GOOD MORNING. WE'RE GOING TO GET
STARTED. NOW. WELCOME,
EVERYBODY. UM WE'RE PLEASED TO
HAVE YOU AT THE JOINT
INFORMATIONAL HEARING OF THE
ASSEMBLY INSURANCE COMMITTEE AND
THE SELECT COMMITTEE ON WILDFIRE
PREVENTION. AT THIS HEARING, WE
WILL BE FOCUSING ON WILDFIRE
RISK. RESILIENCY AND WHETHER
THESE TWO FACTORS CAN HELP LEAD
TO THE INSURANCE MARKET
RECOVERY. WE KNOW THESE TWO
FACTORS ALONE WON'T SOLVE THE
INSURANCE CRISIS. BUT WE WOULD
LIKE TO ARE MORE CONSUMERS WITH
INFORMATION ON HOW THEY CAN
PARTICIPATE AND REDUCING
WILDFIRE RISK, WHILE ALSO
PERHAPS INCREASING THE
LIKELIHOOD OF GETTING COVERAGE.
WE'RE HEARING OF MORE AND MORE
HOME OWNERS. GOING NAKED, WHICH
IS AN INSURANCE TERM, DESCRIBING
WHEN A HOMEOWNER DECIDES TO
CARRY NO INSURANCE COVERAGE.
THIS EXPOSES OUR CONSUMERS MOST
CHERISHED ASSET. THEIR HOME AND
IT BENEFITS NO ONE, INCLUDING
INSURERS. PREVIOUS HEARINGS HAVE
FOCUSED ON THE INSTABILITY OF
THE INSURANCE MARKET. AND WHAT
INSURANCE OBSTACLES THIS STATE
FACES. TODAY WE'D LIKE TO LEARN
WHETHER MITIGATION IS WORKING TO
REDUCE WILDFIRE RISK AND HOW
MITIGATION IS VIEWED IN THE EYES
OF AN INSURER. WITH ME TODAY IS
THE CHAIR OF THE SELECT
COMMITTEE ON WILDFIRE PREVENTION
AS SOME WOMEN CONNOLLY AND
ASSEMBLYMEMBER'S WOULD WHO
REPRESENTS THE ASSEMBLY DISTRICT
WOULD LIKE TO PROVIDE BOTH OF
THEM AN OPPORTUNITY TO MAKE
OPENING REMARKS. THANK YOU.
CHAIR CALDERON. GET AFTERNOON,
EVERYONE DOCTOR WOULD AND I
WELCOME YOU AND OUR PANELISTS TO
THE BEAUTIFUL NORTH BAY. AND
APPRECIATE YOUR LEADERSHIP ON
THIS IMPORTANT ISSUE. I ALSO
WANT TO THANK OUR PANELISTS FOR
BEING HERE TODAY AND MEMBERS OF
OUR COMMUNITY WHO ARE MOST
AFFECTED BY HOME INSURANCE
ISSUES AND ARE ON THE FRONT
LINES OF THE WILDFIRE CRISIS.
WHEN I WAS FIRST ELECTED TO THE
STATE ASSEMBLY LAST YEAR, I WAS
SURPRISED TO FIND THAT THERE
WERE NO COMMITTEES THAT
SPECIFICALLY FOCUSED OR ADDRESS
THE ISSUE OF WILDFIRE
PREVENTION. I'M PROUD THAT ONE
OF MY FIRST ACCOMPLISHMENTS AS
THE NORTH BAY'S REPRESENTATIVE
IN SACRAMENTO WAS GETTING THE
SELECT COMMITTEE ON WILDFIRE
PREVENTION CREATED FOR THE FIRST
TIME. PARTNERING WITH CHAIR
CALDERON AND THE ASSEMBLY
INSURANCE COMMITTEE. IT IS OUR
GOAL TO ENSURE THAT FUTURE
ACTIONS AIMED AT STABILIZING THE
MARKETPLACE AND EXPANDING
COVERAGE FOR HOMEOWNERS ARE DONE
SO WITH INPUT AND COLLABORATION
FROM STAKEHOLDERS AND MEMBERS OF
THE COMMUNITY. WITH THE
GOVERNOR'S RECENT EXECUTIVE
ORDER AND THE RELEASE IT RELEASE
OF COMMISSIONER LAURA'S
SUSTAINABLE INSURANCE STRATEGY.
I LIKE FORWARD TO HEARING FROM
OUR PANELISTS TO IDENTIFY BEST
PRACTICES AND IMPLEMENTATION
STRATEGIES SO THAT WE CAN
SUCCESSFULLY ACCOMPLISHED THE
GOALS IDENTIFIED IN THESE PLANS.
WITH THAT IT IS MY PLEASURE TO
INTRODUCE DOCTOR WOULD MY
NEIGHBORING ASSEMBLYMEMBER'S
REPRESENTING THE AMAZING SECOND
DISTRICT. THANK YOU. OKAY HERE
WE GO. I WAS LIKE I USED TO SIT
UP HERE WHEN I WAS DOING
BUSINESS WITH THE CITY OF
HEALDSBURG, AND I STILL CAN'T
FIGURE OUT MICROPHONES. BUT
FIRST OF ALL, THANK YOU TO OUR
COMMITTEE CHAIR INSURANCE
COMMITTEE CHAIR CALLED AROUND
AND OUR SELECT COMMITTEE CHAIR
CONNELLY FOR BEING HERE. WELCOME
TO MY WORLD. OUR WORLD, ACTUALLY
, DAMON. UM UH AND YOU WOULDN'T
KNOW IT BY LOOKING AT THE
WEATHER TODAY, BUT, UM AT 8 43 P
9 43 PM ON OCTOBER 8TH 2017 WAS
THE BEGINNING OF THE TUBBS FIRE.
AND IF WE IF WE WERE REWIND TO
OCTOBER 9TH, WHAT YOU WOULD HAVE
SEEN WAS A PALL OF SMOKE HERE
AND THE HILLS ON FIRE IN MANY
PLACES STILL SO THIS IS, UM I
KNOW WE DIDN'T PLAN THIS
PARTICULAR DATE, BUT IT IS
IRONIC AND THEN AND LOOKING AT
THE WEATHER TODAY. YOU'D NEVER
KNOW THAT THIS THIS WOULD HAVE
HAPPENED, BUT BUT I WANT TO
THANK YOU FOR THE OPPORTUNITY TO
BE HERE. THIS IS THE FIRST OF
MULTIPLE HEARINGS AND SO WHAT WE
DON'T COVER TODAY OBVIOUSLY WILL
CONTINUE BECAUSE THIS IS A VERY
LARGE TOPIC SO THE PEOPLE I
REPRESENT IN SONOMA COUNTY,
MENDOCINE, Ó, TRINITY AND
HUMBOLDT AND DEL NORTE COUNTIES
ARE WELL VERSED IN THE RISK OF
WILDFIRES. WE'VE EXPERIENCED THE
LACK OF ACCESS TO AFFORDABLE
INSURANCE AND KNOW VERY WELL HOW
TO MAKE OUR HOME SAFE AS
POSSIBLE FROM FROM WILDFIRES,
AND I KNOW THERE ARE PEOPLE IN
THE AUDIENCE HERE TODAY WHO FEEL
THAT WAY AS WELL. WE'VE INVESTED
THOUSANDS OF DOLLARS HUNDREDS OF
HOURS PROTECTING HOMES YET
CONTINUE TO BE CANCELED WITH A
NON RENEWED, UH, FORCED INTO THE
EXPENSIVE AND LIMITED POLICIES
OF THE FAIR PLAN. THE TRIPLE AND
QUADRUPLE COST OF FAIR PLAN.
POLICIES HAVE HIT THEM HARD,
ESPECIALLY THOSE WHO ARE ON
FIXED INCOMES. PEOPLE HAVE LOST
THEIR HOMES AND IN THE CASE OF
THE WINE COUNTRY FIRES THEIR
LOVED ONES. UM, AND SOME, UM AND
YOU ACTUALLY, YOU KNOW ME TOO. A
LITTLE EXTENT. SUFFER A LITTLE
BIT OF PTSD EVERY TIME WE SMELL
SMOKE AROUND HERE. UM SO I'VE
ONLY I'VE BEEN FORTUNATE TO HAVE
ONLY BEEN EVACUATED FROM MY HOME
A COUPLE OF TIMES, UM, NEVER HAD
A LOSS, BUT THE GRIM REALITY OF
WHAT WE EXPERIENCED HERE. THE
LOSS OF 22 LIVES IN IN THIS
COUNTY, ALONG WITH ANOTHER 20
PLUS IN NEIGHBORING COUNTIES
AFTER THE TUBBS FIRE HAVE
BROUGHT THIS INTO A REAL REAL
FEAR FOR US IN THE LONG RUN. SO
WE'VE BEEN LIVING WITH THE SAME
RIGHT AS WE LOOK AT CANCELATIONS
OF SPREAD INTO LESS OBVIOUS
NEIGHBORHOODS, THE SUBURBS.
WE'RE HEARING PEOPLE'S WORRY
ABOUT WINNING WHEN AN ENVELOPE
FROM THEIR INSURER IS GOING TO
SHOW UP IN THEIR MAILBOX, SO
WE'VE BEEN LIVING WITH THE SAME
REGULATIONS DEVELOPED IN THE 19
EIGHTIES, AND IT'S NO LONGER THE
19 EIGHTIES, AND I BELIEVE THAT
MANY OF THE CURRENT REGULATORY
CONSTRAINTS ON INSURERS NO
LONGER APPLY. SO THE NIGHT UH TO
THE 19 EIGHTIES AND EVERY
CALIFORNIANS LONG TERM BEST
INTERESTS WE NEED TO CONSIDER
WHAT CAN BE DONE TO CREATE A
SUSTAINABLE FAIR AND COMPETITIVE
INSURANCE MARKET FOR THE
ENVIRONMENT WE LIVE IN TODAY. AH
LOOK FORWARD TO THE CONVERSATION
TODAY, BUT WE'LL EMPHASIZE THAT
THIS IS THIS THE FIRST OF
MULTIPLE HEARINGS HERE AS WE
DELVE INTO THIS REALLY, REALLY
DEEP TOPICS, SO AND WE HAVE ONE
IN THE MORNING. THANK YOU.
SOMEONE MEMBER WOULD ALSO LIKE
TO WELCOME MY COLLEAGUE,
ASSEMBLYWOMAN DIANE PAPIN. IF
YOU WANT TO SAY HI OR COMMENTS.
OH, NO, I'M JUST DELIGHTED TO BE
HERE. I WON'T TAKE IT FURTHER
TIME, OTHER THAN TO SAY THAT MY
SHAKE ROOF WAS TORN OFF THIS
MORNING. SO I'M HERE OF LIVING
PROOF OF WHAT WE'RE DOING TO
PERHAPS FORTIFY OUR PROPERTIES.
BUT THAT'S NOT THE ONLY REASON
WHY I'M HERE. I PROMISE. IT'S
NOT ALL ABOUT ME. THANK YOU
SIMILAR WOMAN AND WE HAVE
ANOTHER COLLEAGUE WHO WILL BE
JOINING US IN A LITTLE BIT.
ASSEMBLYMAN FREDDY RODRIGUEZ. SO
NOW LET'S GO AHEAD AND BRING UP
OUR FIRST PANEL. THIS PANEL WILL
BE FOCUSED ON THE QUESTION OF
HOW RISKY ARE CALIFORNIA
WILDFIRES AND ON THIS PANEL, WE
HAVE MISSED DR BRANDON COLLINS.
ASSOCIATE ADJUNCT PROFESSOR AT
THE DEPARTMENT OF ENVIRONMENTAL
SCIENCE AND POLICY AND
MANAGEMENT AND LEAD SCIENTIST
FOR BERKELEY FOR US AT UC
BERKELEY. AND WE ALSO HAVE DAVE
WHITAKER, FIRE CHIEF AT THE
MORAGA ORINDA FIRE DISTRICT.
WELCOME HI, EVERYBODY. UM THANKS
FOR HAVING ME. I'VE AYE. NOT
SURE I'M PROBABLY GONNA TAKE IT
PRETTY BROAD PERSPECTIVE ON
THIS. I THINK YOU PROBABLY HAVE
SOME BETTER IDEAS WITH SPECIFIC,
YOU KNOW, UM, APPLICATION TO THE
INSURANCE, BUT I WANT TO TALK
MORE BROADLY ABOUT BONFIRE IN
THE STATE, AND I'M GOING TO
START WITH THIS. THIS PICTURE,
UM, WHICH IS OF A PLUME FROM A
WILDFIRE THAT WAS IN THE
SOUTHERN SIERRA NEVADA. THIS WAS
THE CREEK FIRE IN THE YEAR 2020.
