED. SO WELL
THAT WAS AN EXCELLENT SUMMARY
WITH VERY HELPFUL. DATA. TIME
LINES AS WELL THANK YOU SO MUCH
YOU'RE VERY WELCOME GIOVANE.
WHETHER ANY QUESTIONS SIR. FOR
THE PRESIDENT OF THE FAIR PLAN
AT THIS POINT THEY'LL GO AHEAD
MR VOEPEL. YES AND I'VE HAD THE
PLEASURE OF SPEAKING WITH YOU
AND HELPING OUT OTHER AGENTS
AND BROKERS SO. GREAT WORK
THANK YOU A COUPLE OF TECHNICAL
QUESTIONS. NOW THE ABILITY TO
ASSESS THE INSURERS THE FUNDS
ARE NEEDED NOW IS THAT A
ROUTINE ASSESSMENT THAT YOU DO
PERIODICALLY TO SET THE RATES
AND SET THE RISK FACTORS OR
WHAT OKAY GREAT QUESTION
ACTUALLY THE ANSWER IS NO IT'S
NOT SOMETHING IS DONE ROUTINELY
THE LAST TIME THE FAIR PLAN HAD
TO ASSESS THE MEMBER COMPANIES
WAS. AFTER THE NORTHRIDGE
EARTHQUAKE SO THERE WERE A
SUCCESSION OF CATASTROPHE AND
THEN WHEN THE MALIBU FIRES THE
ALTADENA PASADENA FIRES AND
THEN NORTHRIDGE EARTHQUAKE AND
THE ASSESSMENT TOLD I WANT TO
SAY THREE HUNDRED AND FIFTY
MILLION DOLLARS. SO YOU ONE
LAST THE ONE QUESTION. IF YOU
ASSESS ALL THE CARRIERS. THE
CARRIERS HAVE TO PASS THAT ON
SOME HOW THROUGH RATES CORRECT
SO I WOULD ASSUME THAT THE
INSURANCE COMMISSIONER HAS TO
APPROVE THE RATES YES SO THE
INSURANCE COMMISSIONER HAS TO
APPROVE ANY ASSESSMENT OKAY SO
I CAN ASSUME THAT THERE IS A
CHECK IN A BALANCE THERE WOULD
THAT BE A CORRECT ASSUMPTION
ABSOLUTELY IN FACTAN
ASSESSMENT WHAT WE TRY TO DO AT
THE FAIR PLAN IS WE'RE LOOKING
TO BUILD OUR CAPITAL SO WE
DON'T HAVE TO DO AN ASSESSMENT
SO RIGHT NOW. WE'RE LITTLE
SHORT ON CAPITAL WE HAVE THE
CAMPAñA LOYALTY FIRES AND YOU
MIGHT BE SURPRISED HERE WE
WEREN'T THAT AFFECTED BY THE
CAMPFIRE WE ARE LOSSES WERE
PREDOMINANTLY IN THE WALLS THE
FIRE AND I MENTIONED EARLIER
MALIBU Mà I'M KIND OF THE
ENSURE OF CHOICE IN MALIBU
RIGHT NOW SO WE HAD A HUGE LOSS
IN MALIBU NOT SO MUCH IN CAN'T
WE JUST WEREN'T WRITING THEIR.
SO THAT DEPLETED OUR CAPITAL IN
FACT NET OF RESERVES WE WERE IN
THE RED HOWEVER WE HAD ENOUGH
CASH ON HAND TO PAY CLAIMS AND
TO KEEP THE LIGHTS ON AND WE
ARE NOW IN THE PROCESS OF
BUILDING CAPITAL NOT OF
RESERVES. THANK YOU MISTER GOOD.
GOOD QUESTIONS ANY OTHER
QUESTIONS. FOR MISTER VON AND I
WANT TO HIGHLIGHT THAT TO
MISTER GALLAGHER REPRESENTS A
DISTRICT TO WHICH HAS BEEN HARD
HIT BY THE FIRES AND HE ASKED
IF HE COULD JOIN OUR COMMITTEE
TODAY SO HE'S HERE A. ON A ON A
CARE FOR THE INFORMATION
HEARING SO GO AHEAD SIR IF YOU
HAVE A QUESTION. YEAH THANK YOU
MISTER CHAIRMAN FOR LET ME JOIN
THIS MORNING OBVIOUSLY VERY
IMPORTANT ISSUE I THINK FOR ALL
OF US BUT CERTAINLY IN THE
AFTERMATH OF THE CAMPFIRE. IN
MY DISTRICT AND EVEN AREAS THAT
WEREN'T AFFECTED BY CAMPFIRE
WILL WISH WE ARE SEEN NON
RENEWALS AND WERE SEEN. NO
SPIKES IN PREMIUMS THAT OBVIOUS
HAVE A LOT OF PEOPLE ON EDGE.
WITH PARTICULAR REGARD TO THE
FAIR PLAN I THINK SOME OF THE
THINGS THAT I'VE BEEN HEARING.
YOUR NOT NECESSARILY NEGATIVE
ON THE FAIR PLAN ITSELF BUT
RATHER THAT WHEN THAT BECOMES A
SITUATION WHERE YOU HAVE NOBODY
ELSE. WILLING TO WRITE A POLICY
ANYA AND FAIR IS THE ONLY IS
THE MEAL INSURER OF LAST RESORT
WHICH IS AS YOU SAID IS YOUR
PURPOSE. PEOPLE GET THE INCH
THAT PLAN BUT THEN THEY
ABSOLUTELY NEED TO GET
ADDITIONAL INSURANCE AND SO
THEY GO OUT FOR A D. I. C. OR
SUPPLEMENTAL AND FROM WHAT I'M
HEARING THAT IS REALLY WHAT. IS
THE HUGE EXPENSE FOR PEOPLE.
VERY IN DIFFERENT DEGREES BUT
I'M HERE MORE LIKE MAYBE ABOUT
TWENTY FIVE HUNDRED FOR THE
FAIR PLAN YOU KNOW BASIC PLAN
BUT THEN. WHAT COULD GET THEM
UP TO A TOTAL MAYBE NINE
THOUSAND TEN THOUSAND DOLLARS
IS THE D. IC PLAN. AND SO I
THINK THAT'S WHERE YOU'RE
GETTING SOME OF THIS. THE PUSH
BACK AND PEOPLE ARE SAME WAY
WILL MAYBE. COULD FAIR PLAN
ACTUALLY MAYBE. THROUGH A BY UP
NOT JUST. FOR THE SAME PRICE
BUT MAY FOR BUYING UP ON THE
EXISTING BASIC PLAN.
INCORPORATE IN SOME OF THESE
OTHER METRICS AND WE'RE GOING
TO HEAR FROM SOME. OTHER
WITNESSES LATER THIS MORNING ON
THAT IDEA BUT I MEAN I HEARD
YOU TALK A LITTLE BIT ABOUT
THAT HEY THAT'S NOT REALLY WHAT
WERE. GEARED UP TO DO. BUT IT
JUST SOUNDS LIKE THAT OUT THERE
IN THE MARKET. IS NOT MAYBE
THERE ARE THERE ARE PLANS BUT
ARE THEY AFFORDABLE. YOU KNOW
WITHIN REASONABLE REACH OF
PEOPLE YOU KNOW LIVING IN SOME
OF THESE AREAS SURE AND THAT'S
AN AND- AFFORDABILITY IS A VERY
REAL CONCERN I'M SORRY TO HEAR
THAT DIFFERENCE IN CONDITIONS
POLICIES ARE ABOUT MUCH. WHAT I
WOULD SAY IS THERE IS A PRETTY
HEALTHY MARKET FOR DISTANT
DIFFERENCE IN CONDITIONS POLICY
YOU KNOW I PUT ON. ON THE SLIDE
OF THE COMPANIES THAT ARE
LISTED ON THE DEPARTMENT OF
INSURANCE WEBSITE OF COMPANIES
THAT CURRENTLY RIGHT A
DIFFERENCE IN CONDITIONS
POLICY. THE GOOD THING ABOUT
COMPETITION IS. YOU CAN USUALLY
SHOP AROUND AND GET A BETTER
PRICE AND I WOULD ENCOURAGE
ANYBODY SEEN PRICES LIKE THAT.
TO SHOPAROUND BECAUSE IT'S NOT
THE FIRE PIECE THAT WHAT I'M
HEARING FROM IF I UNDERSTOOD
CORRECTLYIT'S NOT NECESSARILY
THE FAIR PLAN OF THE FIRE PIECE
THAT'S THAT'S DRIVING UP THE
TOTAL COSTS BUT IT'S THE
DIFFERENCE IN CONDITION. COST
AND AGAIN I WOULD ENCOURAGE
THOSE CUSTOMERS TO SHOP AROUND.
FOR THE FAIR PLAN TO OFFER
SOMETHING LIKE THAT I CAN'T SAY
THAT WOULD BE ANY LESS AGAIN
KEEPING IN MIND. WHO WE ARE WE
TAKE LIKE THE HIGHEST RISK
POLICIES AND IN THEORY WE'D
PROBABLY BE MORE EXPENSIVE. AND
SO. NOT TO MENTION WE'D WE
WOULD ENCOURAGE SIGNIFICAN
EXPENSES JUST TO GET TO THAT
POINT AND THEN WE HAVE TO HIRE
PEOPLE WE DON'T EVEN KNOW HOW
TO HANDLE A WATER CLAIM I MEAN.
ALL ALL JOKING ASIDE. WE DON'T
HANDLE WATER CLAIMS WE DON'T
HANDLE THE CLAIMS WE DON'T
HANDLE LIABILITY CLAIMS AND SO
WE'RE COMPLETELY LACKING ANY OF
THAT INFORMATION WHERE IS THE
VOLUNTARY MARKET. THAT'S THE
BEAUTY OF COMPETITION THEIR
NUMBER COMPANIES OUT THERE BOTH
SURPLUS LINES MANY SURPLUS
LINES COMPANIES IN FACT I'VE
BEEN WORKING WITH THE SURPLUS
LINES MARKET. OF THE PRICES ARE
ALL ACROSS THE BOARD SO THE
REALLY WHAT I WOULD ENCOURAGE
YOUR CUSTARD YOUR YOUR
CONSTITUENTS TO DO A SHOP
AROUND. BECAUSE THOSE ARE
REALLY HIGH PRICES AND I FIND
THAT. SURPRISING AND I BUT
THERE'S SOMETHING BETTER FOR
THEM OUT THERE. MAYBE JUST AS A
QUICK FOLLOW UP. MISTER
CHAIRMAN IS. AND WE WILL HEAR
FROM A GUY WHO THAT'S ALL HE
DOES IS SHOPPERS AND SO HILL
MAYBE YOU CAN GIVE US SOME MORE
INFORMATION ON THAT BUT WOULD
WHAT WOULD YOU PROPOSE I MEAN
YOU YOU YOU OBVIOUSLY KNOW THIS
VERY WELL BUT I MEAN IS THERE A
REFORM OUT THERE. THAT MIGHT
HELP THIS KIND OF SLIVER OF
CUSTOMERS THAT WERE AT THAT I
THINK WE'RE TALKING ABOUT
WHETHER IT WHETHER RUNNING INTO
THIS PROBLEM IS THERE REFORM
OUT THERE MAY BE SOMETHING THAT
CAN BE DONE EVEN TO THE
DEPARTMENT OR LEGISLATION OR
OTHERWISE. THAT MIGHT HELP THAT
SITUATION. I THINK THAT TO I'D
I DON'T KNOW IF THERE'S
NECESSARILY REFORM BUT I'M
PLANNING TO CONTINUE MY
DRUMBEAT WITH THE VOLUNTARY
MARKET TO ASK MORE AND MORE
COMPANIES TO WRITE DIFFERENCE
IN CONDITIONS POLICIES I
MENTION I HAD A MEETING LAST
WEEK WITH A REALLY LARGE
INSURANCE COMPANY. AND THE YOU
KNOW I. PUSHED ON THEM THEY
CAME BACK THEIR ENQUIRING I
THINK THE MORE COMPANIES WE CAN
GET TO WRITE THE DIFFERENCE IN
CONDITION THE MORE COMPETITION
THERE IS AND OF COURSE AS I
MENTIONED BEFORE YOU KNOW I
WORK VERY CLOSELY WITH THE
SURPLUS LINES MARKET. AND
PERHAPS QUESTION I CAN HAVE A
AN OFFSET CONVERSATION AND DO
EVEN MORE IN THAT IN THAT
REGARD I THINK COMPETITION IS
REALLY THE BEST THING FOR THESE
CUSTOMERS. AND. I AGAIN I'M-
THOSE ARE THOSE ARE BIG NUMBERS
AND THE BIGGEST PART OF THE
PREMIUM REALLY IN THEORY SHOULD
BE ON THE FIRE SO. WHAT I WOULD
SAY THAT IS YOU KNOW SOMEBODY'S
MAKING A LOT OF MONEY ON THOSE
POLICIES AYE BUT THERE'S
ANOTHER COMPANY MAKING LASSEN
PROBABLY CHARGING LAST SO.
AGAIN I WOULD SAY COMPETITION
IS PROBABLY THE BEST SOLUTION
TO THIS. THANK YOU SO MUCH FOR
YOUR- RESPONSES. AND HELPFUL
INFORMATION LET'S GO AHEAD AND
HEAR FROM MR CLOSED IN BROWN.
SURPLUS LINES ASSOCIATION OF
CALIFORNIA GO AHEAD SIR. THANK
YOU CHAIRMAN DAILY MY NAME IS
CLIFTON BROWN AND I AM THE VICE
PRESIDENT OF COMMUNICATIONS AND
GOVERNMENT RELATIONS FOR THE
SURPLUS LINES ASSOCIATION OF
CALIFORNIA. I'D LIKE TO THANK
YOU CHAIRMAN DAILY VICE CHAIR
MAYES AND THE MEMBERS OF THIS
COMMITTEE FOR THIS OPPORTUNITY
TO BRIEF YOU TODAY REGARDING
THE STATE OF THE HOMEOWNERS
INSURANCE MARKET AND THE
SURPLUS LINE INDUSTRY'S ROLE IN
THAT MARKET. FIRST I WOULD LIKE
TO PROVIDE SOME VERY BRIEF
BACKGROUND ON WHO WE ARE AND
WHAT WE DO. THE SURPLUS LINES
ASSOCIATION WAS CREATED IN
NINETEEN THIRTY SEVEN AND IT
WAS APPOINTED IN NINETEEN
NINETY FOUR IS THE CALIFORNIA
DEPARTMENT OF INSURANCE IS
SURPLUS LINE ADVISORY
ORGANIZATION. IN THIS ROLE WE
REVIEW EVERY SURPLUS LINE
POLICY FILE IN THE STATE OF
CALIFORNIA TO ENSURE COMPLIANCE
WITH ALL PERTINENT LAWS AND
REGULATIONS. OUR FIFTY FIVE
HUNDRED LICENSED BROKERS PLACE
MORE THAN SIX HUNDRED AND
EIGHTY THOUSAND POLICIES WITH A
TOTAL PREMIUM OF SEVEN POINT
SIX BILLION DOLLARS IN TWO
THOUSAND EIGHTEEN. HOMEOWNERS
IS A VERY VERY SMALL PERCENTAGE
OF THIS MARKET. BEFORE I GO ANY
FURTHER IT'S IMPORTANT TO NOTE
UP FRONT BUT STATE LAW REQUIRES
OUR MEMBERS TO PERFORM A
DILIGENT SEARCH FOR AN ADMITTED
CARRIER THAT WILL COVER A RISK
BEFORE PLACING THAT POLICY IN
THE SURPLUS LINES MARKET. THE
CODE CONSIDERS THREE
DECLINATIONS FROM ADMITTED
CARRIERS TO BE PRIMA FACIA
EVIDENCE BUT A DILIGENT SEARCH
HAS TAKEN PLACE. IN SOME
INSTANCES ADMITTED INSURERS
WILL MAKE A BUSINESS DECISION
NOT TO COVER A PARTICULAR RISK
OR CLASS OF RISKS THESE ARE
USUALLY IN CASE OF DISTRESSED
NEW COMPLEX OR HIGH CAPACITY
RISKS. IN THE HOMEOWNERS MARKET.
THERE ARE MANY REASONS WHY AN
ADMITTED CARRIER MAY REDUCES
INSURED CONCENTRATION FOR
INSTANCE IT MIGHT FIND THAT IT
IS TOO CONCENTRATED IN A
PARTICULAR AREA OR THE RISK
PROFILE MIGHT HAVE CHANGED DUE
TO FORCES BEYOND ITS CONTROL
SUCH AS CLIMATE CHANGE. IN
THESE CASES CONSUMERS NEED
OPTIONS OR THEY WILL BE LEFT
WITHOUT THE INSURANCE COVERAGE
THEY NEED. THEY CAN PROCURE
THAT COVERAGE EITHER THROUGH
THE FAIR PLAN FOR THE SURPLUS
LINES MARKET OR SOME
COMBINATION THEREOF. THE
OVERWHELMING MAJORITY OF RISKS
THAT GO INTO SURPLUS LINES ARE
COMMERCIAL. VERY LITTLE
PERSONAL LINES BUSINESS GOES
INTO THE SURPLUS LINES MARKET.