AND IT HAPPENED SORT OF OUTSIDE
OF SHAVER LAKE BURNED UP, YOU
KNOW, 300,000 SOMETHING MAKERS
AND LOTS OF HOMES AND IN THE
WAKE OF IT. BUT I THINK WHAT I
WANTED TO EMPHASIZE HERE IS THAT
A LOT OF PEOPLE SEE THIS, UM
ANOTHER IMAGES LIKE THIS. YOU
KNOW WHERE YOU YOU SEE SMOKE OR
YOU SEE, YOU KNOW A HILLSIDE ON
FIRE. AND WHEN YOU COUPLE THAT,
WITH SORT OF THE RECENT NATURE
OF IT, YOU ASSUME RIGHT AWAY
THAT THERE IS SOME UM THAT THAT
THIS IS REALLY A CLIMATE DRIVEN
PHENOMENON THAT THAT THE ONLY
THING THAT EXPLAINS THE SIZE OF
FIRES THE NUMBER OF FIRES IS
THAT THE CLIMATE IS CHANGING,
AND THEREFORE, YOU KNOW, WE
CAN'T REALLY DO A WHOLE LOT TO
MITIGATE AND SAD. AND I WANT TO
JUST, YOU KNOW, SORT OF PUSH
BACK ON THAT A LITTLE BIT. I
DON'T I'M NOT GOING TO SIT HERE
AND DENY THAT THE CLIMATE IS A
PLAYER FOR SURE. BUT I THINK
THERE'S OTHER FACTORS AT RISK,
TOO. SO THIS FIRE WAS WAS WAS
UNIQUE. BUT THERE ARE OTHERS
THAT WE'VE SEEN THAT HAVE KIND
OF DONE SOMETHING ELSE. MAYBE
THAT ECLIPSE THIS FIRE, BUT IT
HAD SUCH INCREDIBLE GROWTH. UM
ASSOCIATED WITH THAT PLUME ON
THAT ONE PARTICULAR DAY, YOU CAN
SEE THAT IN THE RED IN THE
CENTER WHERE IT GREW. YOU KNOW,
ALMOST, YOU KNOW, 50, OR 60,000
ACRES IN A DAY HAD A PLUME
HEIGHT OF ABOUT 50,000 FT, AND
IT JUST LOOKS INCREDIBLY
OMINOUS. BUT WHAT YOU WHAT? IF
YOU IF YOU KNEW WHAT THAT FIRE
WAS BURNING THROUGH, IT SORT OF
LOOKED A LOT OF IT LOOKED LIKE
THIS PICTURE. UM, WHERE THAT WAS
SORT OF GROUND ZERO FOR THE TREE
MORTALITY WE SAW IN THE DROUGHT
THAT WAS GOING ON 2012 THROUGH
2016 AND EVEN AS QUICKLY AS AS
THIS PICTURE WAS TAKEN, AND
MAYBE 2015 AND THERESA ARE
ALREADY FALLING DOWN. THERESA
DIED EARLY ON IN THAT DROUGHT.
SO WHEN YOU HAVE, YOU KNOW A
FUEL LOAD LIKE THIS, YOU HAVE
THIS MUCH MATERIAL THAT IS DEAD
, UM, DOWN ON THE GROUND, AND IN
THE BEGINNING THAT PROCESS OF
DRYING OUT IN SOME CASES IT HAS
BEEN DRYING OUT FOR A COUPLE OF
YEARS. IT'S AN INCREDIBLY
VOLATILE SITUATION. UM FROM THE
STANDPOINT OF WHAT WILDFIRE CAN
DO, AND IF YOU HAVE ENOUGH OF IT
OVER A LARGE ENOUGH AREA, YOU
CAN START TO CONTRIBUTE TO THAT
TYPE OF BEHAVIOR. THAT PLUME
THAT I SHOWED A PICTURE OF AND
THAT THE DIFFICULT THING ABOUT
IT IS THAT WE DON'T HAVE THE
CAPABILITY TO MODEL THAT TYPE OF
BEHAVIOR. IT'S WE'RE STILL SORT
OF RELY ON ON TECHNOLOGY. THAT
WAS MAYBE 40 50 YEARS OLD, WHICH
WE'VE ADDED SOME BELLS AND
WHISTLES TO BUT WE STILL DON'T
ACTUALLY FUNDAMENTALLY MODEL THE
COMBUSTION OF THIS MATERIAL, AND
THEN HOW THEY KIND OF COALESCED
TO CREATE SOMETHING LIKE WHAT WE
SAW IN THE CREEK FIRE. WE SAW IT
AGAIN. THE CREEK FIRE IS NOT
UNIQUE, AND WE'VE SEEN IT IN
MANY OTHERS. THIS IS THE DIXIE
FIRE AND SAME KIND OF THING.
PLUME DOMINATED BEHAVIOR AND
WHAT YOU WHAT ONE OF THE
HALLMARKS OF SORT OF THE PLUME
TYPE OF CONDITION IS THAT IT IS
VERY MUCH FUELS DRIVEN. NOW, YOU
YOU CAN'T SIT THERE AND ASSUME
THAT THAT CLIMATE DOESN'T HAVE A
ROLE CLIMATE ACTUALLY PUTS THOSE
FUELS IN A DRY ENOUGH STATE
WHERE THEY'RE VERY AVAILABLE. TO
BURN, BUT INHERENTLY, THAT IS A
FUEL SIGNATURE. AND IN THE
AFTERMATH OF THAT, YOU KNOW IT'S
NOT JUST ABOUT THE NUMBER OF
ACRES BURNED OR IN MY CASE, THE
NUMBER OF HOMES TO ME IT'S
REALLY ABOUT THE ACTUAL EFFECTS
OF THE FIRE ON THE GROUND, AND
IN THIS PARTICULAR CASE, THE
MORTALITY OF TREES OVER GIANT
SCALES. WE'RE TALKING ABOUT
THOUSANDS OF ACRES THAT ARE
TREELESS AND DON'T REALLY HAVE
UM, A NATURAL MECHANISM FOR
REGENERATING FOLLOWING THAT TYPE
OF FIRE. THIS IS COMPLETELY
UNNATURAL FIRE FOR THESE
FORESTS. AND THIS IS PART OF A
TREND. YOU PROBABLY ALL KNOW IT.
THAT WE'VE SEEN THIS UPTICK, UM
IN THE THIS AREA BURN IN
PARTICULAR AREA BURNED AT HIGH
SEVERITY WHERE THE TREES ARE
KILLED. UM YOU KNOW THE OR
WHATEVER DOMINANT VEGETATION IT
IS. IT COULD BE CHAPERONED BUT
IS KILLED AND KILLED IN LARGE
PATCHES, AND YOU CAN SEE JUST BY
SOME OF THE SPIKING TOWARDS THE
LATTER PART OF THIS. THIS BAR
GRAPH THAT IT SEEMS TO BECOMING
A LITTLE MORE MORE FREQUENTLY
NOW, AND I WOULD IMAGINE. THAT
THERE IS ABSOLUTELY A CLIMATE
SIGNAL IN THERE, BUT A CLIMATE
SIGNAL MAKING FUEL MORE
AVAILABLE TO BURN IF YOU CAN
THINK OF IT THAT WAY, AND SO
WHAT? WHY WHY ARE WE SEEING THIS
? UM WELL, WE HAVE A LEGACY IN
OUR FORESTS OF CHANGING THE
STRUCTURE OF THEM, UM, SUCH THAT
THEY ARE BURNING VERY
DIFFERENTLY THAN THEY EVER DID.
HISTORICALLY, WE'VE PUT OUT
FIRES. FOR 100, PLUS YEARS IN
MANY PLACES AND BEEN VERY
EFFECTIVE AT IT. WE'VE ALSO
REMOVED INTENTIONAL IGNITIONS. A
LOT OF THEM ARE INDIGENOUS,
BASED FOR ACTUALLY CHANGING THE
STRUCTURE OF THE FOREST SO THAT
THEY DIDN'T BURN IN VERY SEVERE
EVENTS, BUT ALSO SO THAT THEY
COULD CULTIVATE CERTAIN
AMENITIES FROM THE FOREST
THEMSELVES. WE'VE ALSO CUT FROM
OUR OUR TREES. WE'VE WE'VE CUT
FROM OUR FOREST IN PARTICULAR
CUT LARGE TREES. THOSE TREES ARE
ARE GENERALLY THE MOST FIRE
RESISTANT TREES. AND AS A RESULT
NOW WE HAVE SMALLER TREES THAT
ARE MORE VULNERABLE TO FIRE. AND
SO YOU KNOW, WE HAVE THIS LEGACY
THAT WE KIND OF HAVE TO DEAL
WITH. AND WE CAN'T PRETEND THAT
THAT'S NOT SOMETHING THAT THAT
THAT WE'VE WE'VE CHANGED AND
CHANGING A DRASTIC WAY. RIGHT
WE'VE WE'VE IN MANY CASES FIVE
TIMES, 10 TIMES THE AMOUNT OF
TREES THAT ARE OUT THERE IN THE
FOREST, AND THERE WERE
HISTORICALLY BEFORE WE STARTED
DOING SOME OF THESE
MANIPULATIONS. AND SO JUST IF
YOU'RE LOOKING AT IT SORT OF AT
AT THE GROUND LEVEL. UM AS THIS
, THIS PHOTOGRAPH SORT OF
DEPICTS ONE. WE'VE REMOVED A
NATURAL PROCESS FROM THESE
FORESTS. THAT IS, THAT IS FIRE
THAT WOULD COME VERY FREQUENTLY.
OFTENTIMES EVERY 10 YEARS, MAYBE
EVEN LESS, IN SOME CASES THAT
WAS CONSTANTLY CONSUMING FUEL
THAT WAS BEING GENERATED EVERY
YEAR. TREES ARE DROPPING NEEDLES
DROPPING BRANCHES. UM YOU KNOW,
SO THAT'S FUEL THAT IS JUST
GOING GOING GOING. AND THEN THE
ONLY THING THAT WAS TAKING IT
OUT WAS FIRE. WE'VE WE'VE KIND
OF CHANGED THAT NOT KIND OF WE,
WE'VE REALLY CHANGED THAT. AND
SO THERE'S NOTHING ELSE GOING
ON. BUT MAYBE SOME
DECOMPOSITION, BUT OTHERWISE
WE'RE PRETTY MUCH JUST
ACCUMULATING FUELS ON THE GROUND
. WE'VE ALSO BY BY REMOVING FIRE
HAVE ALLOWED THESE SMALLER TREES
TO COME IN. AND THOSE ACT IS
SOMETHING WE CALL LADDER FUELS,
WHICH THEN ALLOW FIRE TO
TRANSITION FROM THE SURFACE UP
INTO THE CROWNS OF THE DOMINANT
TREES, AND WE'VE ALSO INCREASED
SORT OF THE CROWN FUELS WHERE
NOW TREES EVEN BIG TREES ARE
TOUCHING BIG TREES, AND WHEN A
FIRE DOES GET INTO THE GROUNDS,
IT'S REALLY DIFFICULT TO
ACTUALLY CHANGE CHANGE ITS
BEHAVIOR BECAUSE ONE BECAUSE
THERE IS NO BREAK. ESSENTIALLY,
THERE'S CONTINUITY IN THE UPPER
CANOPY. UM THAT IS AT ONE SCALE.
THAT'S SORT OF LOOKING AT THE
GROUND IF YOU WANT TO LOOK AT
SORT OF A MUCH BROADER LANDSCAPE
AND SOMETHING, FRANKLY, A LITTLE
BIT CLOSER TO HOME. THIS IS, UM
A COMPARISON OF, UH OF GIANT
LANDSCAPE ABOUT 130,000 ACRES IN
THIS PARTICULAR NECK OF THE
WOODS, UM, BASED ON AERIAL
IMAGERY FROM THE 19 FORTIES,
COMPARED TO AERIAL IMAGERY AND
THE CONTEMPORARY TIME PERIOD AND
WHAT WERE GENERALLY SEEN AS A
SHIFT, PARTICULARLY IN THAT LEFT
MOST, UM, SET OF BARS A SHIFT
TOWARDS MORE FORESTS COVER IN
THIS AREA AT THE EXPENSE OF
HERBACEOUS SHRUB AND WOODLAND
COVER. SO WE'RE SEEING THAT SORT
OF DENSIFICATION. IF YOU WILL.
IT'S NOT QUITE AS SIMPLE OF A
PROCESS AS WE MIGHT SEE UP IN
THE SIERRAS. BUT IN GENERAL,
IT'S KIND OF TRENDING IN THAT
SAME DIRECTION, AND I DON'T WANT
TO GO TO THE SECOND GRAPH. BUT
THE POINT BEING THAT THAT IS
GOING IS AFFECTING SOME OF THE
BEHAVIOR OF THESE FIRES IF YOU
SEE MORE DENSELY FORESTED AREA,
YOU'RE HAVING MORE DIFFICULTY TO
CONTROL AND PERHAPS MORE
DIFFICULT OR MORE SEVERE FIRE
EFFECTS, POTENTIALLY BECAUSE OF
THE STRUCTURE OF THE FUELS. NOW
WHAT CAN WE DO ABOUT IT? I THINK
A LOT OF YOU PROBABLY KNOW THIS
ALREADY. BUT WE REALLY HAVE TO
SIMPLE TOOLS, AND THERE'S
DIFFERENT WAYS IN DIFFERENT
INTENSITIES. WE CAN APPLY THOSE,
BUT WE CAN DO MECHANICAL
MANIPULATION. RIGHT. PEOPLE CAN
CALL IT LOGGING. YOU CAN CALL IT
THINNING. YOU CAN CALL IT
MASTICATION, BUT IN SOME WAY OR
ANOTHER, IT'S GETTING MACHINES
IN THERE AND ACTUALLY REMOVING
UM, REMOVING SOME OF THE BIOMASS
. SOME OF IT YOU CAN SEND OFF ON
A ON A LOG TRUCK. SOME OF IT YOU
CAN SHIP AND SEND MAYBE TO A
COGENERATION PLANT AND A LOT OF
IT ENDS UP FRANKLY, GETTING
BURNED IN GIANT PILES LIKE YOU
SEE, BUT THE POINT IS, IN THIS
CASE. WHAT? YOU'RE SORT OF DOING
WHAT FIRE WOULD HAVE DONE HAD IT
RESUMED ITS NATURAL ROLE. YOU'RE
TAKING OUT SOME OF THE SMALLER
TREES. YOU'RE OPENING UP GAPS.
YOU'RE LEAVING THE BIGGER TREES
AND YOU'RE TRYING TO, YOU KNOW,
TRYING TO REMOVE SOME OF THE
FUEL ON THE SURFACE, ALTHOUGH
MECHANICAL MEANS ARE NOT VERY
EFFECTIVE AT ALL. FRANKLY, IN
DEALING WITH WITH THE SURFACE
FUELS, THEY CAN BREAK THEM A
LITTLE BIT, OR YOU CAN KIND OF
CRUSH HIM, BUT THEY'RE NOT GOING
TO BE NEARLY AS EFFECTIVE AS YOU
WOULD IF YOU WERE TO DO
PRESCRIBED FIRE, AND FRANKLY
THERE, THERE REALLY ISN'T A
SOLUTION OUT OF THIS PROBLEM
WITHOUT USING FIRE, AND THAT'S
ONE OF THE PROBLEMS. I THINK WE
SEE BROADLY, IT'S THAT WE CAN'T
JUST SAY WE'RE NOT HAVING FIRE
ANYMORE. WE JUST NEED TO HAVE
MORE OF THE RIGHT TYPE OF FIRE
BECAUSE OTHERWISE WITHOUT SOME
TYPE OF FIRE IN THIS CASE
PRESCRIBED FIRE, THERE REALLY
ISN'T A WAY TO DEAL WITH THAT
SURFACE FUEL COMPONENT IS
COMPLETELY UNREALISTIC TO THINK
THAT WE WOULD ACTUALLY
PHYSICALLY RAKE THE SURFACE
FUELS WHICH BY THE WAY, ARE
CONSTANTLY BEING ADDED RIGHT
EVERY TREES OR SHETTY NEEDLES
EVERY SINGLE YEAR. THERE'S NO
WAY WE'LL WE CAN DEAL WITH THAT,
OTHER THAN THAN WITH SOME FORM
OF FIRE. SO HERE'S WHAT YOU KNOW
. THIS IS SORT OF YOUR IDEAL
CONDITION WHAT IT LOOKS LIKE
AFTER IT'S BEEN TREATED IN THIS
CASE, IT'S BEEN TREATED
MECHANICALLY. UM, WHERE TREES
HAVE BEEN THIN. YOU CAN SEE BIG
SEPARATIONS IN THE TREE CROWN,
SO NO WAY THAT FIRE CAN MOVE
FROM FROM CROWN TO CROWN, THE
CROWN AND VERY LITTLE IN THAT
LATTER FUEL STRATA IF YOU WILL,
WHERE THE FIRE EVEN IF IT GOT
INTO THE SURFACE, IT REALLY HAS
NO WAY OF GETTING UP VERTICALLY.
UM AND SO THIS WOULD BE YOUR
IDEAL TREATMENT. DO WE WANT THIS
EVERYWHERE? PROBABLY NOT RIGHT
BECAUSE IT COMES AT A COST. IF
YOU DO THIS, YOU'RE FOREGOING
SOME HABITAT FOR CERTAIN
ANIMALS, OR EVEN PLANTS THAT
THAT ARE IMPORTANT, BUT THE
POINT IS, IF WE DO ENOUGH OF
THIS, WE CAN ABSOLUTELY CHANGED
SOME OF THE BEHAVIOR OF THESE
FIRES AGAIN. WE WANT TO
ELIMINATE THEM, BUT I THINK WE
CAN CHANGE THE BEHAVIOR OF FIRE
AND I'LL LEAVE IT AT THAT. THANK
YOU.
GOOD AFTERNOON AND THANK YOU FOR
THE OPPORTUNITY TO SHARE SOME OF
THE WORK WE'VE BEEN DOING. I'M
DAVE WHITAKER. I'M THE FIRE
CHIEF OF THE MIRACLE INTO FIRE
PROTECTION DISTRICT. I ALSO LEAD
CALIFORNIA FIRE CHIEFS
ASSOCIATION WILDLAND URBAN
INTERFACE TASK FORCE, AND I'M, A
VETERAN FELLOW AT THE HOOVER
INSTITUTION, STANFORD WORKING ON
THIS ISSUE. AS DR COLLINS
MENTIONED, THERE IS A ENORMOUS,
PERHAPS MULTIGENERATIONAL EFFORT
REQUIRED TO RESTORE BALANCE
STORE FORESTS AND LANDSCAPES.
FROM MY PERSPECTIVE. THAT IS AN
INTERESTING PROBLEM FOR PEOPLE
SUCH AS DR COLLINS AND THE
FOREST SERVICE DISSOLVE. I'M
MORE INTERESTED ON THE WILDLAND
URBAN INTERFACE THAT THAT POINT
WHERE WE SEE A TRANSITION OF
FIRE FROM VEGETATION, VEGETATION
TO VEGETATION TO STRUCTURE AND
THEN STRUCTURE TO STRUCTURE,
WHICH SETS THE CONDITIONS FOR
URBAN CONFLAGRATION. I THINK
THESE TWO ARE VERY TIGHTLY
NESTED BECAUSE HIS DOCTOR
COLLINS CORRECTLY POINTED OUT.
THERE ARE FEW, IF ANY LONG TERM
SOLUTIONS TO BALANCING OUR
FORESTS AND LANDSCAPES THAT
DON'T INVOLVE THE USE OF FIRE.
BUT THE USE OF FIRE EITHER
PRESCRIBED MAN LIT FIRE OR THE
MANAGEMENT OF NATURALLY
OCCURRING FIRE IS INHIBITED WHEN
WE HAVE NON PREPARED NON FIRE
ADAPTED NON RESILIENT
COMMUNITIES IN THE LANDSCAPE
MANAGERS CANNOT MAKE FULL
ADVANTAGE OF FIRE OPPORTUNITIES
WHEN THEY HAVE CONCERNS THAT A
LITTLE BIT OF FIRE MAKING IT IN
PROXIMITY OF THE COMMUNITY COULD
HAVE NEGATIVE IMPACTS, AND THEY
ARE SUBJECT TO NOT ONLY PERSONAL
PRESSURES WHERE THEY ARE WORRIED
ABOUT THE PERSONAL LIABILITY
THAT ASSUMES A FIRE MANAGER
ASSUMED, BUT THEY'RE ALSO
WORRIED ABOUT PUBLIC PRESSURE
WHERE COMMUNITY HAS A SENSE THAT
FIRES SHOULD BE EXTINGUISHED AND
THAT FIRE REPRESENTS A THREAT TO
THEIR COMMUNITY BECAUSE THE
COMMUNITY IS NOT PREPARED. THE
WORK WE HAVE BEEN DOING WITH THE
WITH THE TASK FORCE IS FOCUSED
ON HOW WE CAN ALIGN THE LIMITED
RESOURCES AND THE LIMITED TIME
WE HAVE AVAILABLE TO ACHIEVE THE
GREATEST RESULTS AS WE SEEK TO
CREATE FIRE, ADAPTED AND
RESILIENT COMMUNITIES. I WON'T
THERE ON DOWN ON THIS SIDE TOO
HARD BECAUSE IT WAS MOSTLY
COVERED BEFORE I WILL SUFFICE IT
TO SAY FIRE IS A NATURAL AND
RECURRING FEATURE OF THE
LANDSCAPE AND THAT SOME OF THE
WORST FIRE YEARS WE HAVE HAD IN
17, 18 AND 2021. WE'RE GETTING
INTO THE BOTTOM END OF THE RANGE
OF THE NATURAL CYCLE THAT IF
FIRE WERE BURNING IN A BALANCED
ECOSYSTEM BEFORE WE BEGAN
SUPPRESSING AND MODIFYING THE
LANDSCAPE, WE WOULD SEE
SOMETHING SIMILAR TO THOSE
NUMBER OF ACRES BURNED EVERY
YEAR ON A RECURRING BASIS. WE
ALSO HAVE 120 YEARS' WORTH OF
EXCLUSION OF FIRE THAT WE NEED
TO CATCH UP FOR. SO THINK OF IT
AS A HIGH INTEREST CREDIT CARD
WITH A BALLOON PAYMENT THAT HAS
BEEN COMING Dð AND LASTLY, I
WOULD CHANGE SAY, FROM MY
PERSPECTIVE, CLIMATE CHANGE IS A
PRIMARY DRIVER WOY LOSSES IN SO
MUCH AS WE ARE EXPOSED TO MORE
OF THOSE FALL WIND DABBLER
NGUYEN DAYS THAT OCCUR ALL
THROUGHOUT THE WINTER, HOWEVER,
IF THEY OCCUR AFTER THE ONSET OF
SEASONAL RAINS, THEY'RE NOT
ASSOCIATED WITH DESTRUCTIVE
FIRE. SO THE COMPRESSION OF THE
RAINY SEASON ASSOCIATED WITH
RIGHT WITH CLIMATE CHANGE MEANS
WE'RE EXPOSED TO MORE OF THESE
DAMAGING DAYS WHERE WE HAVE
OUTSIZED IMPACTS. THIS IS SOME
MODELING FIRE SPREAD, AND THE
THING I WOULD POINT OUT HERE IS
ON A WIND DRIVEN FIRE AND ALMOST
ALL OF NOT THE LARGEST FIRES,
BUT THE FIRES HAVE RESULTED IN
THE LARGEST NUMBER OF HOMES LOST
, AND THERE'S A REASON THOSE ARE
SEPARATE LISTS FROM CAL FIRE.
ALMOST ALL OF THOSE FIRES HAVE
OCCURRED DURING A FALL WIND
EVENT. AND AS YOU CAN SEE IN THE
MODELING HERE, THIS IS BY HOURS
AT 35 AND SEVEN HOUR SPREAD, THE
FIRE VERY QUICKLY BECOMES A WIND
DRIVEN FIRE CARRIED BY FLAMING
EMBERS OR BRANDS. AND WHEN THOSE
EMBERS BRAND SPARKS, ETCETERA
WHEN THEY LAND ON A RECEPTIVE
FUEL BED, THEY START NEW FIRES
OF THEIR OWN. WHICH CAN RAPIDLY
GROW TO OUTPACE THE SIZE OF THE
MAIN BODY OF FIRE. IN A URBAN
URBANIZED BUILT ENVIRONMENT. THE
FUEL THAT IS THE RECEPTIVE FUEL
BED IS OFTEN A HOME. AND WHEN A
HOME BEGINS TO BURN, AND WE'RE
IN A STRUCTURAL FIREFIGHTERS
SETTING THAT IS A VERY, VERY
DIFFERENT BEAST THAN A
VEGETATION. FIRE HOMES BURNED
LONGER, THEY BURN HOTTER. AND
THERE ARE MORE DIFFICULT TO
EXTINGUISH BECAUSE THE EXTERIOR
OF THE HOME SHEDS THE WATER WE
WOULD USE TO FIGHT THE FIRE, AND
IT'S WORTH NOTING THAT CHAPTER
SEVEN A OF THE CALIFORNIA
BUILDING CODE AND OUR 337 OF
CALIFORNIA RESIDENTIAL CODE,
WHICH IS ARE FIRE RESISTANT
STANDARD, IT IS TECHNICALLY
CALLED AN EMBER RESISTANT
CONSTRUCTION STANDARD IS
DESIGNED TO PROTECT HOMES
AGAINST WIND BLOWN EMBERS. NOT
AGAINST THE SUSTAINED HEAT FLUX
PUT OFF BY AN ADJACENT STRUCTURE
THAT HAS BEEN IGNITED, SO IT'S
CRITICALLY IMPORTANT THAT WE
RECOGNIZE THE DEGREE TO WHICH
OUR COMMUNITIES CAN BE HARDENED
AGAINST MEMBERS, BUT THEY ALSO
RUN THE RISK OF A VERY DIFFERENT
FIRE WHEN IT TRANSITIONS INTO A
STRUCTURE TO STRUCTURE, URBAN
CONFLAGRATION. SO TO THAT POINT,
WE HAVE A NUMBER OF WAYS WE CAN
KEEP FIRE OUT OF COMMUNITIES. MY
COLLEAGUE MARK BROWN FROM REN
WILDFIRE, WE'LL TALK ABOUT HOW
THESE ARE BEING IMPLEMENTED JUST
DOWN THE ROAD HERE. BUT FROM OUT
TO IN, THEY BEGIN WITH DISTANT
FUEL BREAKS THE CREATION OF
SPLATS OR MODIFIED FUEL
TREATMENT AREAS EXTENDED
DEFENSIBLE SPACE, OR WILL WE
FUEL REDUCTION IN ZONES AROUND
HOMES THEMSELVES TO THE CREATION
OF DEFENSIBLE SPACE TO INCLUDE A
REAL ZONE ZERO WHERE WE MEET THE
SCIENCE BASED 5 FT. EXCLUSION OF
ALL COMBUSTIBLE ITEMS NEAR THE
HOME? AND THEN HOME HARDENING
RETROFITS FOR THOSE HOMES THAT
WERE BUILT BEFORE 2008 AND TO
WHOM THE AMBER RESISTANT
STANDARD DID NOT APPLY.