IN THE. BETWEEN ONE POINT 4%
AND ONE POINT 8% OF ALL SURPLUS
LINES PREMIUMS COLLECTED IN
CALIFORNIA. HOWEVER WE HAVE
SEEN INCREASES IN RECENT YEARS
IN THE TOTAL PREMIUM AND NUMBER
OF POLICIES AND THE SURPLUS
LINES HOMEOWNERS MARKET AS
ADMITTED CARRIERS HAVE PULLED
BACK IN CERTAIN FIRE PRONE
AREAS. HOWEVER. EVEN WITH THESE
INCREASES HOMEOWNERS INSURANCE
STILL ACCOUNT FOR LESS THAN TWO
POINT 5% OF THE ENTIRE SURPLUS
LINES MARKET PLACE IN THE STATE
AND BASED ON THE MOST RECENT
FIGURES AVAILABLE ON THE
CALIFORNIA DEPARTMENT OF
INSURANCE IS WEBSITE ONLY ABOUT
ONE POINT 7% OF THE ENTIRE
HOMEOWNERS INSURANCE PREMIUM IN
THE STATE WENT INTO SURPLUS
LINES IN TWO THOUSAND SEVENTEEN
ALTHOUGH IT IS PROBABLE BASED
ON THE GROWTH WE HAVE SEEN THAT
THIS PERCENTAGE HAS SURPASSED
2% IN THE LAST NINETEEN MONTHS.
ALTHOUGH WE DO NOT HAVE DATA ON
THE VALUE OF HOMES INSURED IN
THE SURPLUS LINES MARKET PLACE.
IT IS OUR SENSE THAT MOST OF
THESE HOMES ARE HIGH END HOMES
WITH OWNERS WHO NEED MORE
COVERAGE THAN THE FAIR PLAN CAN
PROVIDE. IN THESE CASES THE
SURPLUS LINE INDUSTRY IS
FILLING A ROLE THAT IS NO
LONGER BEING SERVED BY THE
ADMITTED MARKET WHICH IS
EXACTLY THE ROLE OF THE STATE
OF CALIFORNIA ENVISIONS FOR OUR
INDUSTRY. OUR PURPOSE IS NOT TO
SUPPLANT THE ADMITTED MARKET.
RATHER WE ARE HERE TO PROVIDE
OPTIONS TO CONSUMERS WHO MIGHT
OTHERWISE NOT BE ABLE TO OBTAIN
THE LEVEL OF INSURANCE THEY
WANT. DURING A MARKET
SEEING NOW. IN CLOSING THE
SURPLUS LINES INTO THREE PLAYS
A VITAL ROLE IN ENSURING THAT
THE CALIFORNIA CONSUMERS WHO
CANNOT OBTAIN INSURANCE
COVERAGE. IN THE ADMITTED
MARKET HAVE OPTIONS TO INSURE
PROPERTY AGAINST POTENTIAL
LOSSES. OUR MISSION IS TO
ENSURE A RESPONSIVE AND LAWFUL
SURPLUS LINE MARKET EXISTS IN
THE STATE OF CALIFORNIA. AT
THIS TIME I'D BE GLAD TO TAKE
pTHANK YOU FOR THE OPPORTUNITY
TO SPEAK HERE TODAY. THANK YOU
MISTER BROWN OTHER QUESTIONS
FOR MISTER BROWN ABOUT SURPLUS
LINES AND THE ROLE THEY PLAY.
OKAY. EVEN ARE A OUR EVEN OUR
RESIDENT INSURANCE AGENT TO. IS
SATISFIED WITH THE DETAILS HERE
ANY OTHER QUOTE ANY OTHER
COMMENTS OR QUESTIONS THANK YOU
VERY MUCH THANK YOU TO BOTH OF
YOU IF I COULD PLEASE I WAS
ASKED TO SPEAK ON A PARTICULAR
SUBJECT THAT I MANAGE TO
COMPLETELY GO PAST AND IT'S
SOMETHING I BELIEVE IS
IMPORTANT TO YOU AS WELL THE
RIGHT OUT CREDITS FOR MEMBER
COMPANIES SURE PLEASE I WOULD
EXCUSE IF THAT I MENTIONED
EARLIER IN MY PRESENTATION THAT
IF WE NEED MONEY WHERE UNLIKE
UNLIKE REGULAR INSURANCE
COMPANIES OR BACK BY SEGA WE'RE
BACK BY THE MARKET. AND I CAN
ASSURE YOU THAT RIGHT NOW
COMPANIES OUT THERE ARE VERY
VERY CLOSELY WATCHING WHAT'S
GOING ON WITH THE FAIR PLAN
BECAUSE WE DON'T HAVE WE GOT
THIRTY TWO MILLION I BELIEVE IN
CAPITAL WHICH IS NOT A WHOLE
LOT OF MONEY. LET ME BE REALLY
CLEAR SO WE ARE. AT RISK OF
DOING AN ASSESSMENT SO WHAT
DOES THAT MEAN FOR THE MEMBER
COMPANIES. THAT MEANS. THEY
CARE A LOT ABOUT THEIR
ASSESSMENT POTENTIAL. RIGHT
THEY DON'T WANT THE FAIR PLAN
TO GO OUT THERE AND SAY. HEY
COUGH UP. FOUR HUNDRED MILLION
DOLLARS IN THE WAY THAT STOOD
UP AS IT'S DONE BY MARKET
SHARE. SO IF A COMPANY RIGHTS
10% OF THE PREMIUMS IN THE
STATE. FOR HOMEOWNERS. THAT
MEANS THEY HAVE TO COUGH UP 10%
OF WHATEVER THE ASSESSMENT
AMOUNT IT IS. SO WHY ARE THE
RIGHT OUT CREDIT SO IMPORTANT
WELL TODAY. THE RIGHT UP
CREDITS ARE LIMITED TO A VERY
VERY SMALL AREA MOSTLY IN LA
COUNTY. THE CURRENT DEFINITION
IN THE INSURANCE CODE IS THE I
SO BRUSH WILDFIRE AREAS WHICH
IS AGAIN I CAN'T STRESS ENOUGH
TINY LITTLE AREAS. AND THAT
HASN'T CHANGED IN DECADES THE
DEFINITION OF THAT HAS NOT
CHANGED IN DECADES. I BELIEVE
CHAIRMAN DALY HAS HAS SOME
LANGUAGE TO. INCREASE THAT. SO
THAT COMPANIES WILL HAVE THE
INCENTIVE. TO RIDE IN AREAS
THAT ARE HIGH OR VERY HIGH.
BRUSH WILDFIRE EXPOS PER
CALIFORNIA NOW WHY IS THAT
IMPORTANT BECAUSE IT'S A ONE
FOR ONE OFFSET IF A COMPANY
RIGHTS A DOLLAR PREMIUM IN AN
AREA THAT'S CONSIDERED A RIGHT
OUT CREDIT AREA. THAT REDUCES
THEIR MARKET SHARE BY THE SAME
DOLLAR. SO WHAT IS THIS
ACCOMPLISH WELL WHAT IT DOES IS
IT PUTS A CHECK IN THE POSITIVE
COLUMN FOR A COMPANY TO WRITE.
A POLICY IN AN AREA THAT'S
CONSIDERED HIGH IN VERY HIGH
BECAUSE THEY GET THE OFFSET. ON
THE BACKEND FOR POTENTIAL
ASSESSMENT. SO IF A COMPANY
LET'S SAY THEY HAVE A 10%
MARKET SHARE IN THE STATE TODAY
THEY WRITE 10% OF THE PREMIUMS
AND HOMEOWNERS TODAY. IF THEY
END UP WRITING A FULL 1% OF THE
PREMIUMS IN THESE AREAS THEY
CAN REDUCE THEIR POTENTIAL
EXPOSURE BY A FULL PERCENT AND
THAT WE'RE TALKING ABOUT BIG
MONEY SO. THE REASON I'M
SUPPORTING THE LANGUAGE THAT
TERM DALY HOUSES BECAUSE- IT
PROVIDES INCENTIVE. TO THE
VOLUNTARY MARKET TO WRITE
POLICIES IN THOSE AREAS AGAIN
BECAUSE THEY WANT THAT OFFSET.
THIS IS SOMETHING THAT SON
TODAY. AGAIN ALL WE'RE LOOKING
TO DO ARE ALL ALL I'M
SUPPORTING IS AN IS AN
EXPANSION OF THE AREAS FOR
WHICH COMPANIES CAN GET
CREDITS. BECAUSE BEING ON THE
RECEIVING END OF A YOU KNOW
DOING THE MATH ON A ON AN
ANNUAL BASIS COMPANIES CARE A
LOT ABOUT THIS. AND THEY WILL
CARE EVEN MORE IF THEY HAVE
MORE OPPORTUNITY TO GET RIGHT
OUT CREDIT SO I WANTED TO JUST
I MANAGE TO COMPLETELY SKIP
THAT BUT I JUST WANTED TO
SUPPORT. OF THE LANGUAGE THAT
CHAIRMAN DALY HAS GOING THIS
AFTERNOON BECAUSE I BELIEVE.
AGAIN IT'LL PUT A CHECK IN THE
POSITIVE COLUMN FOR INSURANCE
COMPANIES TO WANT TO WRITE IN
THESE AREAS GOOD. THANK YOU FOR
HIGHLIGHTING THAT I APPRECIATE
IT VERY MUCH ABSOLUTELY ANY
OTHER QUESTIONS FOR THIS PANEL
WE HAVE THREE. THREE MORE PANEL
SIR TO HEAR FROM SO WITH THAT
THANK YOU AGAIN FOR YOUR- FOR
YOUR TIME. AND VERY HELPFUL
INFORMATION THIS MORNING THANK
YOU THANK YOU. THE NEXT PANEL
IS SO A PANEL OF ONE. MR JOLE
OUT YOUR SPECIAL CONSULTANT TO
THE DEPARTMENT OF INSURANCE. SH
SURE I THINK WE CAN DO THAT
RIGHT NOW WELL MISTER LECTURES
FINDING HIS SEAT. WILL ADD ON
TO THAT BILL. AB TWO NINETY
FIVE MAYES HI MAYES AYE BERMAN
BERMAN I TO. FRAZIER GIPSON.
MARGARITA HI KAMLAGER-DOVE HI.
ELEVEN TWO ZERO THANKS MISTER
BERMAN FOR OF THE REMINDER
APPRECIATED THANK YOU. SO GO
AHEAD SIR FROM THE CALIFORNIA
DEPARTMENT OF INSURANCE. THANK
YOU ON BEHALF OF MISTER RICARDO
LARA AND THE DEPARTMENT OF
INSURANCE SITE THANK YOU FOR
INVITING US HERE TO SPEAK TODAY
ON MY NAME'S JOEL LAUTERER I AM
A SENIOR ADVISER AT THE
DEPARTMENT. I WAS ASKED BY THE
COMMITTEE TO PROVIDE AN UPDATE.
ON THE DEPARTMENTS RECENT
RELEASE OF DATA. THAT THAT
SHOWS THE IMPACT OF WILDFIRES
ON INSURANCE NON RENEWALS AND
AVAILABILITY IN THE STATE AS
WELL AS COMMENT ON CURRENT
MARKET CONDITIONS. NEW DATA
COLLECTED BY THE DEPARTMENT
FROM INSURERS AND RELEASED JUST
YESTERDAY SHOWS INSURANCE IS
BECOMING HARDER TO FIND TO FIND
FOR THOSE IN HIGH A WILDFIRE
RISK AREAS. PRESUMABLY BASED ON
UNDERWRITING DECISIONS MADE IN
CONSIDERATION OF RECENT
WILDFIRES. THE DATA REVEALS
THERE WAS A 6% INCREASE IN IN
SURE INITIATED HOMEOWNER POLICY
NON RENEWALS. IN THE CAL FIRE
STATE RESPONSIBILITY AREAS FROM
TWO THOUSAND SEVENTEEN TO TWO
THOUSAND EIGHTEEN. WELL ZIP
CODES AFFECTED BY THE
DEVASTATING FIRES FROM TWO
THOUSAND FIFTEEN SET TWO
THOUSAND SEVENTEEN EXPERIENCED
A 10% INCREASE IN IN SURE
INITIATED NON RENEWALS. THIS
STATE ALSO REVEALED THE
AVAILABILITY OF HOMEOWNERS
INSURANCE DROPPED IN HIGH RISK
COUNTIES. AND THOSE ARE ALL
OVER THE STATE TO WOLLEMI
TRINITY NEVADA AND MARIPOSA WHO
MUST ALPINE CALAVERAS SIERRA
AMADOR AN ELDORADO COUNTIES.
FROM. TWO THOUSAND FIFTEEN TO
TWO THOUSAND EIGHTEEN THE
NUMBER OF NEW AND RENEWED
POLICIES HOMEOWNERS POLICIES
FELL BY EIGHTY SEVEN HUNDRED IN
THE TEN COUNTIES WITH THE MOST
HOMES IN VERY HIGHER VERY HIGH.
FIRE RISK AREAS SO THE NUMBERS
OF NOT HAVE NON RENEWALS AND
ARE OF NEW AND NEW BUSINESS
GOING DOWN DESPITE DEVELOPMENT
IN THOSE COUNTIES. AT A TIME
WHEN THE OVERALL FAIR PLAN
POLICY NUMBERS HAVE BEEN
DECREASING FAIR PLAN NUMBERS IN
THE STATE RESPONSIBILITY AREAS
HAVE INCREASED ANALYSTS POINTED
THAT OUT. FROM ABOUT THIRTY
NINE THOUSAND AND TWO THOUSAND
FIFTEEN AND FOR TWO FORTY NINE
THOUSAND IN TWO THOUSAND
EIGHTEEN. THE 25% INCREASE.
THESE NEW POLICIES AGAIN ARE
ALSO COMING FROM ACROSS THE
STATE. AMADOR BUTTE CALAVERAS
EL DORADO KERN AND LAKE LASSEN
MADERA MARIPOSA MEN TO SEE NO
NO NO MONTEREY NEVADA ORANGE
PLASTER PLUMAS RIVERSIDE SAN
BERNARDINO SAN DIEGO SAN LUIS
OBISPO SANTA CRUZ SHASTA
SISKIYOU CINEMA STANISLAUS
TRINITY TULARE WOLLEMI IN TORA
ALL SAW SIGNIFICANT NUMBERS OF
NEW POLICIES IN THE FAIR PLAN.
EARLIER THIS YEAR COMMISSIONER
LARA APPROACH THE FAIR PLAN
ASKING THEM TO CONSIDER
INCREASING THEIR COVERAGE
LIMITS FROM ONE POINT FIVE
MILLION TO THREE MILLION. YOU
HEARD ABOUT THAT FROM THIS JOHN
AS WELL. THEY VOTED FOR THAT
THREE MILLION DOLLAR INCREASE.
WE WOULD WISH THAT THAT LIMIT
WOULD BECOME AVAILABLE SOONER
AND I UNDERSTAND THE- THAT SHE
PRESENTED REASONS WHY IT CAN'T.
BUT WE'RE STILL HOPEFUL THAT WE
CAN MOVE UP THAT APRIL DATE.
SHE ALSO DISCUSS AN ISSUE THAT
THE CONCERN LARA HAS ALSO
DRESSED WITH THE FAIR PLAN
COMMISSIONER LARA REQUESTED
THAT THE FAIR PLAN ADD. A
LIABILITY WORKERS COMPENSATION
COVERAGE OR OFFER AN HOMEOWNERS
AGE OF THREE POLICY DIRECTLY. A
BETTER COVERAGE PACKAGE IS LONG
OVERDUE FOR URBAN POLICY
HOLDERS WHO STILL COMPRISE THE
MAJORITY OF FAIR PLAN BUSINESS.
AND IT IS CRITICAL AS MORE
CALIFORNIANS FROM RURAL
COUNTIES ARE HAVING TO TURN TO
THE FAIR PLAN FOR COVERAGE. I
UNDERSTAND THE REASONS THAT
WERE PROVIDED BY WHY THAT MIGHT
NOT BE A GREAT IDEA FOR THE
FAIR PLAN. BUT I WANT TO MAKE
IT CLEAR THAT PURCHASING
SEPARATE POLICIES. EACH ONE
WILL HAVE A SEPARATE EXPENSE
LOAD A SEPARATE COMMISSION. AND
ALL OF THAT COMBINED WITH WITH
WHAT IS A VERY EXPENSIVE FIRE
POLICY. MAKES IT A VERY
EXPENSIVE PROPOSITION TO PUT
TOGETHER A FULL COVERAGE
PACKAGE FOR THE AVERAGE
INDIVIDUAL EITHER IN THE FAIR
PLANS URBAN BOOK WHICH IS
LARGELY AS MENTIONED IN. EAST
LA. FOR RICHMOND OAKLAND OR FOR
THE PEOPLE IN THE RURAL AREAS
THAT ARE HAVING YOU KNOW THIS
ISSUE MOVING THE FAIR PLAN. SO
IT WOULD BE SO EXPENSIVE TO PUT
TOGETHER TO IN THREE POLICIES
TO ACCOMPLISH. WHAT AN AGE OF
THREE PROVIDES. DATA SHOWS
THERE'S ALSO BEEN A 49%
INCREASE IN SURPLUS LINES
POLICIES IN THE STATE
RESPONSIBILITY AREAS BETWEEN
TWO THOUSAND FIFTEEN AND TWO
THOUSAND EIGHTEEN. IN THOSE
FOUR YEARS SURPLUS LINES
WRITINGS HAVE INCREASED FROM
FIVE BY ABOUT FIVE THOUSAND
POLICIES FOR THOSE IN A STATE
RESPONSIBILITY. THAT'S A 50%
INCREASE IN SURPLUS LINES
WRITINGS IN THAT AREA. THE
GROWTH IN THESE ALTERNATIVE
MARKETS THE FAIR PLAN AND STE
AND THE SURPLUS LINES REFLECTS
THE TREND IN THE VOLUNTARY
MARKET WERE NON RENEWALS IN
AREAS OF HIGH FIRE RISK ARE ON
THE INCREASE. AND I WANT TO
STRESS THAT THIS NEW DATA THE
DATA THE DEPARTMENT PUT OUT
DOES NOT MEASURE THE FULL
IMPACT OF NON RENEWALS FROM THE.