SPECIFICALLY THE REPLACEMENT OF
SHAKE ROOFS. THANK YOU. AND THE
RETROFITTING OF EVENTS TO 1/8
INCH OR FINER MESH OR EMBER
RESISTANT STYLE THAT WILL KEEP
WIND BLOWN EMBERS OUT OF THE
VOID SPACES OF THE HOME. ALL OF
THESE SYSTEMS ARE WELL
UNDERSTOOD THEIR WELL
ESTABLISHED THE SCIENCES IN
THEY'RE NOT SUBJECT TO A GREAT
DEAL OF DEBATE. THE CHALLENGES
IS GETTING OUR RESIDENTS AND OUR
COMMUNITIES TO ADOPT THEM AT
SCALE. AND BECAUSE OF THE
CONCERNS ASSOCIATED WITH URBAN
CONFLAGRATION, WITH THE
STRUCTURE, SEPARATION DISTANCES
LESS THAN 50 FT, WHICH IS ALMOST
ALL OF OUR SUBURBAN AREAS. IF
ONE HOME DOES THIS WORK, THERE
IS ESSENTIALLY ZERO VALUE TO
THAT WORK. IT IS NOT UNTIL 30%
OF THE HOMES WITHIN A CONTIGUOUS
BLOCK HAVE ADOPTED THESE
MITIGATIONS THAT WE BEGIN TO TIP
THE SCALE TO ACTUARIAL
SIGNIFICANCE, WHICH THEN CLIMBS
TO ABOUT THE 85% MARK. SO WE
DON'T NEED EVERYBODY. BUT WE
NEED A LOT MORE THAN THE
ISOLATED ONESIES AND TWOSIES
THAT WILL ADOPT THESE THINGS
BECAUSE THEY BELIEVE IN WILDFIRE
RISK, I BELIEVE AND AS YOU WILL
HEAR FROM OTHER EXPERTS TODAY,
ONE OF THE MOST POWERFUL FORCES
WE CAN ALIGN TO ENCOURAGE THE
ADOPTION OF THESE UNDERSTOOD
MEASURES IS ALIGNMENT WITH THE
MARKET'S ABILITY TO PRICE RISK
AND ACCESS AND AFFORDABILITY OF
INSURANCE. THE QUESTION. I AM
OFTEN ASKED AS A LOCAL
GOVERNMENT FIRE CHIEF IS HOW DO
I KNOW IF I DO THESE THINGS? MY
INSURANCE WILL REFLECT THESE
CHANGES. I THINK THE
COMMISSIONER'S RECENT
ANNOUNCEMENT OF THE INCLUSION OF
FORWARD LOOKING CAT MODELS AS A
WAY FOR RATE SETTING IS
CRITICALLY IMPORTANT BECAUSE
COMMUNITIES SUCH AS MINE THAT
HAVE MADE ENORMOUS INVESTMENTS
AND WILDFIRE RISK REDUCTION AND
FIRE SUPPRESSION CAPABILITY.
BACKWARD LOOKING HISTORICAL LOSS
MODEL. THEY WERE UNABLE TO BE
CREDITED FOR THE WORK THEY HAVE
DONE. I AM HOPEFUL THAT THE NEW
REGULATIONS WILL ALLOW THESE
MEASURES TO BE MORE BROADLY
UNDERSTOOD AND MORE BROADLY
ADOPTED, BECAUSE IF WE LOSE
FEWER HOMES TO WILDFIRE, ALL OF
OUR OTHER PROBLEMS IN THIS SPACE
GET BETTER. IF WE DON'T ADDRESS
THE UNDERLYING ISSUE, WHICH IS
THE SUSCEPTIBILITY OF HOMES AND
NEIGHBORHOODS TO WILDFIRE, AND
TO URBAN CONFLAGRATION,
EVERYTHING ELSE WE DO WILL BE
INEFFECTIVE. SO THIS IS A
SIMULATION SHOWING FIRE SPREAD
LEADING INTO THE COMMUNITY OF
WOODSIDE, AND THIS IS SPEED
BASED, NOT INTENSITY BASED WHICH
INTENSITY BASED FIRE MODELING IS
INTERESTING FOR FOREST
MANAGEMENT, HOWEVER, IS WILDLY
AND APPLICABLE FOR THE WUI
PROBLEM WHERE IT IS A QUESTION
OF RELATIVE SPEED. DID THE FIRE
GET TO THE COMMUNITY BEFORE THE
FIREFIGHTING RESPONSE GOT TO THE
COMMUNITY WITH THE APPROPRIATE
WAY TO STOP THE FIRE? AND IN
THIS PARTICULAR CASE, WE SEE
THAT THE PATHWAYS LEADING INTO
THE COMMUNITY, THE LINES ARE
SPEED BASED PATHWAYS. THE HEAT
MAP IS FIRE LINE INTENSITY BEING
USED AS A SURROGATE FOR AMBER
PRODUCTION, BUT WE SEE THERE ARE
TWO PRIMARY POINTS OF ENTRY INTO
THE COMMUNITY. AND THE ONE WE'RE
TAKING A LOOK AT HERE IS ON THE
TOP CENTER OF THE LEFT SCREEN.
IT SHOWS WHERE THAT VEGETATION
TO VEGETATION PATHWAY
TRANSITIONS INTO A NEIGHBORHOOD
THAT WE SEE IN SET ON THE RIGHT.
THIS WOULD BE THE SORT OF TOOL
THAT WOULD BE USED BY A
COMMUNITY TO SAY THIS
NEIGHBORHOOD IS GOING TO BE
PRIORITIZED FOR OUTREACH,
EDUCATION INCENTIVES AND
UNAPOLOGETIC ENFORCEMENT. OF
EITHER STATE LAW AND S R A. IN
THE CASE OF PRC, 40 TO 91, OR
LOCAL REGULATIONS IN EL REY THAT
CAN MEET OR EXCEED STATE LAW.
AND IF WE PUT IN THAT
COMBINATION OF SPLATS EXTENDED,
DEFENSIBLE SPACE DEFENSIBLE
SPACE HOME HARDENING. WE CAN
CLOSE OFF THIS PATHWAY. AND IF
YOU LOOK AT THE MAP ON THE LEFT
SIDE AGAIN, YOU SEE HOW WORK
DONE AT THIS POINT OF ENTRY HAS
AN OUTSIZED IMPACT ON ALL OF
THOSE DOWNSTREAM HOMES THAT
WOULD BE EXPOSED POTENTIALLY TO
URBAN CONFLAGRATION. IF FIRE
MADE IT PAST THIS POINT BY USING
TOOLS SUCH AS THESE, WE CAN
PRIORITIZE OUR LIMITED RESOURCES
WITH VALIDATION. THIS IS ONE OF
MANY OF THE TOOLS THAT ARE
AVAILABLE FOR VERIFICATION OF
WORK THAT HAS BEEN DONE. WE ARE
MOVING INTO A SPACE WHERE,
SAYING THAT SOMEONE IS DONE GOOD
THINGS IS PROBABLY NOT GOING TO
BE ENOUGH. WE'RE GOING TO NEED
VERIFICATION. WITH AN ANNUAL
UPDATE TO SHOW THAT THE
CONDITIONS THAT WILL SUPPORT
FIRE HAVE BEEN REMOVED AND
MAINTAINED FROM PARCELS AT A
LANDSCAPE LEVEL. THIS IS WORK
BEING DONE BY THE CALIFORNIA BY
THE WESTERN FIRE CHIEFS
ASSOCIATION THAT PROVIDES A
WILDLAND URBAN INTERFACE
RESPONSE RATING SO WE CAN
UNDERSTAND HOW MANY FIREFIGHTERS
HOW GOOD WILL THEY BE AT EACH OF
THE FIRE PATHWAYS, VEGETA, VEG
VEGETABLE STRUCTURE AND
STRUCTURE TO STRUCTURE. AND HOW
LONG WILL IT TAKE THEM TO GET TO
THAT POINT SO WE CAN VALUE THE
OFFENSIVE AND DEFENSIVE ACTIONS
TAKEN BY OUR FIREFIGHTERS THAT
ABSOLUTELY AFFECT OUTCOMES, BUT
ARE NOT CURRENTLY REPRESENTED IN
OUR FIRE SPREAD MODELS. THESE
ARE TWO RECENT WORKS THAT I
WOULD RECOMMEND TO ANYONE WHO IS
INTERESTED IN THE TOPIC. THE ONE
ON THE LEFT THE CAT MODELS FOR
WILDFIRE MITIGATION. THIS IS A
CASE STUDY DONE IN THE COMMUNITY
OF MOROCCAN DORINDA AND THEN
PARADISE IS FURTHER WORK THAT
TOOK A LOOK AT THE COMMUNITY OF
PARADISE AND MORAGO. RENDA
IDENTIFIED BUFFERS AROUND THE
COMMUNITY AND ON THE RIGHT SIDE
IDENTIFIED THE AVERAGE ANNUAL
LOSS FROM THE BASELINE RISK.
MOST IMPORTANTLY, THEY THEN TOOK
A LOOK AT WHAT A 2040 SCENARIO
LOOKS LIKE WITH NO MITIGATIONS
AND, UNSURPRISINGLY, IT SHOWS
THE SITUATION GETTING WORSE. AND
THEN THEY TOOK A LOOK AT THE
VALUE OF VARIOUS MITIGATIONS AND
FOUND AN EXTREME EXAMPLE OF THE
PLUS MITIGATION SCENARIO THAT
WAS INCLUDED THE CREATION OF
BUFFER ZONES AROUND THE
COMMUNITY. DEFENSIBLE SPACE AND
HOME HARDENING. THERE WAS UP TO
A 65% REDUCTION IN THE AVERAGE
ANNUAL LOSS FOR THAT COMMUNITY
AND A 78% OVERALL REDUCTION IN
THE COMMUNITIES HYPOTHETICAL
COST TO ENSURE I TAKE THESE AS
AN EXAMPLE OF WHAT CAN BE DONE.
THE GREAT CHALLENGE WE HAVE NOW
IS GETTING PEOPLE TO DO THE WORK
AND CREATING ALIGNMENT BETWEEN
THE FIRE SERVICE OUR LAND
MANAGERS, CAT MODELERS AND
INSURERS SO THAT WE ARE ALL
SPEAKING WITH THE SAME VOICE
WITH REGARD TO HOW RISK IS
VIEWED AND MITIGATED. I DON'T
CLAIM TO BE AN EXPERT ON PRICING
AND WOULDN'T WANT TO STEP INTO
THAT LANE. BUT I CAN SAY THIS
TREMENDOUSLY UNHELPFUL IN A
COMMUNITY. WHERE IS THE FIRE?
CHIEF I STAND UP AND SAY YOU
NEED TO DO THIS. THIS AND THIS.
PEOPLE DO IT, AND SHORTLY
THEREAFTER THEY EITHER GET A NON
RENEWAL LETTER WHERE THEY GET A
FORM LETTER FROM AN INSURER
SAYING YOU HAVE TREE CANOPY
SEPARATION OF LESS THAN 10 FT.