HOMEOWNERS POLICIES LINKED TO
THE TWO THOUSAND EIGHTEEN
WILDFIRES WHICH ACTUALLY HAS A
INSURERS RETRENCHING FURTHER IS
WHAT WE BELIEVE AS FIRES OF THE
CAMP CAR BALLSY HILL FIRES.
SINCE CALIFORNIA LAW REQUIRES
INSURERS GIVE A FORTY FIVE DAY
NOTICE BEFORE A NON RENEWABLE
AND THESE WILDFIRES OCCURRED
NEAR THE END OF THE YEAR THE
FULL EFFECTS OF THOSE FIRES ON
UNDERWRITING DECISIONS.
PROBABLY AREN'T IN THE DATE.
THIS EXPECTATION IS CONSISTENT
WITH CONVERSATIONS THAT
COMMISSIONER LARA HAS HAD WITH
HOMEOWNERS LOCAL GOVERNMENT
LEADERS AND CONSUMER GROUPS
ACROSS THE STATE. THE PROBLEM
OF INSURANCE. NON RENEWAL IS
GENERALLY EXPECTED TO GET WORSE
IN TWO THOUSAND NINETEEN AND
BEYOND AS INSURERS UNDERWRITING
DECISIONS MADE AFTER TO THE TWO
THOUSAND EIGHTEEN FIRES TAKE
FULL EFFECT. IN FACT A FEW
INSURERS ALREADY HAVE INFORMED
THE DEPARTMENT THAT THEY PLAN
TO NON RENEW THOUSANDS OF
HOMEOWNERS POLICIES ACROSS THE
STATE IN GEOGRAPHICAL AREAS
BOTH RURAL AND URBAN TO WHAT
FIRE RISK SAID THERE ARE MORE
NON RENEWALS AHEAD. NOW WE
UNDERSTAND THAT IN THE STATE
WITH OVER EIGHT MILLION
INSERTED RESIDENCES THESE
NUMBERS MAY SEEM EVENTS AND
SIGNIFICANT. BUT AGAIN I HOPE
EVERYBODY RECOGNIZES TO THE
INDIVIDUALS AND COMMUNITIES
WHERE THE NON RENEWALS ARE
TAKING PLACE. IT CREATES BOTH
PERSONAL AND REGIONAL CRISES
AND THE IMPLICATIONS FOR
PROPERTY VALUES AND THOSE
COMMUNITIES CAN BE TROUBLING.
AND JUST SO IT'S JUST NOT MY
WORDS THE DEPARTMENT
COMMISSIONER LARA'S HOLDING AT
TOWN HALL IN NEVADA COUNTY
TOMORROW EVENING. AND WE'VE
ALREADY RECEIVED OF MANY
INCREASED AND QUESTIONS AND
COMPLAINTS FROM CONSUMERS IN
THOSE AREAS I'M JUST GOING TO
READ A COUPLE OF THEM TO GIVE
YOU A FLAVOR OF WHAT WE EXPECT
TO HEAR. DOES FROM AN
INDIVIDUAL ELLISON NEVADA
COUNTY HAVE RECEIVED A NON
RENEWAL FOR THE SECOND YEAR IN
A ROW. NOW I AM UNABLE TO GET
INSURANCE FROM ANY KERRIER. IF
CALIFORNIA DOESN'T DO SOMETHING
ABOUT THIS PROPERTY VALUES WILL
DROP TAXES WILL GO DOWN AND
LOCAL AGENCIES THAT ARE
DEPENDENT UPON THE PROPERTY
TAXES WILL BE IN TROUBLE. IF
YOU ARE A NEIGHBOR OF. EMPIRE
MINE STATE PARK AND THEY ARE
NOT REDUCING FUEL LOADS ON YOUR
SHARED BOUNDARY WHAT CAN A
HOMEOWNER DO. THE WE WORK OUR
LAND AND TRIM THE TREES WE
STILL GET DROPPED TWICE NOW THE
SAME AS PEOPLE WHO DO NOTHING.
WE LIVE IN FOREST IN CALIFORNIA
OUR INSURANCE COMPANY DROP THIS
ONE AND A HALF YEARS AGO. WE
WERE ABLE TO GET NEW INSURANCE
THE COST US SEVENTEEN HUNDRED
DOLLARS LAST YEAR. IT WENT UP
TO OVER TEN THOUSAND DOLLARS
WHAT CAN WE DO ABOUT THIS IT IS
OUTRAGEOUS. AND ONE MORE. SO
THESE ARE THE INDIVIDUALS RIGHT
THESE IF YOU GO OUT IN THE
COMMUNITIES THIS IS WHAT YOU
HEAR. NOW THIS JUST SEEM LIKE
BIG NUMBERS BUT WHEN YOU GET
DOWN TO INDIVIDUAL AREAS IT'S
THERE'S A CONCENTRATION OF
PEOPLE IN THIS SITUATION.
MAKING THEIR INSURANCE ON
AFFORDABLE THEIR HOME ON
AFFORDABLE. THEIR HOME AND
SELLABLE. BUT NON RENEWALS ARE
ONLY A PART OF THE STORY.
INSERTS FILINGS FOR PREMIUM
HIKES ARE COMING IN RECORD
NUMBERS. IN TWO THOUSAND
FIFTEEN WE RECEIVED TWENTY FIVE.
OF FILINGS FOR RATE INCREASES
FOR HOMEOWNERS POLICIES TWENTY
FIVE. IN TWO THOUSAND SIXTEEN
IT WAS THIRTY FOUR. IN TWO
THOUSAND SEVENTEEN IT WAS FIFTY.
IN TWO THOUSAND EIGHTEEN IT WAS
SIXTY NINE. AND JUST THROUGH
JULY IN TWO THOUSAND NINETEEN
WERE ALREADY AT SIXTY THREE. WE
REALLY DON'T HAVE THAT MANY IN
SIR GROUPS WRITING HOMEOWNERS
INSURANCE IN CALIFORNIA SO WHAT
THAT TELLS YOU IS THE SAME
INSERTS ARE COMING IN FOR
MULTIPLE RATE INCREASES SO WITH
LAYERING ONE ON TOP OF THE NEXT.
IN THE BOOK OF EACH OF THOSE
RATE INCREASES CAN FALL HEAVILY
ON A SMALL SUBSET OF THAT
INSURERS RISK POPULATION. SAN
FELIPE DOES NOT HI WELL FIRE
AREAS. SO WHILE YOU LOOK AT A
RATE OF RATE FILING LOG IT SAYS
THAT COMPANIES ARE COMING IN
FOR A 7% INCREASE. THAT'S
TALKING ABOUT THE ROLE OF AN
AVERAGE ACROSS THE WHOLE BOOK
OF BUSINESS. OFTENTIMES WHAT IT
REALLY MEANS IS PEOPLE IN THE
URBAN AREA ARE GETTING NO
INCREASE. AND THE PEOPLE IN THE
HIGH RISK AREAS BECAUSE IT'S A
SMALL SEGMENT OF THE BOOK. ARE
GETTING DOUBLE DIGIT INCREASES
MASSIVE INCREASES 50% AND MORE
FREQUENTLY. AND WE UNDERSTAND
THE SERVICE ARE REACTING TO
POSSIBLY THE WORST CALIFORNIA
HOMERS LOSS RATIOS OF ALL TIME.
TWO HUNDRED AND 1% IN TWO
THOUSAND SEVENTEEN A HUNDRED
AND 70% IN TWO THOUSAND
EIGHTEEN. THUS FAR THE
DEPARTMENT HAS BEEN APPROVING
MUCH GREATER THAN 90% OF THE
REQUESTED INCREASES. AS
INSURERS HAVE DEMONSTRATED THAT
THE REQUEST HAVE BEEN ACTUALLY
SOUND. WITH THESE INCREASES
INSERTS WILL TAKE IN HUNDREDS
OF MILLIONS OF ADDITIONAL
DOLLARS EACH YEAR IN THE YEARS
AHEAD IN ANTICIPATION OF FUTURE
WILDFIRES. BUT COMMISSIONER
LARA AND THE DEPARTMENT ASKS
WHAT ABOUT THE HOMEOWNERS WHO
HAVE LIVED IN THESE.
COMMUNITIES FOR DECADES.
COVERAGE THAT WAS READILY
AVAILABLE FOR MANY YEARS AND
PREMIUMS THAT WERE NOT
SIGNIFICANTLY OUT OF LINE.
URBAN PRICES HAVE NOW FLIPPED
ON THEM. THEIR SITUATION TURNED
UPSIDE DOWN IN JUST A VERY FEW
YEARS AND THEY NEED HELP. SO MR
Là ALARA ALSO UNDERSTANDS THAT
THESE ISSUES NEED MASSIVE
ACTION AT MANY LEVELS TO
MITIGATE THE ISSUES AND PREPARE
FOR CLIMATE RISK AND A GROWING
STATE POPULATION. MUCH OF THIS
IS BEYOND THE SCOPE OF THE
INSURANCE INDUSTRY OR ITS
REGULATOR TO RESOLVE HELLO. BUT
THERE ARE SOME THINGS THAT THE
COMMISSIONER BELIEVES CAN BE
DONE TO HELP THOSE POLICY
HOLDERS WHO ARE IN CRISIS. AND
HELP THOSE WHO SUFFER LOSSES
FROM FUTURE WILDFIRES WE NEED
TO ANTICIPATE. THESE ARE
PROPOSALS THAT THE INSURANCE
INDUSTRY SHOULD DO AND THAT
WILL HAVE A MINIMAL IMPACT ON
COSTS OR LOSSES GIVEN THE SCOPE
OF THE CALIFORNIA MARKET PLACE.
ONE EXAMPLE A VERY IMPORTANT
CHANGE THAT WOULD ASSIST
HOMEOWNERS THROUGHOUT
CALIFORNIA WOULD TO GIVE THEM A
MUCH EARLIER NOTICE OF NON
RENEWAL OF THEIR INSURANCE
POLICIES. PEOPLE NEED TIME TO
MITIGATE THEIR PROPERTY OR PICK
TO POSSIBLY PRESERVE THEIR
RENEWAL. FOR HOMEOWNERS THIS
CAN MEAN TIME TO DO A MAJOR
PROJECT TO THEMSELVES OR TO
HIRE SOMEONE TO DO WHAT CAN BE
DIFFICULT. BUT IMPORTANT
PROJECT SUCH AS REMOVE TREES
ARE BRUSH THE NEXT AND THE NEXT
STRUCTURAL REPAIRS. IT MAY BE
NECESSARY TO MOVE PROPANE TANKS
AWAY FROM THE HOME OR REPLACE A
DECK WITH NON COMBUSTIBLE
MATERIALS OR IN CLOSE VINCE.
OLDER INDIVIDUALS IN PARTICULAR
MAY NEED TIME TO SEEK
ASSISTANCE. SOME POLICIES
HOLDERS MAY NEED TIME TO OBTAIN
LOANS OR GRANTS OR OTHER
ASSISTANCE WITH COSTS. A
HUNDRED EIGHT ONE HUNDRED AND
EIGHTY DAYS A NON RENEWAL
NOTICE. WOULD PROVIDE THE
NECESSARY TIME TO TAKE THESE
ACTIONS FOR PEOPLE AND THE
WILDLAND URBAN INTERFACE AND
ELSEWHERE. OR AT LEAST IT WOULD
ALLOW TIME FOR SCARING THE
MARKET FOR THAT POSSIBLY VERY
ELUSIVE IT RENEWAL COVERAGE
WITH AN ENTITY OTHER THAN THE
FAIR PLAN. SO WE'RE ASKING FOR
MUCH LONGER NOTICE. HOMEOWNERS
AND LOCAL LEADERS ALSO HAVE A
GREAT DESIRE TO HAVE A MEANS OF
ACHIEVING SOME CERTAINTY THAT
THERE IS AN AVENUE. NO MATTER
HOW NARROW THAT IF NAPA
NAVIGATED WOULD ALLOW A
HOMEOWNER TO RETAIN THEIR
COVERAGE. THIS COULD BE
ACHIEVED BY CREATING A
REQUIREMENT THAT INSURERS WILL
OFFER COVERAGE TO HOMEOWNERS
WHO MEET COMPREHENSIVE AND
EFFECTIVE HOME HARDENING
CONSTRUCTION STANDARDS. THIS
REQUIREMENT COULD ALLOW FOR
EXCEPTIONS FOR OTHER
CONSIDERATIONS OF RISK AND BE
FLEXIBLE TO ACCOUNT FOR AN
ARRAY OF ENVIRONMENTAL
CONDITIONS. IT WOULD TAKE TIME
FOR THIS MITIGATED POPULATION
OF WRIST TO GROW. BUT OVER TIME
THESE HOMES WITHOUT A NOT ONLY
BE REDUCING THEIR OWN RISK OF
LOS. BUT DECREASING AMBER FLOW
IN THE CASE OF A WILDFIRE TO
HELP PROTECT THEIR COMMUNITY.
SIGNAL EMITS SHOULD BE
INCREASED TO REDUCE THE
LIKELIHOOD OF A POLICY HOLDER
LEFT WITHOUT COMPENSATION IF
THERE ENSURE SOLVE SUFFERS ON
INSOLVENCY. ADDITIONAL LIVING
EXPENSE COVERAGE SHOULD BE
EXTENDED TO INCLUDE THOSE WHO
DON'T SUFFER A DIRECT LOSS TO
THEIR PROPERTY. BUT WHOSE HOMES
BECOME UNINHABITABLE FOR A TIME
UNTIL CRITICAL INFRASTRUCTURE
IS REPAIRED. AND I HOPE YOU'RE
FAMILIAR WITH WHAT HAPPENED IN
PARADISE ELECTRIC LINES DOWN
WATER SYSTEM DOWN. NO SEWAGE
SYSTEM. PEOPLE WHOSE HOMES WERE
STILL STANDING COULD NOT LIVE
IN THOSE HOMES. IT WOULD BE
IMPORTANT TO MANY POLICY
HOLDERS IF THE LAW WAS ENACTED
TO PROHIBIT THE REDUCTION IN
THE REPLACEMENT COST PAY TO A
CLAIMANT RESULTING FROM THE
DEDUCTION OF THE LAND VALUE.
WHEN THE INSERT WHO HAS
SUFFERED A TOTAL LOSS OF THE
DWELLING CHOOSES TO RE LOCATE
AND PURCHASE A HOME AT ANOTHER
LOCATION. THIS WOULD BE A
PARTICULARLY SIGNIFICANT VALUE
TO BOTH SENIOR CITIZENS. AND
FAMILIES WHO CAN'T GO THROUGH
THE ORDEAL AND TIME OF
REBUILDING. MR LARA HAS
SPECIFICALLY APPROACH THE
INDUSTRY TO SERIOUSLY CONSIDER
THIS MARK. SEC YOUR LANGUAGE ON
THE. NOVEL I THINK WE CAN GET
YOU LANGUAGE CERTAINLY. END OF
GREAT FINANCIAL. THE EMOTIONAL
BENEFIT CONSUMERS WHO HAVE
SUFFERED A TOTAL LOSS SHOULD BE
ABLE TO OBTAIN A SUBSTANTIAL
PORTION OF THEIR CONTENTS
CLAIMS. WITHOUT GOING THROUGH
THE GRUELING AND UNDERSTANDABLY
HEART RENDING PROCESS OF THE
HOMEOWNER HAVING TO IDENTIFY
EVERY ITEM HE OR SHE OWNED.
IT'S PURCHASE PRICE DATE OF
PURCHASE COST AND CONDITION
JUST THE KEPT THE ACTUAL CASH
VALUE THAT'S THE DEPRECIATED
VALUE. THEN HAVING TO SUBMIT
REPEATS WANTS THE RECEIPTS
GIVES ME WHAT'S THE ITEM IS
REPLACED TO RECEIVE THE
REPLACEMENT COST. WOULD LIKE
SOME WAIVER OF THE SIGNIFICANT
AMOUNT OF THE CONTENTS
INVENTORY. FINALLY NOBODY
THINKS THEY ARE UNDERINSURED
FOR THE REBUILD OF THEIR HOME.
THAT IS DUE IN LARGE PART
BECAUSE PEOPLE DON'T KNOW WHAT
IT COST TO BUILD A HOME. THE
GREAT MAJORITY OF HOMEOWNERS
RELY ON THE ESTIMATE EVERY LOOK
PLACEMENT COST PROVIDED BY THE
AND FOR. BUT MANY POLICIES HAVE
NEVER RECEIVED AN ESTIMATE
BECAUSE. INSURERS ARE
ABSOLUTELY OBLIGATED TO PROVIDE
ONE ESPECIALLY ON AN ANNUAL
BASIS. THAT SITUATION WOULD BE
IMPROVED IF THERE WAS A
REQUIREMENT THAT EVERY INSURED
GETS A ROUTINE ESTIMATE OF
REPLACEMENT COST AT REGULAR
INTERVALS. FAMILIES WHO SUFFER
A TOTAL LOSS AND WHO ARE UNDER.
UNDER INSURED PRESENT SOME OF
THE SADDEST SITUATIONS THAT WE
OF THE DEPARTMENT OF
MAINTENANCE FOR UNITED POLICY
HOLDERS AS WELL THAT WE DEAL
WITH AFTER A LOSS. AND AGAIN I
JUST WANT TO READ A COUPLE
COMMENTS FROM CONSUMERS VERY
BRIEFLY. THESE ARE FROM PEOPLE
WHO HAD LOSSES IN CINEMA.
STRUCTURAL REIMBURSEMENT WAS
NOT ADEQUATE TO REBUILD THE
HOUSE. WE WERE LED TO BELIEVE
WHEN WE PURCHASED AND REVIEWED
OUR POLICY PERIODICALLY THAT WE
WOULD HAVE ENOUGH COVERAGE TO
REBUILD OUR HOUSE AS IT WHAT'S-
WE WERE TOLD WE PAID FOR
ADDITIONAL COVERAGE. TO BE
CONFIDENT THAT WOULD WE WOULD
BE REIMBURSED AT THE RATE OF
BUILDING COST WHEN A DISASTER
OCCURRED. ANOTHER COMMENT.
POLICY LIMITS WOEFULLY
INADEQUATE FOR REBUILDING.
APPEALED MADE AND DENIED
BECAUSE THE COMPANY. FALLS BACK
ON CALIFORNIA LOSSING
HOMEOWNERS SOLELY RESPONSIBLE
FOR SETTING UP POLICY LIMITS
REGARDLESS OF GOAL STATED TO
AGENT NO JUST READ ONE MORE. MY
HOME WAS TWENTY FIVE HUNDRED
SQUARE FEET WITH A THREE CAR
GARAGE THE SIX HUNDRED SQUARE
FEET THIRTY ONE HUNDRED TOTAL.
THE ABSOLUTE CHEAPEST BETTER
WAS A PARTICULAR CONTRACTOR AT
TWO HUNDRED AND TWENTY DOLLARS
PER SQUARE FOOT WHICH WOULD
HAVE BEEN SIX HUNDRED AND
NINETY FOUR THOUSAND DOLLARS TO
REBUILD THE HOME. WE WERE IN
SHORT FOR FOUR HUNDRED AND
TWENTY EIGHT THOUSAND DOLLARS.
THAT BUILDER WENT OUT OF
BUSINESS BECAUSE THEIR BIDS
WERE TOO LOW SAID THE TWO
HUNDRED AND TWENTY DOLLARS A
SQUARE FOOT. WOULD NOT A
COVERED. SO THAT'S HOW UNDER
INSURED THEY WERE BY ABOUT. WE
NEED ABOUT DOUBLE THE LIMITS
THEY WERE AT. NO MENTION I
BELIEVE UNDER INSURANCE IS
SOMETHING TOTALLY WITHIN THE
INSURERS ABILITY TO RESOLVE. IT
IS SOMETHING THAT THEY DON'T
ALLOW TO OCCUR IN OTHER LINES
OF BUSINESS. IF YOU HAVE A
BUSINESS AND YOU WANT TO SAY I
NEED WORKERS COMP COVERAGE BUT
I I'M GONNA PUT MY PAYROLL AT
FIVE THOUSAND DOLLARS. THE
ANSWER WILL SAY WE NEED TO
VERIFY WHAT YOUR PAYROLL IS I
SEE YOU HAVE FIVE EMPLOYEES
THAT ARE FULL TIME EMPLOYEES.
WE THINK YOUR PREMIUM YOUR
PAYROLL SHOULD BE MORE LIKE A
HUNDRED THOUSAND DOLLARS. THEY
DON'T LET YOU COME UP WITH THE
NUMBER THEY DON'T LET YOU SET A
SQUARE FOOTAGE FOR YOUR
MERCANTIL BUSINESS AND JUST LET
I'D LIKE TO AND FOR FIVE
HUNDRED SQUARE FEET. THEY'RE
GOING TO MEASURE IT. THEY WANT
EVERYBODY TO PUT PAY A FAIR
PREMIUM. SAME SHOULD BE TRUE
FOR HOMEOWNERS COVERAGE. SO. I
WOULD BUY ONE THANK YOU FOR
LISTENING AND FOR THIS
OPPORTUNITY TO SPEAK BEFORE YOU.
AND I'M HAPPY TO ANSWER ANY OF
YOUR QUESTIONS THANK YOU VERY
MUCH MR Là CHAIR FOR YOUR
PRESENTATION VERY HELPFUL. IN
OTHER ANY QUESTIONS FOR MISTER
LARGER BEFORE WE MOVE TO THE
NEXT PANEL. IF NOT THE THANK
YOU AGAIN SIR VERY HELPFUL AND
LIKE IT WILL BE WILL BE IN
DISCUSSION WITH THE YOUR
APARTMENT ON MANY OF THESE
ISSUES. ONE OF POINT OUT THE TO.
THE BILL THAT I'M CARRYING.
DOES ADDRESS A COUPLE OF THE
ISSUES THAT MR LECTURE
MENTIONED I'LL BE PRESENTING
THAT BILL THIS AFTERNOON IN THE
SENATE INSURANCE COMMITTEE SO
THERE ARE A- I THINK IN THE-
SPIRIT OF A PROBLEM SOLVING
WERE MAKING SOME GOOD SOME GOOD
PROGRESS. ALL RIGHT THE NEXT
PANEL IS SO CONSUMER
PERSPECTIVES WE HAVE RANDY
FLETCHER WHO IS A COUNTY
SUPERVISOR FROM YUBA COUNTY
NEARBY. AND AMY BACH THE
EXECUTIVE DIRECTOR OF UNITED
POLICY HOLDERS. AMY WANT YOU
WANT YOU GO AHEAD AND THEN
WE'LL HEAR FROM. AT THE
SUPERVISOR. OKAY THANK YOU AND
GOOD MORNING IT'S AN ABSOLUTE
PLEASURE TO BE HERE IN THE
SEARCH FOR CONSTRUCTIVE
SOLUTIONS TO THE SITUATION IN
WHICH WE FIND OURSELVES IN A
VERY BRIEF INTRODUCTION ABOUT
MYSELF AND UNITED POLICY
HOLDERS. AND THE VERY LONG
RANGE PERSPECTIVE WE HAVE ON
THE AND- WHAT WE HAVE BEEN
TRYING TO CONTINUE CALLING A
CRUNCH BUT WHICH IS
INCREASINGLY FEELING LIKE A
CRISIS OF THE AVAILABILITY IN
HOMEOWNER AND AFFORDABILITY OF
HOME INSURANCE IN OUR STATE.
I'M OUR ORGANIZATION WAS
FOUNDED AROUND THE TIME OF THE
OAKLAND BERKELEY FIRE IN
NINETEEN NINETY ONE WE'RE FIVE
OH ONE SEE THREE WE HAVE
SUBJECT MATTER EXPERTISE IN
INSURANCE AND IN DISASTER
RECOVERY AND THAT WE HAVE
DEVELOPED OVER. THE LAST TWENTY
EIGHT YEARS PRIMARILY WORKING
IN THE AFTERMATH OF WILDFIRES
AND I I'VE HAD THE PRIVILEGE OF
WORKING WITH A NUMBER OF YOU
THAT ARE HERE AND I KNOW WE'RE
GONNA BE AT A FORUM THIS
WEEKEND THAT. ASSEMBLYMAN CHU
IS HOSTING TO EDUCATE HIS
CONSTITUENTS ON PROTECTING
THEIR ASSETS AND I THINK WE ALL
ACKNOWLEDGE THAT INSURANCE IS A
VERY VALUABLE SYSTEM THAT WE
WANT TO WORK WE HAVE PEOPLE WHO
NEED WE WANT PEOPLE TO PROTECT
THEIR ASSETS WE ALSO WANT THEM
TO BE IN COMPLIANCE WITH THE
TERMS OF THEIR MORTGAGES. SO
WHO IS TO REASONS WHY IT'S
IMPORTANT TO MAINTAIN A MARKET
WHERE PEOPLE CAN AFFORD
REASONABLY ADEQUATE COVERAGE ON
THEIR HOME AND THAT HAS AS
YOU'VE ALL BEEN HEARING. BECOME
A LOT MORE CHALLENGING IN
RECENT YEARS OUR ORGANIZATION
RUNS TO PROGRAMS THAT ARE
GERMANE ONE THE ROAD MAP TO
PREPAREDNESS THE OTHER THE
ROADMAP TO RECOVERY AND THROUGH
THOSE PROGRAMS A RIGHT NOW MY
TEAM HAS BANNED IS IN.
ASSEMBLYMEMBER GALLAGHER'S OFF
A DISTRICT. WE HAVE BEEN DOING
WORKSHOPS THERE SINCE. THE
FIRES WE ARE ALSO HAVING
WORKSHOPS IN THOUSAND OAKS AND
I ALSO HAVE BEEN. WORKING IN
THAT SNOW MAP AREA AND SO YOU
KNOW WE'VE BEEN DEALING WITH
ALL THESE ISSUES THAT YOU JUST
HEARD JOEL OUT YOUR TALK ABOUT
ON WHAT HAPPENS WHEN PEOPLE'S
INSURANCE IS AN ADEQUATE. THAT
HAD BEEN OUR FOCUS BECAUSE TWO
THIRDS OF THE PEOPLE WE WORK
WITH TURNED OUT TO NOT HAVE
ENOUGH INSURANCE SO YOU KNOW
THIS SATURDAY AT ASSEMBLYMAN
SHOES EVENT WILL BE TALKING
ABOUT THAT BUT OF COURSE. WE'RE
HERE REALLY TO TALK ABOUT
SOMETHING THAT'S THAT'S GOT A
JUMPED INTO THE HEADLINES WHERE
OKAY YOU KNOW SOME PEOPLE ARE
HAVING TROUBLE GETTING ANY
INSURANCE AT ALL LET ALONE A
NOT. SO IT'S A MATTER OF DEGREE
AND I UNDERSTAND WE HAVE A
PRODUCER HERE AND I WANTED. THE
COMMITTEE TO KNOW THAT IN
PREPARATION FOR TODAY I CHECKED
IN WITH A NUMBER OF OUR
PRODUCER VISORS I HAVE AGENTS
AND BOTH DIRECT CAPTIVE IN.
INDEPENDENCE THAT I CHECKED
WITH HOW ARE YOU DOING IN
GETTING YOUR CLIENT PLACED AND
MY CONCERN LEVEL IS ELEVATED
QUITE A BIT IN THE LAST FORTY
EIGHT HOURS JUST TALKING. TO
SOME OF THE PRODUCERS WHO HAVE
BEEN HAVE BEEN. ABLE TO PUT
THEIR CLIENTS WITH SURPLUS
LINES AND NOT THE NAME BRANDS.
IT'S NOT EVEN ON THE TABLE ALL
FOR A LOT OF THEM YOU KNOW
CHILD PURER A IG THE STATE BUYS
THAT HAD TRADITIONALLY BEEN
WINTER. THE HIGHER AND HOME
EVEN THEN ARE THE EVEN THERE
ARE THESE PRODUCERS ARE HAVING
A HARD TIME AND THEY'RE OUT.
WHEN YOU GO TO THE FAIR PLAN
FOR THE FIRST TIME AND THEY
KNOW A LOT ABOUT THE FIT AND
SO. THERE'S A COUPLE THINGS I
WANT TO KNOW WE DON'T HAVE
INFINITE AMOUNT OF TIME I WANT
TO GIVE YOU THE MOST SORT OF
HIGH LEVEL. THIS IS AN END OF
AND YOU KNOW THE REPRESENTATIVE
IT'S HERE WITH ME. SURE YEAH WE
HAD A CRASH COURSE IN ASSURANCE
AND UNLESS YOU'RE ALREADY IN
THIS ON THIS ISSUE. FOR LAST
YEAR BECAUSE IT. AS TO
TECHNOLOGICAL TOOLS THAT ARE
SCARING THE CRAP OUT OF THEM.
OF ABOUT THE RISKS THAT THEY
FACE IN THE STATE. BUT I DO
WANT YOU TO REMEMBER AT OF
EVERYTHING THAT'S COMING AT YOU
WHAT JOEL SAID. ABOUT THE RATE
INCREASES THAT HAVE BEEN
GRANTED AND THE MONEY THAT IS
GOING TO BE COMING INTO THE
COFFERS OF THE INSURERS AND
JUST REMEMBER THAT THAT IS A- A
SOURCE OF SOME OPTIMISM HERE
AND THAT THIS IS A PROBLEM.
THAT NEEDS TO BE HANDLED VERY
THOUGHTFUL. BECAUSE THIS IS A
MARKET THAT REQUIRES BALANCE
STRAIGHT SO WE DON'T WANT TO GO
TOO FAR WITH MANDATES THAT THAT
MAKE A PROBLEM WORSE WE WANT TO
FIND. THE I THINK A LOT OF THE
SOLUTIONS THAT WE NEED HERE ARE
GOING TO BE SMALL STEPS SUCH AS
THE RIGHT OUT CREDIT ISSUE THAT
AT LEAST TALKING ABOUT. SUCH AS
SOME OF THE IMPROVEMENTS THAT
JOLT CALLED OUT GIVING PEOPLE
MORE TIME TO SHOP. BUT THE
THINGS I WANT TO HIGHLIGHT FOR
YOU. OUR ORGANIZATION IS VERY
CLOSE TO THE GROUND SO ALL
THOSE PEOPLE WHOSE QUOTES JOEL
READ YOU. THOSE ARE PEOPLE WE
HEAR FROM THEM ALL THE TIME AND
I HAD BEEN COMING UP HERE FOR
MEETINGS OF THE STREAM
MORTALITY TASK FORCE AND INTO
THE GOVERNOR'S OFFICE OVER THE
LAST FOUR YEARS BECAUSE- I SAW
THIS COMING. WEEK WE A LOT OF
US SAW THIS COMING AND THEN THE
WILD FIRES JUST MADE EVERYTHING
A LOT WORSE. SO THAT. WE HAVE A
SURVEY ORGANIZATION HAS BEEN
CONDUCTING AND THE- THAT WE DO
SURVEYS THAT'S A BIG PART OF
OUR WORK AND THE FIGURE OF TWO
THIRDS OF DISASTER SURVIVORS
BEING UNDERINSURED COMES.
LARGELY FROM OUR SURVEYS AND
IT'S BEEN A CONSISTENT SURVEY
BUT I WANT TO PUT THAT ASIDE
FROM IT WE HAVE A SURVEY GOING
ON OUR HOME PAGE. ON FOR DON
RENEWALS BECAUSE YEAH WE HAD
WERE WERE SORT OF PART OF OUR
JOB IS TO BE A FULL TIME NAG
AND WORRY WART. SO WE HAD BEEN
SAYING TO THE DEPARTMENT GOSH
YOU KNOW. SURPLUS LINES
COMPANIES ARE PICKING UP A LOT
OF THE RISKS THAT THE NAME
BRAND CARRIERS HAD BEEN
COVERING BUT THEY'RE NOT
COVERED BY SIGA. SO YEAH WE HAD
ONE COMPANY GO UNDER MERCED
FROM THE CAMPFIRE THAT'S- YOU
KNOW NOT GOOD BUT GREAT THAT IT
WAS ONLY ONE WE DON'T WANT TO
BE. WE DON'T WANT THAT NUMBER
TO GROW AFTER THE NEXT RIGHT
EVENTS WE WANT TO KEEP AN EYE
ON. HOW MANY POLICIES ARE GOING
INTO THE SURPLUS LINES MARKET
GIVEN THAT. SURPLUS LINES
POLICIES ARE NOT BACKED BY THE
STATE INSOLVENCY POINT SO THAT
ISSOMETHING I DO THINK YOU'RE-
YOU GUYS REALLY WANT TO DO SOME
THINKING IT OUT. AND BECAUSE I.
AM AN OFFICIAL CONSUMER RAP AT
TO THE NATIONAL. ASSOCIATION OF
INSURANCE COMMISSIONERS I'VE
HAD THE OPPORTUNITY OVER MANY
YEARS SEE WHAT HAPPENED IN THE-
STATE WHEN THEY HAD. SIMILAR A
SIMILAR CRISIS WHERE ARE A LOT
OF THE IN RANCHERS WENT AWAY
DECIDED THEY DIDN'T WANT RIGHT.
INSURANCE IN. FLORIDA AND THEN
THE STATE. PRETTY WELL INTO A-
EQUIVALENT OF THE FAIR PLAN
SUDDENLY THERE FAIR PLAN WAS
WHERE ALL THE WOOD. THEY HAD
THE MUCH THE BY FAR LARGEST
MARKET SHARE IN THE STATE. THE
THERE WAS AND OBVIOUSLY Và
SIMILAR CHALLENGES TO WHAT AT
LEAST LAID OUT. THEY DO THEY'RE
NOT THEY WERE BUILT. TO CARRY
THAT MUCH WEIGHT. THEY DON'T
HAVE ENOUGH STAFF I MEAN AT
LEAST PUT IN HER REMARKS THEY
HAVE SIXTY PEOPLE ON THEIR TEAM
I MEAN THESE SORT OF NOT SIMPLE
THINGS MATTER. AND SO BUT WHAT
WE SAW HAPPEN IN FLORIDA WAS
THE STATE HAD TO DO THEY DID A
SORT OF A BY BY A INCENTIVE
PROGRAM WHERE THEY ACTUALLY.