THEREFORE YOU WILL BE UNINSURED
IN THE MEDITERRANEAN COUNTY IN
CALIFORNIA SPECIFICALLY IN THE
BAY AREA. THERE IS NO SUCH THING
AS A RUNNING CROWN FIRE.
THEREFORE TREE CANOPY SEPARATION
IS IRRELEVANT TO FIRE SPREAD
INTO THE RISK OF THE HOME. IT IS
AN ARTIFACT OF A ONE SIZE FITS
ALL APPROACH THAT IS CLEARLY
UNHELPFUL BECAUSE THE RESIDENT
HAS NOW HEARD TWO FROM TWO
TRUSTED SOURCE. SOURCES HAVE
HEARD TWO CONTRADICTORY
STATEMENTS AND THAT REINFORCES
THE STATUS QUO BIAS AND PROVIDES
DOWNWARD PRESSURE ON THEIR
WILLINGNESS TO DO ANYTHING THAT
CHANGES THEIR SENSE OF PLACE TO
MAKE THAT INVESTMENT. AND NOT
ONLY THE COST IN THE EFFORT OF
REDUCTION, BUT THAT CHANGE IN
THEIR SENSE OF HOME THAT THE
VEGETATION THAT THEY HAVE BECOME
ACCUSTOMED TO IS PART OF THE
APPRECIATE THE OPPORTUNITY. WE
THINK THIS IS CRITICALLY
IMPORTANT WORK. THE FIRE SERVICE
IS HERE TO BE A PARTNER. WE
UNDERSTAND WE CANNOT SUPPRESS
OUR WAY OUT OF THIS. FIRES ARE
NATURAL AND RECURRING PART OF
THE LANDSCAPE, HOWEVER. FIRE
SUPPRESSION, FUEL MITIGATION AND
THE PRICING OF THE RESIDUAL RISK
OR THINGS THAT CAN BE UNDERSTOOD
, AND IT WOULD BE VERY HELPFUL
AS WE MOVE TOWARDS AN ONLINE
SPACE WHERE THE VARIOUS
STAKEHOLDERS ARE SPEAKING WITH
THE SAME VOICE AROUND THE BASIC
SCIENCE ON THIS ISSUE. THANK
YOU. THANK YOU. UM WE'RE GONNA
OPEN IT UP FOR Q AND A, BUT
FIRST, I'D LIKE TO INTRODUCE
ASSEMBLYMAN FREDDY RODRIGUEZ.
HE'S THE CHAIR OF THE EMERGENCY
MANAGEMENT COMMITTEE. WELCOME,
FREDDY. DID YOU WANT TO SAY
SOMETHING? ONCE AGAIN THANK YOU
FOR INVITING ME HERE. IT'S VERY
HOW FULL DISCUSSIONS AS CHAIR OF
EMERGENCY MANAGEMENT COMMITTEE.
OBVIOUSLY WE'RE INTERESTED IN
MAKING SURE CALIFORNIA IS BETTER
PREPARED AND SAFE. ALWAYS LOOK
AT CALIFORNIA AS A DISASTER
PRONE STATE. FIRES FLOODS AND
THAT BIG EARTHQUAKE THAT'S
COMING RIGHT? HOW DO WE CAN
BETTER PREPARE OUR COUNTIES OR
CITIES THROUGHOUT THE STATE,
WITH VALUABLE RESOURCES PLANNING
, MOVING FORWARD AND LESSONS
LEARNED RIGHT EVERY IT'S A VERY
UNIQUE TIME WHEN WE HAVE WITH US
THE FIRES THE FLOODS,
EARTHQUAKES. WHAT ARE THE
LESSONS LEARNED? WHAT ARE WE
GONNA DO BETTER FOR THE NEXT
TIME, RIGHT? AND HOW WE BETTER
PREPARE OURSELVES. CALIFORNIA
ALWAYS LOOKS TO BE THE LEADER
AND A LOT OF THINGS, SO I THINK
AT THIS POINT WE NEED TO BE THE
LEADER IN PREPARING OUR
COMMUNITIES THROUGHOUT
CALIFORNIA WHETHER IT'S THAT
FIRE THAT FLOODED THE
EARTHQUAKE, BUT ONCE AGAIN, I
WANT TO THANK EVERYBODY IN HERE,
THANKS TO BOTH CHAIRS FOR HAVING
ME JOIN THEM AS WELL. THANK YOU.
OKAY. DO WE HAVE ANY QUESTIONS?
SOME OF THEM WOULD. FIRST OF ALL
, THANK YOU. TO BOTH OF YOU
APPRECIATE THAT, UM SO I MY
DISTRICT IS REALLY FIRE PRONE.
OBVIOUSLY THE LARGEST FIRE THIS
YEAR, I THINK IS THE SMITH RIVER
COMPLEX UP AND DOWN, OR UM, AND
TRINITY COUNTY AREA. UM AND IT'S
ABOUT 95,000 ACRES. SO THAT
SOUNDS LIKE A BIG FIRE. BUT IN
THE BIG PICTURE, WE'VE HAD A
REALLY SO FAR ANYWAY, A
RELATIVELY LIGHT SEASON. UM BUT
THERE'S A DIFFERENCE. I MEAN,
OBVIOUSLY WHEN YOU'RE UP THERE
AS FEDERAL RESPONSIBILITY AREA
FEDERAL FEDERAL. FIRE FIRE
AGENCIES ARE JUST LETTING A LOT
OF THESE. THESE FIRES BURNED
BECAUSE THERE'S NOT A LOT OF
RISK THE STRUCTURE SO UM, BUT
WHEN WE GET CLOSER TO THE WUI,
WHICH YOU ACHIEVE FOR ARE ARE
ARE TALKING ABOUT HERE THEN
THEN, THEN, THAT'S WHERE FOR US
. A LOT OF THE RUBBER RUBBER
MEETS THE ROAD. SO UM, I'M
CURIOUS. UM APPRECIATE THE
INFORMATION THERE AND WHAT
YOU'RE DOING, AND BUT I'M
CURIOUS YOU A LOT OF WORK HAS
BEEN DONE, OBVIOUSLY, UM, BY
YOUR AGENCY AND FOR THE BENEFIT
OF PEOPLE THAT LIVE IN YOUR
COMMUNITY, YET IT'S NOT BEEN
REFLECTED BY BY INSURANCE. SO
WHAT DO YOU THINK THE CAT
MODELING IS GOING TO DO? THE
CHANGE THAT I MEAN WHAT THEY'RE
LOOKING FORWARD. ARE THEY
LOOKING FORWARD? BASED ON WHAT
YOU WHERE YOU ARE NOW OR OR WHAT
IS IT THAT YOU? WHAT DO YOU
THINK IS GOING TO BE DIFFERENT?
BECAUSE YOU'VE DONE A LOT OF
WORK AND THAT DIDN'T THAT DIDN'T
IMPACT RATES AND DIDN'T IMPACT
COVERAGE. SO WHAT'S GOING TO BE
THE DIFFERENCE FROM YOUR
PERSPECTIVE? SO WITH THE
PREVIOUS HISTORICAL LOSS MODELS
. THEY ONLY LOOK BACKWARDS AND
SO IT WAS NOT POSSIBLE TO REPORT
WORK YOU HAD DONE NOT PLANNED
BUT HAD COMPLETED BECAUSE IT WAS
A LAGGING INDICATOR BASED ON
FIRE LOSS ON A MUCH LARGER
SCALE. AS CAP MODELS COME INTO
USE AS COMMUNITIES DO WORK, SUCH
AS BEING DONE IN MARIN COUNTY
AND IN THIS COUNTY. THE CAT RISK
MODELERS WANT TO RUN THE MOST
ACCURATE MODEL THEY CAN. THEY'RE
RUNNING THOSE MODELS. THE
COMBINATION OF TOPOGRAPHY
WHETHER AND FUELS BASED ON A
FUEL MODEL AND THE MOST ACCURATE
FUEL MODEL WILL EQUAL THE MOST
ACCURATE RESULTS. SO AS
COMMUNITIES DO WORK THAT
MODIFIES THE FUEL MODELS. AND IF
THE FUEL MODEL IS MODIFIED, THE
RESULTS WILL REFLECT THE CHANGE
IN THE CONDITIONS ON THE GROUND
AND IN SO MUCH AS THOSE RESULTS
RESULT IN FIRE TAKING LONGER TO
ENTER A COMMUNITY, PARTICULARLY
WITH THE EMERGING ABILITY TO
VALUE THE FIREFIGHTING RESPONSE
. OUR BELIEF IS THAT THE MODELS
WILL THEN REFLECT ACCURATELY
REFLECT THE CONDITIONS ON THE
GROUND, AND IN THAT, I BELIEVE
WE ALL HAVE A SHARED DESIRE TO
SEE ACCURATE MODELS. AND
ACCURATE INPUTS TO REFLECT THE
CONDITIONS ON THE GROUND, AND IN
DOING THAT, I BELIEVE WE WILL
SET CONDITIONS TO ENCOURAGE
ADOPTION AND MAINTENANCE OF
WILDFIRE RISK REDUCTION MEASURES
BECAUSE THERE WILL NOW BE A
DIRECT OUTCOME IN THE FORM OF
THE MODELING AND THE RATES THAT
COME FROM MODELING THAT
CURRENTLY DOESN'T EXIST. IS
THERE A CRITICAL FINAL QUESTION?
IS THERE A CRITICAL UM, YOU
TALKED ABOUT HELP SOME
MITIGATION LEADS TO, YOU KNOW, A
LACK OF, OR A REDUCTION IN
POTENTIAL FOR LOSS. UM YOU KNOW,
I LOOK, THERE'S AN AREA I WALK.
I WALK MY DOG EVERY DAY, AND
THERE'S THREE HOMES THAT LIVE ON
IT THERE ON A HILLSIDE. TWO OF
THEM HAVE DONE A FABULOUS JOB.
THEY LOOK A LOT LIKE WHAT YOU
POINTED OUT, AND THE WORK IS
DONE IN FOR US, MR DR COLLINS.
YET THERE'S THIRD ONE HASN'T
DONE A BLESSED THING. AND SO FOR
ME IN MY MIND, AFTER ALL, THE
WHAT I'VE SEEN OVER THE YEARS,
IT JUST FEELS LIKE THAT
COMMUNITY IS STILL AT RISK.
THOSE THREE HOMES ARE AT RISK
BECAUSE ONE NEIGHBOR ISN'T ON
BOARD WITH WITH ALL OF THIS.
WHAT DO YOU IS THERE? A. IS
THERE A CRITICAL MASS OR A MODEL
THERE THAT THAT DOES REDUCE THAT
RISK? BECAUSE I DON'T KNOW HOW
YOU GET EVERYBODY ON BOARD.
THERE'S STILL SOME PEOPLE
BELIEVE THAT EVERY TWIG AND
EVERYTHING IS COMPLETELY SACRED
AND SHOULDN'T BE CUT OR REMOVED
. SO WHAT? WHAT IS THE CRITICAL
MASS? AND HOW DO YOU GET THAT
MESSAGE ACROSS THE PEOPLE?
CRITICAL MASS WITHIN A BLOCK OF
HOMES IS 30% IS THE MINIMUM
THRESHOLD RISING TO ABOUT 85?
AND I AGREE WITH YOU WILL NEVER
GET 100% OF THE FOLKS. THERE ARE
FOLKS WHO EITHER FEEL STRONGLY
OR ARE INDIFFERENT OR DON'T HAVE
THE MEANS OR ANY OF A VARIETY OF
REASONS, AND THE LAWS IS
CERTAINLY VERY DETROL
DEFERENTIAL TO A RESIDENT OF
THEIR HOME AROUND CONDITIONS ON
THEIR PRIVATE PROPERTY AND CLOSE
LOCATION, BILL. BUT FROM AN
ACTUARIALLY ACTUARIAL STANDPOINT
, WHEN AT LEAST 30% OF THE HOMES
IN A BLOCK A SIGNIFICANT BLOCK
AND THAT TYPICALLY IS ABOUT 100
HAVE DONE THE WORK THAT STARTS
TO BEND DOWN THE CURVE OF
MODELED WILDFIRE RISK. THANK
YOU. GO AHEAD. YES UH, THANKS,
CHIEF. YOU TALKED ABOUT THE
RETROFITS FOR HOME HARDENING. SO
WHAT FUNDING TYPICALLY COME TO
HELP SOME OF THESE HOMEOWNERS?
OBVIOUSLY THE COST IS PROBABLY
QUITE A BIT. BUT IS THERE
INCENTIVES FROM EITHER STATES
CITIES COUNTIES THAT WOULD HELP
TO RETROFIT THESE HOMES? AT THE
STATE LEVEL, CALA ES IS
UNDERTAKING A JOINT EFFORT IN
FOUR PILOT COMMUNITIES. NOW
THAT'S A LITTLE MORE EXTENSIVE.