INCENTIVIZED FINANCIALLY. THE
NEW ENTRANTS TO COME IN AND
TAKE UP RISKS I DON'T KNOW IF
WE WANT TO GO THAT WAY BUT I DO
KNOW. THAT WE DON'T NEED TO
START FROM SCRATCH HERE WE CAN
BE LOOKING AT SOME OTHER
SOLUTIONS THAT HAVE BEEN TRIED.
I AM I YOU KNOW I AM VERY
MINDFUL. OF CRITICISMS THAT GET
LEVELED AGAINST THE FAIR PLAN
BY CONSUMERS BARTON JUST
BECAUSE- BECAUSE WE WORK IN
WILD FIRE AREAS WHERE THERE
HAVE BEEN REPEAT FIRES WHERE.
THERE'S A NUMBER OF PEOPLE THAT
HAVE BEEN IN THE FAIR PLAN. AND
WE KNOW THAT IT CAN BE
FRUSTRATING FOR PEOPLE AND I
THINK YOU KNOW TO BECAUSE THE
COVERAGE IS LIMITED AND BUT YOU
WOULDN'T NECESSARILY KNOW IT.
FROM THE PRICING BECAUSE THE
PRICING WOULD MAKE YOU THINK.
THAT IT'S PRETTY GOOD BECAUSE
IT'S MORE THAN YOU WERE PAYING
YOU KNOW FOR YOUR OLD
INSURANCE. SO OUR ORGANIZATION
IS ALWAYS LOOKING TO GIVE
PEOPLE. NEWS THEY CAN USE IN
THE HERE AND NOW WHAT CAN YOU
DO IN THIS SITUATION. WHILE WE
ALSO GET TO ENGAGE AT THE
POLICY LEVEL WITH PEOPLE LIKE
YOU. SO WE HAVE A PUBLICATION
DROP BY YOUR INSURER IN
CALIFORNIA WHAT TO DO. AND THIS
IS A DOUBLE SIDED SIMPLE
DOCUMENT THAT I WILL MAKE
AVAILABLE TO ANY OF YOU TO
SHARE WITH YOUR CONSTITUENTS.
I'M NUMBER ONE TRYING GET YOUR
INSURER TO CHANGE COURSE AND
AGREED TO RENEW YOU. WE TALK A
LITTLE BIT ABOUT HOW YOUR LOCAL
FIRE DEPARTMENT THEY HELP. YOU
BUT HERE AGAIN THIS CUT FALLS
BACK IN YOUR LAP. WE DON'T HAVE
MITIGATION STANDARDS FOR WHILE
BUYER REDUCTION THE STATE. THE
INSURERS HAVE BEEN VERY VERY.
RELUCTANT TO VOLUNTARILY AGREE
THEY YOU KNOW I'VE LEARNED NOT
TO USE THE WORD DISCOUNT. WHEN
IT COMES TO YOU KNOW WILL IF
SOMEBODY DOES. DO WE WHACK AND
CLEAR BRUSH BILLION TO REWARD
THEM OR ARE THEY CAN JUST HAVE
WASTE OF THEIR TIME AND MONEY
AND NOW BE EVEN MORE. ANGRY AND
I THINK INSURERS ARE GOING TO
REALLY HAVE TO COME FORWARD I'D
LIKE TO SEE THEM COME FORWARD
WITH THEIR IDEA BECAUSE-
THERE'S BEEN GENERALLY A SENSE
OF. WHY CAN'T WE DO DISCOUNTS
CAN'T POLICE IF THEY CONTINUE
TO BRIGHT WE HAVE TO DO
SOMETHING. RIGHT BUT WE DON'T
HAVE. A RIGHT NOW. YOU KNOW
WHEN WE SAGE TO GET YOUR
INSURANCE CHANGED COURSE IN.
THAT HAD BEEN GOOD ADVICE OF
PEOPLE WERE WORKING WITH A GOOD
AGENT OR BROKER THAT THAT KNEW
HOW TO FIND THE COMPANY THAT
WOULD WRITE BUT THAT SEEMS TO
BE GETTING EVEN HARDER. SO NOW
I THINK WE DO HAVE TO GIVE
PEOPLE MORE TIME I THINK GIVING
THEM INSTEAD OF FORTY FIVE DAYS
NOTICE. GIVING HIM A HUNDRED
AND EIGHTY DAYS MAKES A LOT OF
SENSE. ELTON AND I THINK YOU
KNOW GENERALLY THE CARRIERS NO.
YOU KNOW HALFWAY INTO THE
POLICY YEAR WHETHER THEY'RE
GOING TO RENEW THAT POLICY OR
NOT AND I THINK SO SOMETHING
MORE THAN FORTY FIVE IS
DEFINITELY CALLED FOR. I THINK
WE DO HAVE TO DO A LOT MORE AND
EDUCATION OF AGENTS ABOUT THE
FAIR PLAN YOU KNOW ONE OF THE
AGENTS I TALK TO YEP. YESTERDAY
SAID WELL OF COURSE YOU CAN'T
GET A LEAD YOU CAN GET
TEMPORARY RANK COVERAGE THE
FAIR PLAN. I CAN'T I FEEL SO I
DON'T WANT TO PUT ANY OF MY
CLIENTS IN THAT BECAUSE- THEY
COULD LOSE THEIR HOME IF THEY
CAN'T PAY THEIR MORTGAGE. SO IT
TURNS OUT THAT'S ACTUALLY NOT
ACCURATE YOU CAN GET. SOME A.
ELLIE COVERAGE OF THE FAIR PLAN
SO ALWAYS WITH THESE THESE WHAT
WE CALL RESIDUAL MARKET
PROGRAMS LIKE THE FLOOD.
POLICIES OR THE CIA A LOT OF
AGENTS. REALLY THE BETTER
AGENTS DON'T KNOW THAT MUCH
ABOUTTHESE PLANS BECAUSE THE
COMMISSIONS ARE LOWER AND THEY
DON'T LIKE TO PUT PEOPLE IN
THESE PLANS BECAUSE THEY DON'T.
HAVE THE CONFIDENCE OR EAT AND
THEY THEY WOULD RATHER PUT A
MINUTE WITH A COMPANY THAT THEY
KNOW. BUT NOW YOU KNOW WE'RE
GOING TO HAVE TO DO MORE
EDUCATION ON THE PRODUCER SIDE.
I'M AND I THINK JUST TO TRY TO
GET CLOSER TO WRAPPING UP SO.
SO WHO STEP TWO DON'T PANIC
STOP START SHOPPING. YOU KNOW A
LOT OF PEOPLE HAVE THIS FEELING
THAT GEE. YOU KNOW DON'T I HAVE
SOME VESTED RIGHTS HERE. I'VE
BEEN PAYING FOR THIS POLICY FOR
THIRTY YEARS AND YOU KNOW AND
ALL THESE YEARS I NEVER HADA
CLAIM. HOW CAN THEY JUST DROP
ME WHEN I NOTHING'S CHANGED ON
MY END. SO YOU KNOW IT PEOPLE
ARE PRETTY SHOCKED WHEN YOU SAY.
TO THEM THERE'S REALLY NOTHING
THAT THIS. DATE OR A LAWYER
COULD DO AS LONG AS THEY GAVE
YOU FORTY FIVE DAYS NOTICE. AND
AS LONG AS THEIR OF. THEIR
COMPLYING WITH THEIR OWN
UNDERWRITING GUIDELINES AND NOT
BEING DISCRIMINATORY OR
INCONSISTENT. RIGHT SO. SO
AGAIN THESE ARE OPPORTUNITIES
FOR THE LEGISLATURE TO MAYBE.
YOU KNOW WE WERE LOOKING TO
BALANCE RIGHT YOU DON'T WANT.
TO SAVING THE INSURERS OKAY NOW
YOU HAVE TO TAKE ALL THESE
PEOPLE YOU DON'T WANT. I DON'T
THINK THAT'S GOING TO BE
HEALTHY FOR OUR MARKET. SO
WE'RE TRYING TO FIND A MIDDLE
GROUND. SO THAT THE PEOPLE WHO
WHO ARE ARE BEING RESPONSIBLE
HOMEOWNERS GET. HAVE A
REASONABLE GET TREATED. FAIRLY
AND WHEN THEY WHEN THEY GET NON
RENEWED. ON THE THIRD PIECE
SHOP SMART OBVIOUSLY THE
LEGISLATURE HAS. HAD HAS
REQUIRED NOW THE DEPARTMENT TO
DEVELOP A MORE SOPHISTICATED
SHOPPING TOOL THAT'S IN
PROGRESS. OUR ORGANIZATION HAS
HAD A TOOL BASICALLY JUST A
SYSTEM CALLED MATCH UP GOING.
WHEN THERE'S BEEN A PROBLEM
LIKE THIS IT BUT REALLY ALL IT
IS. WE'RE IN TOUCH WITH VERY
PROACTIVE PRO CONSUMER. IN OF
AGENTS AND THAT HALF OF THAT
WHAT YOU CAN SAY I CAN HELP
THESE PEOPLE AND WE JUST.
CONNECT THEM WITH THOSE AGENTS
IT'S NOT PARTICULARLY
SOPHISTICATED BUT IT HAS
WORKED. AND THIRD IS THE FAIR
PLAN AS A LAST RESORT. SO IN
CLOSING I THINK WE HAVE SOME
OPPORTUNITIES. HERE FOR PROBLEM
SOLVING TOGETHER. WE CONSUMER
ASSISTANCE WITH SHOPPING IS A
BIG ONE. AND THAT IS IN
PROGRESS. GETTING SOME SORT OF
MITIGATE FOUGHT WILDFIRE RISK
REDUCTION STANDARDS IN PLACE
AND SAYING IF YOU'VE DONE X. Y.
AND Z. YOU KNOW YOU'RE NOT
GOING TO GET DROPPED OR YOU GET
SOME KIND OF HELP FOR HAVING
BEEN RESPONSIBLE A PROPERTY
OWNER I'M I DO THINK WE ARE
GOING TO NEED TO STRENGTHEN THE
FAIR PLANS CAPACITY. IN TERMS
OF THEIR STAFFING INYO THEY ARE
THERE'S NO QUESTION JULES
RIGHT. WE'RE NOT WE'RE JUST IT
I THINK WE'RE RIGHT IN THE
MIDDLE MAYBE EVEN AT THE
BEGINNING OF THIS MARKET
TURBULENCE AND I THINK YOU KNOW
THE REALTORS THE FACT THAT YOU
DON'T HAVE A REALTOR PANEL HERE
JUST TELLS YOU YOU KNOW IF YOU
DO THIS HEARING IN ANOTHER
COUPLE MONTHS YOU WELL ON
BECAUSE- YOU KNOW THE
CALIFORNIA ASSOCIATION OF
REALTORS THEY'RE THEY'RE-
THEY'RE CONCERNED LEVEL IS
GROWING FAST AND ABOUT.
TRANSACTION IS NOT BEING ABLE
TO GO THROUGH BECAUSE INSURANCE
COULDN'T BE PROCURED SO I'D SAY
THEN WE DON'T HAVE ANY
FINANCIAL ASSISTANCE PROGRAM
EVEN IN THE ROUGH STAGES FOR
PEOPLE WHO FOR WHOM THE PRICE
OF THEIR HOME INSURANCE HAS
BECOME A AND UNSUSTAINABLE
BURDEN FOR THEM YOU KNOW WHAT
THEY HAD BEEN PAYING EIGHT
HUNDRED DOLLARS A YEAR AND
SUDDENLY THERE BILL AS SIX
THOUSAND. WE DON'T HAVE ANY
KIND OF FINANCIAL ASSISTANCE
PROGRAM IN PLACE WE DON'T HAVE
THE SUBSIDIES AND AGAIN IT IT
YOU KNOW BECAUSE INSURANCE IS
DIFFERENT FROM A REGULAR
CONSUMER PRODUCT YOU ARE
LEGALLY REQUIRED TO BUY IT YOU
YOU'RE A CAPTIVE IN A SENSE I
THINK WE DO HAVE TO DEVELOP
SOME SORT OF ASSISTANCE
PROGRAM. FOR PEOPLE WITH
PREMIUMS SO THAT THEY CAN
CONTINUE TO PROTECT THEIR
ASSETS I'M FINALLY I DO THINK
THIS IS A GREAT OPPORTUNITY FOR
US TO TRY TO GET BACK TO SOME
SORT OF A AND A SIMPLER SIMPLER.
POLICY THAT SO THAT PEOPLE
DON'T HAVE TO BUY A FAIR PLAN
POLICY I D. IC. UP FLOOD POLICY
EARTHQUAKE FORCE AT. POLICIES
YOU KNOW IT JUST LIKE WE'VE
BEEN GOING THROUGH THIS
ANALYSIS AT OF THE AFFORDABLE
CARE ACT WHAT'S AN ESSENTIAL
BENEFIT. WHAT IS THE ABSOLUTE
MOST ESSENTIAL COMPONENTS OF
SOMEBODY'S HOME THAT WE KNOW
THAT THEY SHOULD BE PROTECTING
AND CAN WE- HELP THE MARKET.
YOU DEVELOP A SIMPLER BASIC
PRODUCT THAT WILL MEET THOSE
NEEDS THAT PEOPLE CAN ACTUALLY
AFFORD. AND I DO THINK SOME
SOME EFFORT HAS TO GO INTO THAT
AND I REALLY DO APPRECIATE.
TIME AND JUST TO MENTION YES WE
DO WANT THE COMPETITIVE MARKET
TO BOUNCE BACK WE DO WANT YOU
KNOW THE AS IT HAS. TYPICALLY
THE SMALLER GUYS THAT DON'T
HAVE THE BIG YOU KNOW BIG
ADVERTISING BUDGETS THAT DON'T
SPONSOR THE THOSE BIG SPORTING
EVENTS A LOT OF THEM CAN DO
HAVE CAPACITY TO TAKE ON MORE.
BUT THEY'RE GOING TO LOOK AT
THE BIG BOYS AND SAY WELL IF
THEY'RE IF THEY'RE GETTING OUT
MAYBE THERE'S SOMETHING WE
SHOULD KNOW MAYBE WE SHOULDN'T
GET IN. SO I'M GLAD TO HEAR AT
LEAST IN IS ENGAGING IN
DIALOGUE WITH. PRIVATE
COMPANIES TO SEE IF SHE CAN
CALM THEM DOWN AND GET THEM
TAKE ON SOME MORE RISK BECAUSE
THERE IS SORT OF THIS. THERE IS
A LITTLE BIT OF EMOTIONAL I
THINK YOU KNOW OF PANICKING
GOING ON SO THANK YOU FOR BEING
THOUGHTFUL AND RESPONSIBLE HERE
AND I AM. AVAILABLE. TO HELP IN
ANY WAY WE CAN THANK YOU MISS
BACH IN THE. THE CONSUMER
EDUCATION PROVIDED BY YOUR
ORGANIZATION NINE IT WAS VERY
HELPFUL TO. TWO FOLKS ALL OVER
CALIFORNIA SO THANK YOU AGAIN
FOR YEAR FOR THAT WORK THAT YOU
DO AND ALSO FOR THE
PERSPECTIVES THAT YOU SHARED.
THIS MORNING AND NOW WE'LL HEAR
FROM A LOCAL COUNTY SUPERVISOR
MISTER RANDY FLETCHER WHO ALSO
HAPPENS TO BE IN THE INSURANCE
BUSINESS GO AHEAD SIR THANK YOU
VERY MUCH THANKS FOR BEING HERE
THIS MORNING AND LISTENING TO.
OUR CRISIS IN THE IN THE FIELD.
I'VE BEEN A COUNTY SUPERVISOR
FOR ABOUT FIVE YEARS AND AN
INSURANCE BROKER A LITTLE OVER
FORTY YEARS. OVER THAT FORTY
YEAR PERIOD I'VE ONLY SEEN THIS
CRISIS ONE TIME. AND IT
CERTAINLY IS FROM MY OPINION.
VERY MUCH A CRISIS WHAT I SEE
IS. THE TYPICAL ICEBERG AND
WHAT YOU'VE SEEN IS ONLY THE
BEGINNING UNFORTUNATELY I DON'T
LIKE WHAT I SEE OR WHERE WERE
HEADED. I SUSPECT WE'RE ALL
HERE FOR ONE PRIMARY REASON AND
THAT'S TO HELP THE PUBLIC. FROM
MY POSITIONING. IT'S GOING TO
GET A LOT WORSE BEFORE IT GETS
BETTER NONE OF THIS HAPPENED IN
A SHORT TERM IT HAS BEEN GOING
ON FOR A PERIOD OF YEARS BEING
A MEMBER OF RC RC AND WE BEGAN
TO LOOK AT THE TREE MORTALITY
THE ISSUES IN THE FOOT HILLS.
AND THEN THE FIRES. AND ALL OF
THIS HAS BEEN BUILDING. AND I'M
IN A I'M IN A REALLY FOCUSES
MUCH AS THEY CAN BECAUSE TIME
IS VALUABLE ON YOUR PART. BUT
THE WAY I'VE SEEN THIS FOR THE
LAST. A FEW MONTHS AT LEAST IS
THERE ARE TWO OPTIONS TO HEAD
DOWN THERE IS THE LONG TERM
WORK ON THIS PROBLEM IN THE
SHORT TERM. ONE OF THE SHORT
TERM OBJECTIVES THAT I WOULD
ENCOURAGE THE LEGISLATURE TO
GET INVOLVED WITH. IS BEING
ABLE TO PROVIDE THE PUBLIC WITH
THE MAXIMUM AMOUNT OF COVERAGE.
TO TAKE CARE OF THEIR DAILY
ISSUED NOW. THE LONG TERM WE'RE
GOING TO HAVE TO DEAL WITH THE
PUBLIC ATTITUDE THE WAY THEY
LOOK AT INSURANCE THE WAY THEY
MODIFIED THEIR LIFESTYLE. THE
COMMUNITIES HARDENING OF OUR
COMMUNITIES AND WORKING ON A
STATE PROGRAM. AND I'VE SEEN
THAT I'VE BEEN TO MORE
COMMITTEE MEETINGS MORE
MEETINGS WITH THE STATE THAN I
EVER THOUGHT MORE OUT THERE. AN
ICY COOPERATION THIS HEADED IN
THE RIGHT DIRECTION. SO I THINK
THAT THAT PIECE OF THAT PUZZLE
IS ACTUALLY COMING TOGETHER
PRETTY WELL. NOW COMES A WHAT
CAN WE DO IN A RELATIVELY SHORT
PERIOD OF TIME. I'LL TELL YA
JUST IN THE LAST HOUR I'VE
HEARD SOME GREAT IDEAS I THINK
YOU HAVE A VERY TALENTED ROOM
FULL OF EXPERTS HERE. THE
RUNNER POSITION THEY CAN
ACTUALLY MAKE THINGS HAPPEN.
AND CAN DO THINGS FOR THE
PUBLIC IN A RELATIVELY SHORT
PERIOD OF TIME. AND I'M GONNA
GIVE IT JUST A COUPLE OF IDEAS
THAT I'VE HAD A DISCUSSION WITH
ASSEMBLYMAN GALLAGHER ON. I
WOULD TAKE THE FAIR PLAN. AND I
WOULD TRY AND ENHANCE IT WITH A
HUNDRED AND 25% A HUNDRED AND
50% 2100% OF OPPORTUNITY TO
ENSURE THEIR HOUSE. THERE'S
LOTS OF DETAILS ATTACHED TO
THIS AND I KNOW IT'S NOT EASY.
BUT I THINK AGAIN WITHIN A FIVE
MINUTE DISCUSSION WITH THE FARE
PAYING A PLAN IN THE BACK OF
THIS ROOM I THINK THERE'S
OPPORTUNITY IN A WILL TO MAKE
CERTAIN THINGS HAPPEN ONCE YOU
PUT THE RIGHT PEOPLE AROUND THE
TABLE. AND ACTUALLY THINK YOU
HAVE THE RIGHT PEOPLE HERE. I
WOULD DO THAT NUMBER ONE. I'D
ALSO LOOK AT THE OPPORTUNITY TO
ENHANCE THE FAIR PLAN WITH
SPECIAL FORM COVERAGE. IF THE
NOT SPECIAL FORM AT THE VERY
LEAST BROAD FORM COVERAGE AND
THESE ARE TERMINOLOGIES THAT IN
THE INSURANCE INDUSTRY A LOT OF
US TO KNOW AND UNDERSTAND AND I
DON'T THINK IT'S NECESSARY TO
GO INTO DETAIL AT THIS POINT. I
THINK THE LIABILITY IS STILL A
CRITICAL PIECE OF AT. WHEN YOU
ADD THE LIABILITY TO ANY
HOMEOWNERS THE SPECIAL FOR THE
SPECIAL AND THE LIABILITY THAT
COMES IN THE STANDARD PREFERRED
MARKET POLICY THEY'RE NOT
EXPENSIVE. YOU HAVE TO WORK
WITH THEM A BIT AND HAVE
EXCLUSIONS RATHER IT'S A PIT
BULL AN ELEPHANT OR HER TO
CATTLE IN YOUR BACKYARD YOU
HAVE EXCLUSIONS BUT YET YOU
STILL PROVIDE LIABILITY MOST OF
YOUR HOMEOWNER POLICIES AS YOU
ALL SAID HERE IF YOU READ THEM
YOU'LL FIND. LOTS OF EXCLUSIONS
THAT ARE NOT INCLUDED. THAT
SAME EXCLUSION CAN BE ATTACHED
TO THE FAIR PLAN I DON'T
BELIEVE IT'S GOING TO BE THAT
COMPLICATED. I ALSO BELIEVE
THAT THERE NEEDS TO BE A BIT OF
RE UNDERWRITING WITHIN THE FAIR
PLAN. THERE ARE SOME PROVISIONS
THAT NEED TO BE MODIFIED THAT
WOULD BE FINANCIALLY PRUDENT I
DON'T THINK THERE'S ANY
INTENTION HERE TO UNDERMINE THE
FAIR PLAN. I THINK WHAT WE'RE
TRYING TO DO AS A CONSUMER. IS
TO HELP THEM BUILD ONE POLICY
NOT TO BUILD MULTIPLE POLICIES
THAT BEGIN TO GET VERY
EXPENSIVE. I'VE HEARD OF THE
RATES AND I'VE SEEN THE RATES
THAT FROM A STANDARD PREFERRED
POLICY IN THE FIFTEEN HUNDRED
DOLLAR RANGE ARE NOW SIX
THOUSAND DOLLARS A MONTH. THAT
IS UNREALISTIC. THAT WILL HAVE
AN IMPACT ON OUR COMMUNITIES ON
OUR STATE HONOR BUDGET HONOR
REAL ESTATE VALUES THAT IS NOT
APPROPRIATE. AND THERE ARE
SOLUTIONS TO THIS. I'D
LITERALLY WOULD ENCOURAGE YOU
TO SEND THIS GROUP. HOW TO MEET
ON A REGULAR BASIS OVER THE
NEXT THIRTY TO SIXTY DAYS TO
ACTUALLY COME BACK TO THIS
PANEL. AND COMMITTEE AND GIVE
THEM SOME HERE'S WHAT WE'VE
WORKED OUT. AND IT'S A
BENEFICIAL FOR ALL OF OUR
CONSTITUENTS. I HAVE TO ADMIT
TO YOU WHEN I BECAME A
SUPERVISOR I DON'T SPEND THE
TIME THAT THEY USED TO IN THE
INSURANCE OFFICE AS A MATTER OF
FACT I DON'T HAVE A LIFE
ANYMORE. THIS IS MY LIFE. AND
AS A RESULT. HI I WOULD LIKE TO
BRING EVEN BY A STAFF TO THE
TABLE OR SOME OTHER STAFFS
BECAUSE THEY DEAL WITH THIS
COMMUNITY THEIR ELDERLY. THERE
ON A LIMITED BUDGET AND THEY'RE
IN A MOTIONAL SHOCK IN A LOT OF
CASES MY STAFF TURN INTO BE
COUNSELORS ON THE TELEPHONE
TRYING TO KEEP THE PUBLIC FROM
A- MENTAL BREAKDOWN. TO
ENCOURAGE THEM THAT WERE
WORKING ON THEIR PROBLEMS AND
WE'RE GOING TO HELP THEM THE
BEST WE CAN WITH WHAT WE HAVE.
SO FROM YOUR POSITION IT WOULD
BE VERY BENEFICIAL MISTER
FLETCHER A THANK YOU SO MUCH
FOR YOUR PERSPECTIVE AS A- AS A
COUNTY OFFICIAL IN A NEARBY
COUNTY AS WELL AS YOUR
INSURANCE BACKGROUND. AND THANK
YOU FOR YOUR YOUR POSITIVE.
SUGGESTIONS A VERY WELL. THE
BILL A WELL REGARDED AND MUCH
APPRECIATED WE'RE A LITTLE BIT
BEHIND SCHEDULE OF THE
COMMITTEE MEMBERS SO IF THERE
NO QUESTION SOMEONE OF A BRING
UP THE FOURTH PANEL AND THE
AGAIN MISTER FLETCHER AND
MISBACH THANK YOU VERY VERY
MUCH. THIS LAST PANEL WILL BE A
PERSPECTIVE FROM THE INSURANCE.
AND ENSURE PERSPECTIVE. MR REX
FRAZIER IS WITH THE PERSONAL
INSURANCE FEDERATION OF
CALIFORNIA. WHICH INCLUDES MANY
OF THE. MAJOR INSURANCE
COMPANIES IN OUR STATE AND ALSO
MARK SECT IN. VICE PRESIDENT OF
THE AMERICAN PROPERTY CASUALTY
INSURANCE ASSOCIATION SO YOU'VE
HAD THE BENEFIT OF HEARING SOME
OF THE OF THE PREVIOUS A
PRESENTATIONS PLEASE GO AHEAD
MR FRAZIER YES SIR I HAVE A
PREPARED STATEMENT HAPPY TO
ANSWER ANY QUESTIONS THANK YOU
MISTER CHAIRMAN AND MEMBERS MY
NAME'S REX FRAZIER I'M
PRESIDENT THE PERSONAL
INSURANCE FEDERATION OF
CALIFORNIA. THANK YOU FOR THE
OPPORTUNITY TO TESTIFY TODAY
ABOUT HOMEOWNERS INSURANCE
REGULATION AND PRICING ISSUES
WITH HOMEOWNERS INSURANCE
AVAILABILITY WHICH MY COLLEAGUE
WILL ADDRESS IN GREATER DEPTH
HAVE THEIR ROOTS IN SEVERAL
REGULATORY DECISIONS AND IT'S
IMPORTANT TO IDENTIFY THE
POLICY CHOICES THAT HAVE BEEN
MADE PARTICULAR BY THE
DEPARTMENT OF INSURANCE AND
ACKNOWLEDGE THE DIRECT
CONSEQUENCES OF THOSE.
DECISIONS. AND INSURERS ABILITY
TO SERVE COMMUNITIES THREATENED
BY WILD FIRE. IS DIRECTLY
RELATED TO ITS RELATIONSHIP
WITH THE DEPARTMENT OF
INSURANCE. WHICH HAS A DUAL
ROLE. ON THE ONE HAND THE
DEPARTMENTS AND POWER TO
PREVENT EXCESSIVE RATES AND CAN
EVEN ORDER INSURERS TO REDUCE
PREVIOUSLY APPROVED RATES THAT
IT BELIEVES HAVE BECOME
EXCESSIVE OVERTIME. ON THE
OTHER HAND. THE DEPARTMENT MUST
MONITOR SOLVENCY TO ENSURE THAT
INSURERS CAN PAY CLAIMS SO THAT
THEY CAN KEEP THEIR PROMISES.
IN THIS BALANCING ACT IF THE
DEPARTMENT RESTRAINTS AND
INSURANCE RATES TO AGGRESSIVELY
THE PLACES FINANCIAL PRESSURE
ON THAT INSURER WHICH WILL THEN.
REDUCE WILL RESPOND BY REDUCING
EXPOSURE TO HIGHER RISK AREAS.
THE DEPARTMENT HAS APPROACHED
RATE REGULATION IN A MANNER
VERY DIFFERENT FROM THE REST OF
THE COUNTRY. ACCORDING TO THE
NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS AS OF
TWENTY SIXTEEN CALIFORNIA HAD
THE THIRTY SECOND HIGHEST
AVERAGE HOMEOWNERS PREMIUM IN
THE COUNTRY. AND WHEN ADJUSTED
FOR AVERAGE HOUSEHOLD INCOME
THAT NUMBER DROPPED TO FORTY
THIRD. THIS LOWER PREMIUM LEVEL
WAS A STARK CHANGE FROM SEVERAL
YEARS EARLIER WHEN INTO TWO
THOUSAND NINE CALIFORNIA HAD
THE FOURTEENTH HIGHEST AVERAGE
PREMIUM. DURING THAT PERIOD THE
AVERAGE HOMEOWNERS PREMIUM IN
THE NATION INCREASE BY A TOTAL
OF 45% WHAT CALIFORNIA'S
AVERAGE ONLY INCREASED BY EIGHT
POINT ONE PERCENT. TO PUT THAT
IN PERSPECTIVE CALIFORNIA CPI
DURING THAT PERIOD WAS 14% SO
RATES AVERAGE PREMIUM LEVELS OF
NOT EVEN KEPT UP WITH INFLATION.
HURRICANE EXPOS STATES SUCH AS
LOUISIANA AND FLORIDA NOW HAVE
AVERAGE HOMEOWNERS INSURANCE
PREMIUMS ALMOST DOUBLE THAT OF
CALIFORNIA. WELL THE ADMITTED
MARKET CARRIERS HAVE BEEN
CONCERNED ABOUT RATE INADEQUACY
LOCAL GOVERNMENT OFFICIALS AND
RESIDENTS IN HIGH RISK FIRE
AREAS HAVE VOICE THE OPPOSITE
WITH COMPLAINTS ABOUT HIGH
PRICES AND THIS IS A DISCONNECT
WORTH SIGNIFICANT CONSIDERATION.
WHILE THE GULF COAST STATES
HAVE ALREADY HAD A CLIMATE
DRIVEN INCREASE IN INSURANCE
RATES CALIFORNIA HAS NOT.
CALIFORNIA REGULATIONS NOT
REQUIRED BY STATUTE BUT CHOICES
HAD THAT HAVE BEEN MADE
CALIFORNIA REGULATIONS CONTINUE
TO PROHIBIT INSURERS FROM USING
CLIMATE CHANGE MODELING AND
PRICING. INSTEAD REQUIRING
INSURERS TO PREDICT FUTURE
LOSSES BASED UPON THE AVERAGE
OF THE LAST TWENTY YEARS OF
LOSSES. CALIFORNIA'S
RECOGNITION OF A NEW NORMAL
DOES NOT YET EXTEND TO
INSURANCE RATES. THIS CLIMATE
CHANGE RESTRICTION IS ON TOP OF
CALIFORNIA'S CONTINUED
REGULATORY PROHIBITION ON
ALLOWING INSURERS TO INCLUDE
THEIR ACTUAL COST OF
REINSURANCE AND THEIR INSURANCE
RATES. AS THE WORLD REINSURANCE
MARKET RECOGNIZES CALIFORNIA'S
CLIMATE RISK IN SEEKS HIGHER
PRICES FROM CALIFORNIA INSURERS
CALIFORNIA RATING RULES
CONTINUE THE LEGAL FICTION THAT
INSURANCE DO NOT BUY
REINSURANCE. PERCEPTION OF
CATASTROPHIC WILD FIRE RISK AS
A SECONDARY CONSIDERATION HAS
CHANGED. S. AND P. GLOBAL
RATINGS RECENTLY KNOWLEDGE THIS
CHANGE BY ADDING WILD VIRUS TO
THE LIST OF DISASTERS THE
IMPLICATE AND SURE CREDIT
WORTHINESS. WHICH HAS
PREVIOUSLY BEEN LIMITED TO ONLY
TORNADOES HURRICANES AND
EARTHQUAKE RISK. REINSURERS OF
HAD THREE YEARS IN A ROW OF
WILDFIRE LOSSES IN EXCESS OF
TEN BILLION DOLLARS DUE TO THE
CATASTROPHIC FIRES IN CANADA
AND TWENTY SIXTEEN. AND SIMILAR
FIRES IN CALIFORNIA IN TWENTY
SEVENTEEN AND EIGHTEEN. NOT
SURPRISINGLY THERE'S ALARM
AMONG RATING ANALYSTS.
REINSURERS AND PRIMARY INSURERS
ABOUT THE ADEQUACY OF WILD FIRE
RISK MODELING UNDERWRITING
PRACTICES AND RATE LEVELS. S.