THAT INCLUDES THINGS SUCH AS
SIDING AND WINDOWS, THE ABSOLUTE
BARE MINIMUM IS WOULD SHAKE
GROUPS HAVE TO GO. THAT'S BEEN
REFLECTED IN STATE LAW FOR SOME
TIME NOW HAS NOT BEEN LEGAL TO
PUT AN ENTREE TO SHAKE ROOF ON
AND QUITE SOME TIME. AND THEN
FOR VINCE, UM THERE ARE A NUMBER
OF LOCAL AGENCIES THAT
INCENTIVES MARINE COUNTY, MY
COMMUNITY, BERKELEY, OTHERS.
EVENT RETROFIT IN THE FORM OF
1/8 INCH OF FINER MESH IS A VERY
, VERY INEXPENSIVE PROPOSITION.
BOTH LOW COST MATERIALS, LOW
COST OF LABOR AND AN OUTSIZED
IMPACTS BECAUSE WHEN TAKEN IN
CONJUNCTION WITH CREATION,
DEFENSIBLE SPACE THAT'S BEEN
BASIS OF STATE LAW SINCE 1994
1967 REALLY FOR 40 TO 91. FIRE
JUST DOES NOT HAVE A PATHWAY TO
ENTER THE HOME AT SCALE. NOW,
THERE WILL ALWAYS BE ONE SEASON
TUESDAYS. THERE WILL ALWAYS BE
OUTLIERS BUT THE VAST MAJORITY
OF CIRCUMSTANCES THAT LEAD TO
STRUCTURAL IGNITION OR MITIGATED
WITH THE REPLACEMENT EVENTS IN
THE CREATION OF DEFENSIBLE SPACE
AROUND THE HOME, WHICH IS LOW
COST HIGH IMPACT, PARTICULARLY
WHEN UNDERTAKING ITS SCALE.
THANK USUAL TO THE PANELISTS.
I'M QUICK OBSERVATION THAN A
QUESTION. CHIEF WANTED TO PICK
UP ON YOUR POINT, AND IT SEEMS
LIKE THE STATUS QUO RIGHT NOW.
IS ALL TOO OFTEN EVEN AS
HOMEOWNERS OR OR NEIGHBORHOODS.
IF YOU WILL ARE STEPPING UP AND
DOING THE RIGHT THING AROUND
HOME, HARDENING. VEGETATION
MANAGEMENT. THERE'S STILL LOSING
THEIR COVERAGE OR CERTAINLY FACE
THAT. RISK. THAT'S SOMETHING I
THINK WE'RE ALL VERY CONCERNED
ABOUT. THERE'S BEEN LEGISLATION
INTRODUCED ON THAT SO JUST
STICKING A PIN IN THAT I THINK
THAT'S GOING TO BE AN ONGOING
ISSUE BECAUSE IT SEEMS
COMPLETELY COUNTERINTUITIVE TO
WHAT WE'RE TRYING TO ACCOMPLISH.
FOLLOWING UP ON SOME OF MY
COLLEAGUES, UM AND KIND OF FROM
OUR VANTAGE POINT. HOW CAN WE BE
USEFUL IS IN YOUR VIEWS HAS THE
STATE TAKING THE NECESSARY
ACTIONS AND MADE THE PROPER
INVESTMENTS TO REDUCE RISK FROM
FUTURE WILDFIRES. AND WHAT MORE
NEEDS TO BE DONE. CERTAINLY THE
INVESTMENT MADE IN FIREFIGHTING
RESOURCES. FIREFIGHTING AIRCRAFT
INCREASED NUMBER OF HAND CREWS
INCREASING EVENT THAT IS VERY
HELPFUL. MORE FIREFIGHTERS ARE
HELPFUL. WHEN WE ARE ON THOSE
SHOULDER FIRE EVENTS THAT ARE
NOT A CONFLAGRATION. THEY'RE NOT
THE EARLY PHASES OF A FAST
MOVING, WIND DRIVEN FIRE. AS DR
COLLINS SHOWED DURING DAYS ONE
AND TWO OF THE CREEK FIRE, NO
NUMBER OF FIREFIGHTERS. WE'RE
GOING TO STOP THAT EVENT THAT
FIRE WAS GOING TO RUN UNTIL IT
HIT ROCKS OR THE WIND STOPPED
AND THERE WAS NOTHING ELSE TO BE
DONE ABOUT IT. SO THAT
INVESTMENT IS A GOOD THING AND
IT'S VERY HELPFUL. THE STATE HAS
BEGUN TO PUT ADDITIONAL
INVESTMENT INTO THE RETROFITTING
OF HOMES AND INCREASED ITS CI
INVESTMENTS IN FUEL BREAKS AND
OTHER WILDFIRE RISK REDUCTION
MEASURES. I WOULD SAY A CRITICAL
GAP IN THE SPACE IN THE CC, I
FUEL BRAKE AND FUEL TREATMENT IS
THERE IS NO MONEY FOR
MAINTENANCE. INCLUDED IN THOSE
INVESTMENTS AND WHEN WE PUT IN A
FUEL BREAK, DEPENDING ON THE
FUEL TYPE, IF IT'S IN GRASS, YOU
GET SIX MONTHS OF VALUE THE NEXT
YEAR, THERE IS NO RESIDUAL VALUE
THAT IN BRUSH, IT'S ABOUT 3 TO 5
YEARS AND TIMBER. IT'S MORE LIKE
5 TO 15. BUT WHEN WE PUT IN FUEL
TREATMENTS IN A BRUSH FUEL MODEL
WITHOUT ANY MAINTENANCE FUNDS,
IT IS A STATEMENT OF FACT THAT
WITHIN THE NEXT FIVE OR SO YEARS
THERE WILL BE NO RESIDUAL VALUE
FOR THAT TREATMENT. AND SO,
INCLUDING THE MAINTENANCE FUNDS,
WHICH IS PENNIES ON THE DOLLAR.
AN INITIAL ENTRY IS ALWAYS MORE
EXPENSIVE, INCLUDING MAINTENANCE
FUNDS IN THE FORM OF PRESCRIBED
FIRE. AND I WOULD. LASTLY I
WOULD SUGGEST THAT THE PRIMARY
LIMITER ON THE USE OF PRESCRIBED
FIRE IN PROXIMITY TO COMMUNITIES
WHERE IT HAS THE GREATEST
BENEFIT. I'M NOT SPEAKING ABOUT
THE LANDSCAPE LEVEL TREATMENTS
AND FOREST STUFF BECAUSE THAT
THERE ARE OTHERS WHO ARE FAR
MORE EXPERIENCED ON THAT THAN I
AM. BUT AS WE SEEK TO REDUCE THE
VULNERABILITY OF OUR
COMMUNITIES, ONE OF THE MOST
EFFECTIVE WAYS TO DO THAT,
BEYOND DEFENSIBLE SPACE AND HOME
HARDENING IS INTRODUCING FIRE AS
A MAINTENANCE TOOL IN AREAS THAT
WE HAVE MADE AN INITIAL ENTRY
USUALLY THROUGH GRANT FUNDS AND
THE AIR QUALITY MANAGEMENT
CONCERNS, AND THE LIMITATIONS
ARE THE LIMITING FACTOR ON OUR
ABILITY TO PUT MORE FIRE
BENEFICIAL FIRE ON THE GROUND.
THE NUMBER OF DAYS WHERE IT IS
SAFE TO BURN. AND I WILL SAY IT
AS A FIRE CHIEF. I SIGNED THE
BURN PLAN. I HAVE PERSONAL
LIABILITY THAT FIRE GETS AWAY. I
AM A FORMER FIRE CHIEF. SO I
HAVE REAL LIABILITY ABOUT THIS
THING GETTING AWAY AND I HAVE
THIS TINY BAND OF PERMISSIVE
CONDITIONS IN THE SPRING AND THE
FALL WHERE IT IS SAFE TO BURN.
SOME OF THOSE DAYS FALLEN AREAS
WHERE AIR QUALITY WILL NOT GIVE
THE APPROVAL FOR THE PPM RELEASE
. AND SO WE ARE SHUT DOWN, AND I
DON'T DISAGREE THAT THEY HAVE AN
IMPORTANT JOB, AND I DON'T
DISAGREE THAT AIR QUALITY IS
IMPORTANT, BUT CURRENTLY
PRESCRIBED FIRE. THERE'S NO
CONSIDERATION GIVEN FOR THE
OFFSET AND THE REDUCTION OF
FUTURE WILDFIRES. AND THE
EMISSIONS OF A STRUCTURAL FIRE
AT SCALE DWARF ANYTHING WE WILL
SEE IN WELL MANAGED PRESCRIBED
FIRE, AND EVERY YEAR WE LOSE,
PARTICULARLY IN OUR URBAN
COUNTIES AND REGIONS. WE LOSE
PRESCRIBED FIRE DAYS BECAUSE OF
AIR QUALITY CONCERNS, AND THOSE
ARE DAYS THEN ALL THAT FUEL JUST
ROLLS OVER. AS I MENTIONED
BEFORE EVERY VEGETATIVE ITEM
THAT GROWS AND IS NOT BURNED,
JUST CARRIES OVER TO A FUTURE
YEAR, SO AS ASSEMBLYMEMBER'S
WOULD MENTIONED THIS HAS BEEN A
RELATIVELY LIGHT YEAR FOR FIRE.
SO IT WAS LAST YEAR. AND THAT'S
MOSTLY BECAUSE OF THE HEAVY
RAINS. EVERYTHING IS STILL VERY
GREEN. YOU CAN'T GET THE BRUSH
TO BURN THIS YEAR IS TWO GRAND.
ALL OF THAT BRUSH AND ALL THAT
GREAT GROWTH THIS YEAR IS GOING
TO CARRY OVER TO NEXT YEAR AND
THE YEAR AFTER, AND OUR ABILITY
THOUGHTFULLY GET FIRE ON THE
GROUND IS THE BEST WAY TO
MAINTAIN THE FUEL BREAKS, FLATS
AND OTHER FUEL TREATMENTS THAT
THE STATE IS GENEROUSLY FUNDING.
BUT IT'S NOT FUNDING THE
MAINTENANCE OF YEAH, I AGREE
WITH ANY OF THAT, UM I THINK THE
OTHER OTHER THING TO THINK ABOUT
IT. ACTUALLY JUST TO ADD ON TO
IT IS THAT THESE? THESE
TREATMENTS ARE NOT ONE OFF. THEY
ARE REGIME WERE ESSENTIALLY NEED
TO COMMIT TO THIS REGIME OF
REPLACING WHAT FIRE WOULD HAVE
DONE. WHAT FIRES YOU KNOW IF IT
WERE DOING RESUMING ITS NATURAL
ROLE. WE NOW TAKE THAT ON AND WE
TAKE IT ON IN DIFFERENT FORMS.
BUT THAT'S THAT'S THE THOUGHT
IT'S NOT AS THOUGH WE JUST
TREATED THAT NOW WE WALK AWAY
AND GO SOMEWHERE ELSE. SOME OF
THEM. I JUST WANT TO SAY I'M
GLAD I CAME TODAY. NOT ONLY ARE
WE TAKING OFF HER SHAKE ROOF
THIS MORNING, BUT THERE WAS
CONTROLLED BURN. JUST ABOUT IN
MY AREA ABOUT I WOULD SAY, FIVE
MILES NORTH OF WOODSIDE, THAT
YOU SHOWED US, UM, IN THAT EXACT
FIVE MILES IS A AS THE CROW FIES
CONTROLLED BURNING LAST FRIDAY.
SO TO ALL THE CARRIERS IN THE
AUDIENCE, I'M HOPEFUL THAT MY
RATES WILL COME DOWN. I'M JUST
SAYING NO, BUT IN ANY EVENT, I
FIND THAT VERY INTERESTING. THE
MAINTENANCE PART OF IT AND IN
THE TROUBLE WITH THEIR QUALITY
WHEN YOU TRY TO DO IT, BUT IT
DID HAPPEN LAST WEEK IN MY AREA,
AND, UM I'M FEELING LIKE I'M
GONNA REST EASY TONIGHT. THANK
YOU LIKE TO THANK BOTH OF YOU
FOR BEING HERE. THIS INFORMATION
ESPECIALLY HELPFUL I ACTUALLY
HAVE BEEN TO LIVE. UH IN AN
URBAN AREA. THAT'S PART OF THE
WUI. AND SO, UM I SEE THIS WHEN
I GO IN MY BACKYARD THIS THESE
HILLS HAVEN'T BURNED I DON'T
NEED PROBABLY 100 YEARS AND I
THINK OUR HOMEOWNERS ASSOCIATION
JUST HIRED A HERD OF GOATS. BUT
THERE AREN'T ENOUGH GOATS TOO.
YOU KNOW, CREATE A DEFENSIBLE
SPACE IN MY MIND, SO I
APPRECIATE YOU BEING HERE. TURN
THIS OVER TO YOU NOW, DAMON.