AND P. RECENTLY PREDICTED THAT
REINSURANCE PRICING FOR
CALIFORNIA WILD RISK COULD RISE
303270% BETWEEN NOW AND JANUARY
TWENTY TWENTY RENEWALS. IF
CALIFORNIA ENSURE MAINTAIN
SIGNIFICANT EXPOSURE TO THIS
CATASTROPHIC RISK THEY WILL BE
EXPECTED TO PAY SIGNIFICANTLY
INCREASED REINSURANCE PREMIUMS
WHAT CALIFORNIA RULES PREVENT
THAT COST RECOVERY WE URGE
THIS COMMITTEE TO CONSIDER THE
SITUATION THE CURRENT
CALIFORNIA REINSURANCE
REGULATIONS ARE CREATING. WILD
FAR CATASTROPHE MODELS ARE
IMPROVING AND WE DO EXPECT THEM
TO CONTINUE IMPROVEMENT. AS THE
SCIENCE ADVANCES THE REST THAT
INSURERS AND REINSURERS WILL BE
UNDER UNDERESTIMATING FIRE RISK
WILL REDUCE. WHICH WILL IN TURN
REDUCE CONCERNS ABOUT ENSURE
CREDIT WERE CREDIT WORTHINESS
BUT WE HAVE LIKELY TRANSITIONED
IN OUR UNDERSTANDING OF WILD
FIRE RISK WHICH WILL NO LONGER
BE CONSIDERED A SECONDARY RISK
MOVING FORWARD. DESPITE THE LID
ON PRICING IN THE LAST DECADE
IN THE EMERGENCY OF WILD FIRE
RISK AS A CREDIT IMPACTING
CONSIDERATION. STATE WIDE
AVAILABILITY NUMBERS ARE
RELATIVELY STABLE WITH THE
DEPARTMENTS RECENT REPORT
SHOWING FROM TWENTY FIFTEEN TO
TWENTY EIGHTEEN. THAT THE
NUMBER OF NEW HOMEOWNERS
INSURANCE POLICIES ISSUED
STATEWIDE AS INCREASED ONE
POINT 8% THE NUMBER OF POLICY
HOLDER INITIATED NON RENEWALS
HAS INCREASED ONE POINT 7%
MEANING THEIR SHOPPING. WHILE
THE NUMBER OF INSURER INITIATED
NON RENEWALS HAS DECREASED
THREE POINT 9% OF THE POLICY
HOLDERS NON RENEWED BY THE
INSURERS ONLY 13% AND UP IN THE
FAIR PLAN. THESE NUMBERS EXIST
DESPITE EFFORTS OF INSURERS TO
EVALUATE THEIR BUSINESS AND
ENSURE THEY'RE NOT AIR
RESPONSIBLY OVER CONCENTRATED
TO ANY SINGLE CATASTROPHIC RISK
AREA. THIS IS ASOLVENCY RISK
OF IMPORTANCE TO INSURERS AND
THE DEPARTMENT OF LIKE. WITH
THE MOST RECET WORST CASE
SCENARIO BEING MERCED PROPERTY
IN CASUALTIES FAILURE FOLLOWING
A SINGLE FIRE. I APPRECIATE THE
OPPORTUNITY TO TALK ABOUT
REGULATION AND PRICING ISSUES
AN ALTERNATE OVER TO MY
COLLEAGUE WILL PROVIDE
ADDITIONAL INFORMATION ABOUT
AVAILABILITY ISSUES THANK YOU.
THANK YOU MISTER FRAZIER OF
OTHER ANY QUESTIONS FOR MISTER
FRAZIER ON THE DATA THAT HE HAS
PROVIDED TO US. VERY VERY
HELPFUL SIR THANK YOU FOR YOUR
CONSIDERATION. MR SEGMENT
PROVIDING WITH MARK SEGMENT A
VICE PRESIDENT OF AMERICAN
PROPERTY CASUALLY IS INSURANCE
ASSOCIATION I'M HERE TO TALK
ABOUT THE OTHER PART OF THE
EQUATION WHICH IS AVAILABILITY.
NOT RENEWALS HAS BEEN IN THE
NEWS A LOT I APPRECIATE THE
TERM AND DALY POINTING OUT THAT
THE THREE HUNDRED FIFTY
THOUSAND WAS OVER A- FOUR YEAR
PERIOD IF YOU LOOK AT THE SAME
DATA. AS REX KIND OF POINTED
OUT NEW POLICIES ARE OVER TWO
MILLION IN THAT SAME AREAS
WHICH WERE TALK ABOUT NON
RENEWAL SO IT'S IMPORTANT. TO
TRY BUT CONTACTS ON THIS MY
BOSS IS ALWAYS AFTER ME TO
PROVIDE CONTEXT MIGHT TRY TO
WHENEVER POSSIBLE. I THINK THE
OTHER THING WE NEED TO
UNDERSTAND IS AVAILABILITY AND
AFFORDABILITY ARE TWO DIFFERENT
ISSUES. I LIVE IN CHARGE IS
AVAILABLE BUT AN INDIVIDUAL
DOES NOT LIKE THE PRICE WHICH
WE CERTAINLY UNDERSTAND THE
PRICES ARE GOING UP THAT'S NOT
THE SAME THING AS NOT HAVING A
CHAIRED. CHARTS AVAILABLE TO
YOU WE NEED TO UNDERSTAND THAT
AS WE LOOK AT THE VARIOUS
ELEMENTS THAT WE USE THAT
SOMEWHAT TO JUDGE WHETHER NOT
THE VOLUNTARY MARKET IS
WORKING. OUT WE HAVE THREE
TOOLS WE HAVE THE FAIR PLAN.
YOUR TO PRESENTATION FROM THEM
THAT THEY HAVE. SOME. INCREASED
BUT NOT DRAMATIC INCREASES YOU
HEARD FROM THE SURPLUS LINES
INJURED. INDUSTRY THAT THEY
HAVE SOME INCREASE BUT NOT A
DRAMATIC INCREASE. ANOTHER TOOL
THAT WE USE IS WHETHER NOT.
HOMEOWNERS ARE UNABLE TO FIND
INSURANCE AND THEREFORE THEIR
LENDER PLACES AND CHARTS ON THE
PROPERTY TO PROTECT THE LENDER.
I KNOW HAVING HAD THIS HAPPEN
TO BE ONCE. A BY MISTAKE. ODD
THAT THE POLICIES ARE
SIGNIFICANTLY MORE EXPENSIVE. I
THE COVERAGES MARCH LESS AND IT
REALLY REALLY GETS YOUR
ATTENTION. INTERESTINGLY ENOUGH
WE HAVE NOT HEARD MUCH ABOUT
LENDER PLACED IN CHARGE OF THIS
MARKET PLACE. WHICH WOULD BE
LEAD ME TO BELIEVE THAT PEOPLE
ARE ABLE TO FIND INSURANCE
SOMEWHERE TO MAKE SURE THEY
MEET THEIR MORTGAGE
APPLICATIONS. ONE THING WE
DISCOVERED AB TALKED ABOUT THE
TREE MORTALITY TASK FORCE
INSURANCE SUBCOMMITTEE THAT WE
BOTH SERVED ON. IT WAS AS MUCH
FUN AS YOU COULD IMAGINE. ONE
OF THAT WE HAD THIS DEBATE.
CONSTANTLY ABOUT AVAILABILITY
AND AFFORDABILITY AND NOT QUITE
UNDERSTAND IT WHETHER OR NOT
INSURANCE WAS AVAILABLE A PART
OF IT CAME DOWN TO WE GET
STARTED TO UNDERSTAND THE
MARKETS AND UNDERSTAND THAT
COMPETITION IN THE MARKET AND
CONSUMERS ARE NOT ALWAYS AWARE
HOW TO SHOP FOR EXAMPLE IF YOU
HAVE A CAPTIVE AGENT AND THAT
AGENT SAYS THAT COMPANIES NO
LONGER WRITING YOU MAY BELIEVE
HOMEOWNERS INSURANCE IS NOT
AVAILABLE. BECAUSE YOU'RE USED
TO THAT RELATIONSHIP IF YOU
WORK WITH AN AGENT WHO MAY ONLY
HAVE A SMALL A COUPLE OF
APPOINTMENTS THAT MAY NOT HAVE
A BROAD PERSPECTIVE ON THE
MARKET YOU MAY NOT UNDERSTAND
THAT INSURANCE IS AVAILABLE WE
PUSH PEOPLE TO SHOP FOR
INSURANCE WE'D LIKE THEM TO
SPEND AS MUCH TIME AND WAS
STILL WATER RECTORS LIGHTS. TO
SHOP FOR INSURANCE IS A SPEND
OUT SHOPPING FOR A HAMMER ON
AMAZON. ARE THE INSURANCE THE
COMMUNITY HAS INVOLVED THAT
AFFECT LAST YEAR THERE WAS A
BILL THAT WILL CREATE A
CALIFORNIA CHURCH FINDER WITH
CONSTANT PAIN THE PEOPLE THAT
ARE HAVING A HARD TIME FINDING
INSURANCE CAN PUT THEIR
INFORMATION IN ONE PLACE.
AGENTS AND COMPANIES THAT WRITE
THAT INSURANCE WILL CONTINUE TO
FIND THAT PLACE OF THIS WAS
PILOTED ON A SMALL PROJECT
THAT'S HERE CAN'T AND PLASTER
COUNTY WHICH WE'VE FOUND OUT TO
BE VERY WORKING. INTEREST LAY
ENOUGH I WAS ACTUALLY TAX IN
WITH ONE OF OUR MEMBER
COMPANIES WHICH DOES WRITING
GRASS VALLEY THEY DO SEE
COMPETITION AND RIGHT GRASS
VALLEY SOMETIMES THEY GET
ANNOYED THAT THEY GET OUT OF
BED AND GRASS VALLEY WHICH IS
ONE OF THE AREAS THAT THE STATE
HAS IDENTIFIED AS ONE OF THE
PARTICULAR MOST VULNERABLE
COMMUNITIES THAT WE FACE. AND
JUST PLAY ENOUGH AT THE SAME
INSURANCE COMPANY THAT AT LEAST
DIVIDE WAS TALK ABOUT WORKING
WITH SO IT'S INTERESTING THAT
WOULD THAT WOULD COME ON THE
SAME DATE. SO WE JUST AS WE
MOVE FORWARD AND I THINK. THE
BILL THAT THE CHAIRS PUSHING
TODAY AND THAT SENATE JOINT
COMMITTEE TAKE SOME STEPS TO
UNDERSTAND THAT BUT WE NEED TO
MAKE SURE THAT BEFORE WE TAKE
ANY BROAD. OF STEPS THAT MAY
UPSET THE GENERAL INDUSTRY WE.
NEED TO MAKE SURE WE HAD FULLY
UNDERSTAND WHAT THE PROBLEM IS
THANK YOU. MARK A THE PILOT
PROJECT THAT YOU MENTIONED OF
WHO'S THE SPONSOR OF THAT IT'S
A GROUP THAT CAME OUT OF THE
TREE MORTALITY TASK FORCE IT'S
A GROUP CALLED WHY A COPA WHICH
IS THE VENDOR THAT DOES IT AND
IT'S CALLED SIERRA INSURANCE
FINDER. OF ED WE WERE GETTING
REPORTS WHEN THE TREE MORTALITY
TASK FORCE INSURANCE UP CAN
WILL STILL MADE AND THEN THEY
WERE FINDING PRETTY GOOD
SUCCESS WITH PEOPLE OF FINDING
INSURANCE THROUGH THAT
MECHANISM. FOR HOW MANY MONTHS
HAS THAT BEEN UNDER WAY THAT.
PROGRAM I WOULD SAY IT'S BETTER
TO HAVE PARK AT LEAST A YEAR.
GOOD THANK YOU FOR THANK YOU
FOR THAT ANY QUESTIONS FOR A
MISTER FRAZIER OR MISTER SECOND.
MR VOEPEL I HAVE JUST A COMMENT.
IN MAINLY FOR THE INSURANCE
COMMITTEE I HOLD ON I BELIEVE
FIVE OR SIX DIFFERENT INSURANCE
LICENSES BUT I'VE BEEN RETIRED
FROM THE INSURANCE BUSINESS FOR
THREE YEARS ALTHOUGH I DO RENEW
THEM AND I THINK THE THING I
BRING TO THE TABLE FOR THIS
COMMITTEE. IS SIMPLY AN
UNDERSTANDING FROM INSURANCE
COMPANIES VIEW POINT THE BROKER
VIEWPOINT AND THE CONSUMER
VIEWPOINT TRYING TO EQUALIZE
AND BALANCE THE MALL WHICH IF I
COULD EVER FIGURE THAT OUT I'D
BE PRESIDENT OF THE WORLD. NO
IT'S IT IT THANK YOU MISTER
VOEPEL IT REALLY TRULY IS
HELPFUL TO HAVE YOU ON THIS
COMMITTEE BECAUSE OF YOUR
BACKGROUND. INSURANCE IS A
COMPLICATED WORLD AS IS REAL
ESTATE AS AS ARE MANY OF THE
ASPECTS OF OUR MODERN ECONOMY
HERE. ANY OTHER QUESTIONS OR
COMMENTS BY MEMBERS OF MR
GALLAGHER. THANK YOU MISTER
CHAIRMAN I JUST WANT TO THANK
YOU AGAIN FOR ALLOWING ME TO
JOIN THE HEARING THIS MORNING I
THINK THERE'S A LOT OF GREAT
INFORMATION THAT WE HEARD FROM
ALL THE DIFFERENT PANELS. SOME
OF THE THINGS THAT CAME UP AND
IT'S SOMETHING THAT JUST SO THE
COMMITTEE KNOWS THAT I'VE HEARD
A LOT. IN TALKING WITH FOLKS OF
MY DISTRICT ONE IS THE ALI'I
ISSUE. OF THERE WERE SEVERAL
HOMES IT DIDN'T BURN DOWN RIGHT
BUT STILL HAD INFRASTRUCTURE
PROBLEMS WATER CONTAMINATION OR
SMOKE DAMAGE THAT. THAT I DID
GET COMPLAINTS FROM THOSE
CONSUMERS THAT THEY WEREN'T
ABLE TO ACCESS SALIH THEIR
THEIR INSURANCE COMPANY
LITERALLY SAID NO THAT'S IT'S
NOT FOR THIS. AND COULD NOT GET
A LEAD BECAUSE THE HOME ITSELF
WAS NOT. DAMAGED PHYSICALLY BY
THE FIRE BUT IT BUT CERTAINLY
IF YOU CAN'T GO BACK IN YOUR
HOME BECAUSE OF THOSE ISSUES.
YOU KNOW YOU WOULD THINK THAT
THAT WOULD COVER US THAT MIGHT
BE SOMETHING TO LOOK INTO THE
OTHER ONE I GOT A LOT OF THIS
IS THE DEDUCTION FOR LAND VALUE
WHEN PEOPLE ARE PURCHASING.
REPLACEMENT PROPERTY. DEBT THAT
WAS RUN INTO ISSUES WITH NOT BE
ABLE TO TRULY GET THE FULL
VALUE OF WHAT THEY PAID FOR IN
PREMIUMS. IN AND THEIR HOST
HOME BURNED DOWN YOU HAVE TO
FIND ANOTHER HOME. TO ROUTE TO
REPLACE IT SO THAT YOU KNOW
THAT WAS ALSO SOMETHING I
HEARD. AND I JUST YOU KNOW I
THINK THAT. WE'RE GONNA HAVE TO
GET SOMEWHERE ON THIS BECAUSE-
CERTAINLY I THINK THERE IS A
ROBUST MARKET OUT THERE AT THAT
BUT WE CERTAINLY HAVE A SLIVER.
OUT THERE WERE IT'S NOT SO
ROBUST AND WERE HAVING ISSUES
AND WE CAN SAY OH YEAH THERE'S
AVAILABILITY THERE'S
AVAILABILITY. AND I AND I KEEP
SAYING THIS WILL TELL ME WHO
THE COMPANIES ARE AND WHILE GET
OUT THE WORD TO MY COME TO MY
CONSTITUENTS. HEY MAN CHECK TRY
THESE COMPANIES BUT. YOU KNOW I
DON'T ALWAYS GET NAMES THEY GET
WHAT WHAT HE'S TALKING THE SAME
COMPANY WHAT COMPANY IS IT. TO
SAY WHAT COMPANY IT IS AND THEN
WE'LL GET OUT THE WORD TO
PEOPLE THAT HEY THERE ARE.
PEOPLE WRITING THESE AND THEN
AFFORDABILITY IS DEFINITELY AN
ISSUE AND- I THINK EVERYBODY
EXPECTS A YOU HAVE HIGHER RISK.
YOU DO HAVE TO PAY MORE. BUT
MAN WHEN YOU GET IN LIKE TEN
THOUSAND DOLLARS. NO PREMIUMS
THAT'S I THINK THAT'S PRETTY
ROUGH FOR ANYBODY IT TAKES OF
WE CAN FIND. SOME REFORMS THAT
ARE GOING TO HELP ADDRESS THAT
A FOR MIDDLE AFFORDABILITY
ISSUE THAT WOULD THAT WOULD BE
GREAT AND THANK YOU FOR BY THE
COMMITTEE AND THEY'VE BEEN DOWN
AS A LOT OF THESE ISSUES IN THE
LEGISLATION THAT YOU'RE
OFFERING. MISTER CHAIRMAN I
THINK IT'S GOING TO HELP WITH
WITH MANY OF THESE ISSUES THANK
YOU THANK YOU AND. PLEASE YOU
ARE ABLE TO PARTICIPATE TODAY
MISTER GALLAGHER AND- WE WILL
BE ANA WILL BE IN CONTACT ON
ALL THESE ISSUES THANKS AGAIN
MISTER FRAZIER MISTER SEGMENT
THANK YOU VERY HELPFUL
INFORMATION I THINK IT WAS A
WANT TO THANK A- OUR COMMITTEE
STAFF MARK AND PAUL. FOR
PUTTING TOGETHER A REALLY
EXCELLENT TO OF PRESENTATION
TODAY WITH VARIOUS PERSPECTIVES
SO VERY BALANCED PRESENTATION
VERY HELPFUL FACTS THANKS AGAIN
MISTER FRAZIER MINISTER SECT
AND- THIS IS AN OPPORTUNITY NOW
FOR PUBLIC COMMENT IF THERE ANY
PERSONS WHO LIKE TO COMMENT. IS
AN INFORMATION HEARING ONLY
THERE'S NO VOTES TO BE TAKEN
TODAY WERE JUST TO. JUST TRYING
TO A. DEAL IN AND HELPFUL
INFORMATION GO AHEAD PLEASE
GOOD MORNING STACEY HEAT WITH
THE WORLD COUNTY
REPRESENTATIVES OF CALIFORNIA
RC RC REPRESENTING THIRTY SEVEN
NOW MORAL COUNTIES STATEWIDE
AND AS YOU MIGHT GUESS THIS IS
A BIG ISSUE FOR OUR
CONSTITUENCIES ACROSS
CALIFORNIA WE HAVE A LOT OF THE
COUNTIES THAT ARE IN HIGH FIRE
HAZARDS VERY AREAS IN A LOT OF
THE COMMUNITIES THAT ARE.
GETTING A LOT OF THESE NON
RENEWAL NOTICES AND WE HEAR
ABOUT THIS PRETTY MUCH EVERY
DAY FROM MEMBERS OF OUR BOARD
HANNAH SUPERVISOR FLETCHER SITS
ON OUR BOARD WE PROBABLY CALL
HIM A MEMBER OF OURS AND SO I
DON'T HAVE A WHOLE LOT TO ADD
FROM BEYOND WHAT HE SAID HERE
TODAY DURING HIS TESTIMONY BUT
I WILL SAY THAT. WE FORMED A
NINE MEMBER AD HOC SUBCOMMITTEE
OF OUR BOARD TO LOOK AT THESE
INSURANCE ISSUES AND WARM
MEETING BI MONTHLY AFTER OUR
AND RC RC BOARD MEETINGS TRYING
TO SEE WHAT WE AS LOCAL
GOVERNMENTS CAN DO TO DO OUR
PART TO TRY TO HELP RESOLVE
THIS PROBLEM AND WHAT WE CAN DO
TO BE PART OF THE SOLUTION AND
WE JUST HOPE THAT. EVERYONE
THAT HAS A PART IN THIS FROM
THE INSURERS TO THE STATE TO
THE LOCAL GOVERNMENTS CAN GET
TOGETHER AND WORK ON THIS AND
ALL SEE WHAT WE CAN DO TO BE
PART OF THE PROBLEM AND NOT
JUST POINT AT ONE ANOTHER SO
THANK YOU FOR YOUR TIME TODAY
THANK YOU FOR YOUR ATTENDANCE.
THE HEARING. PLEASE GO AHEAD
SIR. HI HOW YOU DOING MY NAME
IS PHIL WHEN I'M AN INSURANCE
BROKER IN EL DORADO HILLS. I'D
SAY THE MAJORITY MY CLIENT BASE
IS REPRESENTED IN EL DORADO
COUNTY AND FIRST OFF I'D LIKE
TO SAY YOU KNOW WHAT I'M
GRATEFUL THAT WE HAVE THE FAIR
PLAN. I'VE GOT COUNTERPARTS IN
COLORADO AND SOME MORE MARKET
SIMILAR ENVIRONMENTS THAT THE
DON'T HAVE THAT OPPORTUNITY AND
THEY OR THEIR OPTION IS ONLY
GOING WITH A MINUTE. CARRIERS
IN THE SAME SCENARIO. YOU'RE
JUST KIND OF GOING FORWARD HAVE
BEEN IN THE BUSINESS ABOUT
TWENTY FIVE YEARS AND DECEMBER
WAS THE FIRST TIME I WROTE. A
FAIR PLAN POLICY. AND THIS WHEN
THE NON ON RULES STARTED COME
THROUGH FOR PEOPLE. AND I THINK
PEOPLE. IT MADE SENSE THEY WERE
SHOCKED IT MADE SENSE THEY TOOK
THINGS IN STRIDE. AND THEN ONCE
THE FOUR ONE. RATE INCREASE
HIT. ALL THE SOLUTIONS REALLY
BECAME A SUPER UNREASONABLE AND
OTHERS. TO SO I DEFINITELY
THINK THERE'S SOME FACTORS ARE
SOME OPPORTUNITIES FOR THAT FOR
THE FAIR PLANTED. TO ENHANCE
THEIR PRODUCT TO LOOK AT
DISCOUNTS RIGHT NOW THE ONLY
DISCOUNT AVAILABLE AS THE FIRE
WISE. COMMUNITY DISCOUNT WHICH
IS A 10% DISCOUNT. PARADISE WAS
ACTUALLY. CLASSIFIED IN FAR WHY
IS. A FAR WISE COMMUNITY. IN EL
DORADO COUNTY I THINK
PERSONALLY FLATS IS THE ONLY.
ONE THAT'S- BASED ON THAT SO AS
FAR AS ERRORS. OF OPPORTUNITY I
WOULD SAY DISCOUNTS WOULD BE
GREAT ANOTHER FACTOR IS THAT
PEOPLE DO TAKE MEASURES TO MAKE
THEIR HOUSE MORE FIRE SAFE YOU
KNOW THE TERM HARDENING HOME
RATHER. STEPS ON THERE'S NO
DISCOUNT FOR ANY OF THAT THOSE
EFFORTS. ON IT ACTUALLY COST
MORE YOUR INSURANCE COSTS MORE
BECAUSE YOU'RE YOU'RE
INCREASING REPLACEMENT COST. SO
THE SO THE COST TO REPLACE YOUR
HOME WOULD BE MORE SO. THERE'S
DEFINITELY SOME AREAS WHERE I
DON'T THINK WE'RE FOR IN THE
SHORT TERM THERE COULD BE SOME
THINGS THAT COULD BE LOOKED AT
TO MAKE THINGS MORE REASONABLE.
FOR CONSUMERS IT IT'S BEEN.
REALLY SHOCKING TO SEE IT YOU
KNOW EVEN IN CASES WHERE. THE
FIRE HYDRANT IS. JUST A FOOT
PASSED A THOUSAND FEET FROM
THEIR HOUSE THAT COMMUNITY
FRIENDS OF A THREE THOUSAND
DOLLAR PREMIUM DIFFERENCE
LITERALLY BECAUSE THE FIRE
HYDRANTS. JUST NOT ONE FOOT
CLOSER AND SIMILAR WITH THE
FIRE THE FIRE STATION SITUATION
IT'S A BIG ISSUE THERE'S- YOUR
I KNOW IN ELDORADO COUNTY
THERE'S FIVE THERE'S A FEW
CASES WHERE THE FIRE HAD FIRE
STATIONS. ARE NOT CONSIDERED
MAN FULL TIME. THE MANDARIN THE
FIRE SEASON WHERE MATTERS THE
NOT MANNED DURING THE SNOW YOU
KNOW MONTHS BUT THEY'RE NOT
ELDRED SO THAT AGAIN THAT'S A-
ABOUT A THREE THOUSAND DOLLAR
IMPACT THEIR PREMIUM. BECAUSE
THE FIRE STATION THAT'S DOWN
THE STREET IS CONSIDERED MAN SO
THERE'S JUST SOME THINGS ON THE
SHORT TERM THE CAN WE LOOK AT
THE COULD DEFINITELY. MOVE THE
NEEDLE MAKING THINGS MORE
REASONABLE FOR PEOPLE BY AND
LARGE YOU KNOW I WOULD SAIL
DRAW COUNTY FOLKS ARE. WORK
VERY HARD TO KEEP THE PROPERTY
SAFE AND CLEAR THEY DON'T ARGUE
ABOUT THAT THEY ARE. SMART IN
THAT RESPECT AND THEY THERE'D
ABSOLUTELY DEVASTATED BY THESE
INCREASES AND WE HAVEN'T SEEN A
FULL TERM OF THIS IS REALLY
STARTED TO HIT HEAVY. IN
DECEMBER AND ONCE A FULL CYCLE
HITS. ON. YOU KNOW WE'RE REALLY
GONNA SEE DIFFERENCE I OFFER
FIVE THE DAC. CARRIER SO I AM
ABLE TO. ACCORD ABOUT THIRTY
POLICIES A DAY AND IN A LOOK AT
EVERY SINGLE CENTER THAT'S
AVAILABLE EVEN ADMITTED
CARRIERS. WITHOUT HAVING TO GO
TO THE FAIR PLAN. ON THOSE KIND
OF BOILS DOWN TO THE SAME. CAN
THE SAME PACKAGE AND ANY HOUSE
THAT'S ALL THAT'S ALL I HAVE TO
SAVE I THINK THERE'S SOME
THINGS THAT YOU WITH IF THE-
THAT. THEY'RE OPEN FOR DIALOGUE
THERE'S DEFINITELY SOME THINGS
IN THE SHORT TERM THE COULD
MOVE THE NEEDLE FOR THE
CONSUMERS THANK YOU SO MUCH FOR
YOUR ATTENDANCE TODAY AND FOR
YOUR PERSPECTIVE AS AN
INSURANCE AGENT. FOR SHOULD.
THANK YOU. GO AHEAD SIR. JOHN
NORWOOD ON BEHALF OF THE
INDEPENDENT. INSURANCE AGENTS
AND BROKERS. OF CALIFORNIA AND-
I JUST WANT TO COMMENT A LITTLE
BIT FROM THE- AGENT BROKER FOR
SPECTRUM I APPRECIATE THIS.
THESE COMMENTS HERE. YOU ALWAYS
HEAR ABOUT THE FACT THAT LACK
OF HOMEOWNERS INSURANCE. IS
CAUSING. ISSUES IN THE REAL
ESTATE BUSINESS WALL. FOR OUR
MEMBERS THEIR LIVELIHOOD IS
SELLING INSURANCE SO IT'S A BIG
DEAL FOR THEM AS WELL. THERE
WERE I JUST WANT TO ASSURE YOU
THAT THEY'RE WORKING HARD. NOT
ONLY IS INDIVIDUALS TO TAKE
CARE OF THEIR- OWN BUSINESSES
AND THEIR CUSTOMERS. BUT
THEY'RE WORKING WITH YOUR TRADE
ASSOCIATION TO REACH OUT FOR.
ADDITIONAL EDUCATION PROGRAMS I
THINK. MANY OF OUR MEMBERS THE
FIRST TIME THEY'VE EVER WRITTEN
A FAIR PLAN POLICY. SO THEY'RE
LEARNING THAT AS WELL. I'M
GETTING. MORE FAMILIAR WITH
THE- NOT A BIT MARKET WITH
INSURANCE WHOLESALERS. WHAT'S
OUR MEMBERS BELONG TO
CONSOLIDATORS. NOW DO. SO THEY
HAVE MORE VOLUME DAHLE FOR
CARRIERS. SO IN OUR BUSINESS IS
WORKING REALLY HARD. AT IT
THERE'S STILL A LOT TO LEARN
AND- THIS IS GOING TO BE
AWHILE. THANK YOU. THANK YOU.
MISTER NORWOOD AND BY THE WAY A
LITTLE BIRDIE TOLD ME THAT. TO
YOUR NEW GRANDFATHER SO
CONGRATULATIONS. GRADUATION.
ALL RIGHT IF THERE ARE NO
FURTHER PUBLIC OLD. GO AHEAD.
HI MY NAME'S I LEARNED
HERNANDEZ I'M FROM POSSIBLE IN
EL DORADO COUNTY AND I'M WITH
THE DEMOCRATIC PARTY CENTRAL
COMMITTEE AND I'LL TRY TO
COUNTY TO PUT THIS IN
PERSPECTIVE ANYTHING BECAUSE
POLITICAL OFFICIALS YOU
UNDERSTAND THIS THIS ISSUE IS
AFFECTING OUR COMMUNITY SO MUCH
THAT WE HAVE FORMED A BAG
BIPARTISAN COALITION THAT HAS
NEVER EXISTED BEFORE SO ARE
REPUBLICAN CENTRAL COMMITTEE IN
CHAIR AND DEMOCRATIC CENTRAL
COMMITTEE CHAIR. AND OUR
CHAMBER OF COMMERCE AND OUR EL
DORADO COUNTY ASSOCIATION OF
REALTORS HAVE FORMED A
STAKEHOLDER WORKGROUP IN OUR
LETTER WILL BE PRESENTED
FORMALLY ANNOUNCING THIS THIS
WEEK BUT COME TO THE TABLE AND
SIT DOWN TO SAY LET'S WORK
TOGETHER AND LET'S FIND COMMON
GROUND AND THAT HASN'T HAPPENED
IN THE HISTORY OF OUR. OF OUR
COMMITTEES EXISTING SO GOOD FOR
YOU FOR YOU THINK YOU AND WE
WERE IN ARE YOU ON THAT ON
THAT. I AM YES NO I AM SURE OF
OUR POLICY COMMITTEE AND SO
THAT'S WHY WE'RE HERE TODAY. I
WOULD ENCOURAGE THIS COMMITTEE.
POSSIBLY TO EXPORT LOOKING AT A
I DON'T KNOW IF IT'S AN OPTION
BUT FIELD HEARINGS. WITHIN THE
COMMUNITY. I DILIGENTLY TRACK
WHAT'S GOING ON HERE ARE AND
LEARNING TO AT THE LEGISLATURE
BUT MOST PEOPLE IN THE
COMMUNITY ARE AWARE OF THIS AND
THERE I THINK THAT. THAT'S
REALLY IMPORTANT TO HAVE THAT
COMMUNITY PERSPECTIVE AND MAKE
SURE THAT PEOPLE ARE AT THE
TABLE WE ARE VERY ENCOURAGED.
AND IT'S SOMETHING WE ADVOCATED
FOR THE DEPARTMENT OF INSURANCE
IN THE COMMISSIONER WHO HAS.
STARTED COMING OUT TO THE
COMMUNITIES AND MEETING WITH
THE LOCAL GOVERNMENTS AND
STAKEHOLDERS AND THAT'S REALLY
IMPORTANT STEP BUT I THINK IT'S
A LEGISLATURE THEY HAVEN'T BEEN
DIRECTLY PART OF THAT I'M GLAD
TO SEE THE TESTIMONY. THAT THE
DEPARTMENT OF INSURANCE
PRESENTED TODAY ARTICULATES
WHAT THEY'RE HEARING ON THE
GROUND BECAUSE I THINK THAT
THAT'S REALLY IMPORTANT THIS IS
A- THIS IS A PEOPLE ISSUE WE
ARE ONE CALIFORNIA AND- WHILE
YOU MAY HEAR THAT. THE MARKET
OVERALL IS HEALTHY WELL IT IS
INDEED WE CALL IT A CRISIS WERE
WERE THERE. THIS IS AFFECTING
LIVELIHOODS OF PEOPLE AND WE'RE
ALSO CONCERNED ABOUT THOSE WHO.
THEY TALK ABOUT THE MORTGAGE
COVERAGE OF THE MORTGAGE
REQUIREMENT WHILE WE LIVE IN A
AS AN ELDERLY POPULATION AND
PEOPLE ARE JUST GOING TO THAT
POINT IN. LIFE WHETHER IT WILL
TO. FINALLY PERHAPS OFF THEIR
LOANS AND NOW HAVE TO TAKE OUT
ADDITIONAL. LOANS JUST TO BE
FOR SURE IT'S. AND THIS IS
THESE ARE. PEOPLE LIVING
GLAMOROUS LIVES AND SUPER
EXPENSIVE HOMES THESE ARE
PEOPLE LIKE MY PARENTS WHO. ARE
COUNTING EMPLOYEES MIDDLE CLASS
FAMILIES WHO OF WORKS THEIR
WHOLE LIVES TO PAY OFF THIS
ASSET TO NOW FIND OUT THAT THE-
COULD GET DROPPED FROM THEIR
INSURANCE WHERE THEY WERE
PAYING AROUND TWENTY FIVE
HUNDRED DOLLARS A YEAR FOR.
NEVER MADE A CLAIM ON THEIR
POLICY OVER THIRTY FIVE YEARS
AND NOW THEIR ONLY OPTION IS.
NEARLY NINE THOUSAND DOLLARS A
YEAR BACK SIGNIFICANT FOR
SOMEONE WHO'S JUST GETTING
READY TO RETIRE. ANY MIDDLE
CLASS FAMILY WHO IS PLANNED AND
DONE EVERYTHING THEY CAN NOW
HAS EIGHT HUNDRED DOLLARS ON A
MONTH IN INSURANCE PREMIUMS TO
PAY SO. THANK YOU FOR YOUR
PARTICIPATION TODAY AND FOR
YOUR ATTENDANCE I WOULD
ENCOURAGE YOU. OF YOUR TASK
FORCE TO LOOP IN YOUR STATE
ASSEMBLY MEMBER IN YOUR STATE
SENATOR THAT'LL. CREATE A
DIRECT PIPELINE THAN INTO OUR
OUR OUR LEGISLATURE THANK YOU
YES THANK YOU WE HAVE DONE THAT
AND SOME OF THEM IN BIGELOW AND
ASSEMBLYMAN KILEY ARE ARE
PERFECT REPRESENTATIVES
UNFORTUNATELY HE LEFT ALREADY I
WAS TRYING TO GET ANOTHER COPY
OF A LETTER TO HIM BUT WE ALSO
SEE SEE THAT YUPPIE OF THE
LETTER TO YOUR COMMITTEE RIGHT
THANK YOU VERY VERY MUCH FOR
YOUR PARTICIPATION WE NEED TO
VOTE REAL QUICKLY TO GIVE MR
KANSEN CHU. THE CHANCE TO VOTE
ON THE BILL THAT WAS PRESENTED
EARLIER ON EIGHT. EIGHT TO
NINETY FIVE. CHIU I'D- TWELVE
TO ZERO THANK YOU MISTER TO
APPRECIATE IT. AND IF THERE ARE
NO FURTHER PUBLIC COMMENTS THIS
HEARING IS CLOSED THANK YOU