GREAT THANK YOU. CHAIR AND THANK
YOU. PANELISTS WILL MOVE TO OUR
NEXT PANEL. HOW DOES CALIFORNIA
BECOME RESILIENT TO WILDFIRES?
SO AS OUR NEXT PANEL, WE WILL BE
EXAMINING THE STEPS CALIFORNIA
HAS ALREADY TAKEN TO BECOME MORE
RESILIENT TO WILDFIRES AND THE
ACTIONS STILL REQUIRED TO REDUCE
RISK AND BETTER PROTECT OUR
RESIDENTS. TO HELP ADDRESS
INCREASED WILDFIRE RISK. THE
STATE HAS TAKEN STEPS SEVERAL
STEPS IN RECENT YEARS IN 2021,
THE STATE BUDGET GUARANTEED
NEARLY $1 BILLION IN WILDFIRE
PREVENTION FUNDING FOR THE 21 22
FISCAL YEAR AND REQUIRED AT
LEAST $200 MILLION ANNUALLY IN
ADDITIONAL FUNDING FOR THE NEXT
SIX YEARS. THIS FUNDING
COMMITMENT WAS NEARLY TRIPLE
WHAT WAS APPROVED FOR WILDFIRE
PREVENTION AND RESOURCE
MANAGEMENT IN 2020. MORE
RECENTLY IN JULY, 23, THE
GOVERNOR ANNOUNCED $113 MILLION
IN NEW FUNDING. MADE POSSIBLE BY
THE $52 BILLION CALIFORNIA
CLIMATE COMMITTEE COMMITMENT
BUDGET. MONEY IS LARGELY WENT TO
VARIOUS WILDFIRE GRANT PROGRAMS
. FOR EXAMPLE, THE FUNDING,
ANNOUNCED THIS PAST JULY WILL
SUPPORT 96 WILDFIRE PREVENTION
PROJECTS ACROSS THE STATE. WITH
MORE THAN EIGHT AND 10 GRANTS
DIRECTED TOWARDS VULNERABLE OR
UNDERSERVED COMMUNITIES. TO KICK
OFF THE PANEL. WE HAVE MARK
BROWN, THE EXECUTIVE OFFICER OF
THE MARINE WILDFIRE PREVENTION
AUTHORITY, I LOCAL AGENCY. WE'RE
VERY PROUD OF SO WELCOME, MARK.
THANK YOU VERY MUCH APPRECIATE
THE INVITATION AND YES, LIKE
ASSEMBLYMEMBER'S, CONNOLLY SAID.
MY NAME IS MARK BROWN PRIOR TO
BEING THE EXECUTIVE OFFICER FOR
THE MW, PA WAS DEPUTY FIRE CHIEF
WARREN COUNTY FIRE WITH 30 YEARS
OF EXPERIENCE, 15 YEARS ON A
CAMPFIRE INCIDENT MANAGEMENT
TEAM IS AN OPERATION SECTION
CHIEF, WHICH MEANS I WAS
ASSIGNED TO SOME OF THE MOST
DEVASTATING FIRES IN THE STATE'S
HISTORY. UH, FOR SIX YEARS AGO,
I WAS THE INCIDENT. COMMANDER OF
THE NUNS FIRE FOR THE 1ST 24
HOURS AND BACK IN 2020. THE
GLASS FIRE BURNED THROUGH MY
NEIGHBORHOOD IN SANTA ROSA. AND
TO YOUR POINT, UM. NINE HOMES IN
MY SUBDIVISION WERE DESTROYED
BECAUSE THREE HOMES BECAME
IGNITED. AND IT WAS IT WAS
ACTUALLY THERE'S A LOT THAT I
TAKE THROUGH MY NEIGHBORHOOD AND
I TOOK PICTURES OF THE
DEFENSIBLE SPACE. BECAUSE SOME
PEOPLE HAVE DONE GREAT WORK. AND
ONE PERSON WAS RESPONSIBLE FOR
FIVE HOMES RIGHT THERE. AND SO
PART OF MY TRANSITION THROUGH MY
FIRE SERVICE CAREER IS 30, PLUS
YEARS OF PUTTING FIRES OUT. AND
IT DECIDED IT WAS TIME TO STOP
SUPPRESSING FIRE FOR ME
PERSONALLY, IT WAS TIME TO START
WORKING ON THE PREVENTION SIDE
OF THE SHOP. AND WE NEED MORE
PEOPLE DOING THAT. SO THE M W P.
I WANT TO RECOGNIZE WE ARE NOT
DOING ANYTHING THAT'S REALLY
NOVEL. WHAT'S NOVEL ABOUT THE N
W P A. IS OUR GOVERNANCE
STRUCTURE, DEDICATED FUNDING AND
THE PATIENT SCALE AT WHICH WE
CAN DO WORK? THAT'S WHAT'S NOVEL
ABOUT THE W P A. SO I DO THINK
WE HAVE A RATHER REPLICABLE.
MODEL. WE DID CREATE A STRATEGIC
PLAN WITH FIVE GOAL AREAS. I'M
GOING TO START IN THE MIDDLE
BECAUSE WE HAVE A HOUSE OUT
APPROACH. BUT THIS THESE GOALS
SHOW THAT WE TAKE A SYSTEMS
APPROACH AND WE HAVE TO APPLY
ALL OF THE SYSTEMS IN ORDER TO
BE SUCCESSFUL. SO FIRST PART IS
DEFENSIBLE HOME EVALUATIONS AND
WE TARGET THE EVALUATE ONE THIRD
OF OUR HOMES WITHIN OUR
JURISDICTIONAL AREA EVERY YEAR.
WE MOVE INTO IMPROVE EVACUATION
SYSTEMS AND ALSO IMPROVE OUR
EVACUATION ROUTES WERE REDUCING
WILD ON FUELS WHILE FIRE FUELS
BOTH WITHIN OUR COMMUNITIES
ALONG THE WHILE ON URBAN
INTERFACE BOUNDARY AND THEN
WORKING WITH OUR LAND MANAGERS
WITH FUEL REDUCTION AND FOREST
HEALTH PROJECTS AS WELL. IT IS
SO IMPORTANT THAT WE EDUCATE THE
PUBLIC. WE WON'T GET THE PUBLIC
TO COME ON BOARD TO DO THEIR
WORK UNTIL WE PROVIDE THE PROPER
EDUCATION JUST COMING ONTO
SOMEONE'S PROPERTY AND SAYING
YOU NEED TO DO THIS BECAUSE
WE'RE FIRE DEPARTMENT DOESN'T
WORK. YOU NEED TO SHOW HIM THE
WHY. AND THEN WE ALSO PROVIDE
GRANTS FOR OUR RESIDENTS AND
ALOE SENIOR LOW INCOME TAX
EXEMPTIONS. WE'RE FORTUNATE TO
HAVE A 20 MILLION PLUS DOLLARS A
YEAR. BUDGET. THANKS FOR THE
PASSAGE OF MEASURES C TWO WEEKS
BEFORE COVID. SO I'M REALLY GLAD
THE TIMING WORKED OUT. WELL,
THERE 10 CENTS PER SQUARE FOOT
BUILDING SPACE IS WHAT THE
PROPERTY TAXES 60% OF OUR BUDGET
GOES TOWARDS WHAT WE CALL CORE
PROJECTS. VEGETATION ARE
REMOVAL. EVACUATION ROUTE.
IMPROVEMENTS, PUBLIC EDUCATION.
GRANTS. AND THEN, UM, DEFENSIBLE
SPACE 20% OF OUR BUDGET, SO 4.4
MILLION AND CHANGE GOES TOWARDS
DEFENSIBLE SPACE EVALUATIONS.
MEASURE C SUNSETS AT 10 YEARS.
OF COURSE, WE'RE GOING TO TRY TO
RENEW THAT. BUT AFTER 10 YEARS
AND WE LOOK BACKWARDS, AND WE
LOOK AT THE SUCCESSES OF THE W P
A, I BELIEVE ARE DEFENSIBLE
SPACE EVALUATION PROGRAM WILL BE
SEEN AS THE SINGLE LARGEST
SUCCESS. AND THEN THE LAST 20%
IS A PASS THROUGH TO OUR 17
MEMBER AGENCIES BECAUSE OUR LAW
OR FIRE AGENCIES KNOW THEIR
COMMUNITIES SO WELL, THEY KNOW
WHAT THEIR COMMUNITIES NEED, AND
THEY WILL ARE ABLE TO USE THOSE
MONIES IN THE SAME WAY THAT WE
USE THEM FOR THE CORE PROJECTS.
AGAIN WE ARE WORKING ON A HOUSE
OUT APPROACH. WE FEEL THAT TOO
MANY OF THE RESIDENTS HAVE THEIR
HOUSES AT THEIR BACKS, AND THEY
POINTED THE WILDLIFE AND SAY
THAT'S THE PROBLEM. WE ARE
TRYING TO GET THEM TO TURN
AROUND AND LOOK AT THEIR HOUSE
AND SAY IF YOU CAN KEEP YOUR
HOUSE FROM IGNITING THAN THE
HOME TO HOME SPREAD IT DOESN'T
HAPPEN, SO WE'RE REALLY TRYING
TO GET RESIDENTS TO FOCUS ON
THEIR HOUSES. AGAIN ARE
DEFENSIBLE SPACE VALUATION
PROGRAM HAS BEEN A PRETTY BIG
SUCCESS WE HAVE ABOUT 80,000
RESPECTABLE PROPERTIES IN MARIN
OR WITHIN THE J. P. A. WE'RE
AVERAGING ABOUT 33,000
INSPECTIONS PER YEAR THIS YEAR.
SO FAR, WE'VE CONDUCTED 27,000.
60% OF THE PEOPLE WHO HAVE
RECEIVED AN INSPECTION HAVE
TAKEN SOME FORM OF ACTION
DOESN'T MEAN THEY DID EVERYTHING
WE ASKED THEM TO DO, BUT THEY
HAVE TAKEN SOME FORM. IT'S
PROBABLY NOT POSSIBLE FOR PEOPLE
TO DO EVERYTHING THAT'S ON THAT
LIST. SO WE HELP THEM PRIORITIZE
WHAT NEEDS TO GET DONE. START
WITH THE RISKIEST ITEMS, THE LOW
HANGING FRUIT AND MOVE ON FROM
THERE YEAR BY YEAR PROCESS. WE
ALSO HAVE THE ABILITY TO HAVE
THE REPORT EXPORTED TO THE
INSURANCE INSTITUTE OF BUSINESS
HOME SAFETY. IF ONLY IF THE
RESIDENT WANTS THAT TO HAPPEN.
WE DON'T SHARE ANY DATA UNLESS
THE RESIDENT GIVES US PERMISSION
TO SHARE THAT DATA. THEN THEY
CAN RECEIVE POTENTIALLY A
WILDFIRE PREPARED HOME
DESIGNATION. WE'RE ALSO
INSPECTING FOR ALL OF THE ITEMS
WITHIN THE SAFER FOR WILDFIRE
REGULATIONS BOTH POSITIVELY AND
NEGATIVELY. SO IF RESIDENT LET'S
SAY HAS DONE, IT HAS CLASS A
ROOF NON COMBUSTIBLE CITING AND
NON COMBUSTIBLE CLOSURES.
DEFENSES WILL ACTUALLY KNOW THAT
WITHIN OUR SYSTEM, AND WE CAN
TELL THE THAT TO THE HOMEOWNER
AND THEY CAN GO TO THEIR
INSURANCE COMPANY AND SAY, HEY,
I HAVE THESE ITEMS. HERE IS A
REPORT THAT SAYS I HAVE THESE
ITEMS. I'M SUPPOSED TO GET A
DISCOUNT. SO THAT'S ONE OF THE
THINGS WE'RE WORKING ON AS WELL.
PRESIDENT GRANT PROGRAM HAS BEEN
REMARKABLY, UM, SUCCESSFUL. LAST
YEAR, WE EXPENDED $800,000 IN
HOMEOWNER GRANTS FOR BOTH FOR
DEFENSIBLE SPACE AND HOME
HARDENING. DEFENSIBLE SPACE IS
$1000 PER RESIDENCE WITH NO
MATCH FIVE TO UP TO 5000 WITH
THE MATCH REQUIRED FOR HOME
HARDENING EXCEPT FOR KEY ITEMS.
GUTTER GUARDS, EVENTS AND THE
SEALS UNDERNEATH YOUR GARAGE
DOOR. REFUEL ARE JUST TOO
IMPORTANT THAT WE DON'T HAVE TO
HAVE A GRANT IN ORDER TO RECEIVE
THOSE ITEMS. THIS YEAR. WE'VE
DISTRIBUTED 225 G ALREADY. WE'VE
EXPANDED $458,000 OF MW PE
REVENUE, BUT WHAT I THINK IS
IMPORTANT IS THAT 3.2 MILLION
HAS BEEN EXPENDED BY THE
RESIDENTS. FOR EVERY DOLLAR THAT
IS PUTTING OUT THE RESIDENTS ARE
PUTTING $6 OUT. SO WE SEE THAT
AS A HUGE RETURN ON INVESTMENT
AND RETURN ON INVESTMENT FOR THE
RESIDENT FOR THE TAXES ARE
PAYING ABLE TO GET A GRANT.
THEIR NEIGHBORS ARE GETTING A
RETURN ON INVESTMENT BECAUSE
THEY MADE THEIR NAME. THEIR
NEIGHBORS HAVE MADE THEIR HOME
SAFER. AND THEN THE N W P S
GETTING A RETURN ON INVESTMENT
BECAUSE WE'RE INVESTING IN THE
COMMUNITY AND THEY'RE STEPPING
UP. THIS DOESN'T INCLUDE THAT
3.2 MILLION DOESN'T INCLUDE
PEOPLE WHO DIDN'T APPLY FOR A
GRANT, AND WE'RE ADJUSTING OUR
DATA COLLECTION SYSTEM SO WE CAN
START CAPTURING THAT DATA AS
WELL. TRIPLE DAYS AFTER YOU
RECEIVE A INSPECTION AND THERE'S
VEGETATION THAT WE'RE SUGGESTING
THAT YOU REMOVE SOMETIMES THE
REMOVAL OF THAT VEGETATION
TAKING CARE OF IT IS ONE OF THE
MOST EXPENSIVE ITEMS WE CAN SIGN
UP FOR CHIPPER DAYS. TRUCK PULLS
UP, PICKS IT UP FOR YOU HAULS IT
AWAY LAST YEAR. WE UH CALLED
AWAY OVER 1000 DUMP TRUCKS WORTH
OF MATERIAL. THIS YEAR. WE'RE
ABOUT 60% OF HEAD OF WHAT WE
WERE WE WERE LAST YEAR. AND IN
PUBLIC EDUCATION, TREMENDOUS
AMOUNT OF EFFORT GOING TOWARDS
THE PUBLIC EDUCATION, BUT THAT
BOTTOM LEFT PICTURE IS MY
FAVORITE FORM OF PUBLIC
EDUCATION. AND THAT'S IN OUR
INSPECTORS MEETING WITH OUR
RESIDENTS. THAT IS THE BEST WAY
. WE ALSO HAVE AMBER STOP, WHICH
IS A WILDFIRE FESTIVAL. UH LAST
YEAR. WE HAD 2000 PEOPLE ATTEND
THIS YEAR WE HAD 5000 PEOPLE
ATTEND AND THE PEOPLE THE
VENDORS AND CONTRACTORS WHO COME
TO THAT FESTIVAL HAVE SAID THAT
MORAN IS THE MOST WELL INFORMED
WHEN IT COMES TO WILD FIRE
SAFETY IS THAT ABOUT ANY OF THE
COMMUNITIES HAVE GONE TO, AND WE
THINK THAT IS AN INDICATION OF
THE SUCCESS OF OUR PUBLIC
EDUCATION. EVACUATION ROUTE
CLEARING THE PICTURE SAYS IT
ALL. I WON'T EVEN SAY ANYMORE,
BUT WE'RE DOING A LOT EVACUATION
ROUTE CLEARANCE THROUGHOUT
MORAN. THIS IS ONE THING. THAT'S
NOVEL. I DON'T KNOW OF ANYONE
ELSE WHO HAS DONE THIS, BUT
WE'VE ALSO CONDUCTED EVACUATION
INGRESS EGRESS RISK ASSESSMENT,
EVALUATING EVERY ROADWAY WITHIN
OUR JOINT POWERS AUTHORITY. NOT
JUST FOR WILDFIRE THREAT BUT
ALSO ITS ABILITY TO COMMUNICATE
CARS UP AND DOWN THE ROAD. ARE
THERE PARKING PROBLEMS ARE THERE
TRAFFIC CONTROL ISSUES? WE'RE
ALSO LOOKING AT OUR
COMMUNICATIONS NETWORK. IF WE
CAN'T GET THE EVACUATION
NOTIFICATIONS OUT TO PEOPLE HOW
HOW DO THEY KNOW TO EVACUATE?
WE'RE ALSO MODELING HOW PEOPLE
BEHAVE DURING EVACUATIONS. SO
THIS WAY WE NOT ONLY KNOW IF THE
ROAD IS RISKY. WE KNOW WHY THAT
ROAD IS RISKY. AND NOW WHEN YOU
KNOW WHY YOU CAN ACTUALLY DO
SOMETHING TO FIX THAT AND MAKE
EVACUATIONS THAT MUCH SAFER. OF
COURSE, WE HAVE TO HAVE
PRESCRIBED HERBIVOROUS OR, YOU
KNOW, GRAZING. SHADED FUEL
BREAKS ALONG THE WILDLAND URBAN
INTERFACE BOUNDARIES, ONE OF THE
THINGS THAT WE'RE DOING QUITE A
BIT OF 22 OF OUR PROJECTS ARE
SHADED FUEL BREAKS, BUT WHAT
THEY REALLY ARE INCREASING
DEFENSIVE SPACE ALONG THE WHILE
ON URBAN INTERFACE BOUNDARY FROM
1 TO 300 FT. WE'RE NOT EXPECTING
TO SHADED FUELED BRAKES TO STOP
THE FIRE. WE'RE EXPECTING TO
SHADED FUEL BREAKS TO DECREASE
THE FIRE INTENSITY DECREASED THE
RATE OF SPREAD, AND IT INCREASES
THE AMOUNT OF TIME THAT OUR
RESIDENTS HAVE TO SAFE DUE TO
EVACUATE AND UNDER A SAFER
ENVIRONMENT AND PROVIDES ACCESS
FOR FIREFIGHTERS TO ACTUALLY GO
IN THERE AND SUPPRESS FIRE. IT
WORKS BOTH FOR THE SMALL FIRES
AT THREE ACRE FIRE. THEY KISSED
ON TOP OF THE HOUSE FASTER THAN
FIRE ENGINE DOES, BUT IT ALSO
SUPPORTS US DURING THESE MEGA
FIRES AS EMBERS ARE BROADCAST
FROM THE APPROACHING FIRE AND
LAND INITIATED FUEL BREAK,
THEY'RE LESS LIKELY TO IGNITE A
NEW, INTENSE WILDFIRE UP AGAINST
OUR WOY BOUNDARY. AND THE
GREATER ROSS VALLEY SHADED FUEL
BREAK 16 OR 38, MILES. WE'VE
THAT THAT DATA OUT THERE IS
ACTUALLY WRONG. WE'RE ABOUT 22
23 MILES COMPLETED. AND THEN WE
HAVE A 60 MILE PROJECT IN NOVATO
THAT WE'VE STARTED. WE'RE ABOUT
5 TO 7 MILES IN THERE. WE ARE
USING SCIENCE TO MODEL WHERE
WE'RE PUTTING THESE SHADED FUEL
BREAKS. HOW WIDE THEY NEED TO GO
. BUT ALSO WE KNOW THAT WE CAN'T
DO IT ALL AT ONCE, SO WE'RE
USING MODELING DEPICTED THE
RISKIEST AREAS AND WE'RE HITTING
THE RISKIEST AREAS FIRST. AND
THEN FINALLY, ONE OF THE TYPES
OF PROJECTS WE'RE DOING OUR
STRATEGIC PLACE LOCAL AREA
TREATMENTS. THIS IS A EXAMPLE OF
SAN RAFAEL SAN ANSELMO. UH,
SPLAT. AND IT'S IN AN AREA THAT
HAS A LOT OF FIRE HISTORY. AND
YOU CAN SEE THAT FIRES WILL GET
ONTO THE COMMUNITY VERY, VERY
QUICKLY THERE. AND WITH THE
ONSHORE FLOW, PUSHING FIRES.
WE'VE HAD NUMEROUS FIRES THAT
STARTED TO THE LEFT OF THIS
PICTURE AND TRANSITION THROUGH
THAT AREA THAT WE'RE PLANNING
INTO THE CREATE THE SPLAT AS
IMPACTED HOMES IMMEDIATELY. SO
NOW WE'RE WORKING ON A PROJECT
THAT WE WILL START NEXT SPRING.
WE'RE NOT REMOVING ALL THE TREES
AND VEGETATION IN THERE. WHAT
WE'RE DOING IS WE'RE THINNING
IT. WERE REMOVING THE DEAD AND
DOWN. AND SO AS THE FIRE
APPROACHES THAT SPLAT AGAIN,
IT'S INTENSITY GOES DOWN.
RESIDENTS HAVE MORE TIME TO
EVACUATE UNDER SAFER CONDITIONS,
AND OUR FIREFIGHTERS HAVE A
CHANCE TO SUCCEED. THAT I CAN
PASS IT ON TO THE NEXT SPEAKER.
QUESTIONS AT THE END OF THIS
PANEL AGAIN SO WELL NEXT YEAR
FROM MIKE NOONAN, MANAGER OF
TRAINING, COMPLIANCE AND
ASSESSMENT FOR WILDFIRE DEFENSE
SYSTEMS. AND THEN FROM MIKE
PETERSON, DEPUTY COMMISSIONER
FOR CLIMATE AND SUSTAINABILITY
AT THE CALIFORNIA DEPARTMENT OF
INSURANCE. MR NOONAN, WELCOME.
GOOD AFTERNOON, MADAM CHAIR, MR
CHAIR MEMBERS. APPRECIATE BEING
HERE AS YOU INTRODUCED ME. I'M
MIKE NINA AND I AM HERE ON
BEHALF OF WILDFIRE DEFENSE
SYSTEMS THAT I MAY REFER TO THAT
AS WDS AND PRESENTATION. SO
THANKS AGAIN FOR INVITING US OR
I SPENT I ENTERED THE FIRE
SERVICE IN 1979 RETIRED AS UNIT
CHIEF ATOMIC CALIBERS UNIT. CAL.
FIRE UM, ACTUALLY WORKED OVER
HERE IN MY CAREER. THREE
DIFFERENT ASSIGNMENTS, SOME
PRETTY FAMILIAR WITH YOUR
COUNTRY, SO IT'S NICE TO HEAR
SOME OF THE WORK THAT'S GOING ON
AROUND HERE. IT'S AN HONOR TO BE
HERE. UM THROUGHOUT MY FIRE
SERVICE CAREER, I PICKED UP THE
SERVICE DOG. THIS IS RIVER DOWN
HERE. SHE HAD COS COS ME
WHEREVER I GO, AND SHE'S DOING
PRETTY GOOD TODAY. SHE'S GOT A
LITTLE TRAINING GOING ON. SO
THANKS FOR HAVING RIVER AS WELL.
SO WHAT'S WDS OR WILDFIRE
DEFENSE SYSTEMS? WHAT WE ARE IS
A QUALIFIED INSURANCE RESOURCE.
AND I'M NOT GOING TO BORE YOU
WITH TRYING TO EXPLAIN THAT. BUT
I'M GOING TO READ YOU WHAT
YOU'RE LOGGED CLAIMS THAT WE ARE
AND WE ARE PERSONNEL AND
EQUIPMENT WORKING FOR OR
CONTRACTED BY AN INSURANCE
COMPANY. WITH A MISSION TO
MITIGATE RISK TO ENSURED
STRUCTURES AND OPERATING AND
COMPLIANCE WITH INSTRUCTION AND
OVERSIGHT OF THE INCIDENT,
COMMAND OR INCIDENT MANAGEMENT
TEAM OF THE AUTHORITY HAVING
JURISDICTION SO THIS SERVICE
THAT WE PROVIDE. IT'S KEY TO
KNOW THAT THIS IS AVAILABLE TO
ALL OF OUR INSURED. ALRIGHT THE
RICH DON'T COME FIRST AND TAKE
PRECEDENCE IF THEY HAVE A POLICY
WRITTEN INTO THE, UH, INSURANCE
COMPANY THAT WE, UH CONTRACT
WITH WE GO OUT AND PROVIDE
SERVICES. SO OUR MISSION IS
PROTECTING INJURED PROPERTIES
FROM DESTROYED BEING DESTROYED
OR DESTRUCTION FROM WILDFIRE.
AND HERE IN CALIFORNIA. UM IF
THERE IS A SIGNIFICANT FIRE IN
CALIFORNIA THESE DAYS AND 2023
AND THEIR STRUCTURES THREATEN
WILDFIRE DEFENSE SYSTEMS IS
PROBABLY THERE. OKAY, IT'S
BECOMING MORE THAN NORM. THIS IS
A PICTURE OF OUR UH, NATIONAL
COORDINATION CENTER IN BOZEMAN,
MONTANA. NOT ONLY DO WE HAVE
SERVICES IN CALIFORNIA, BUT
WE'RE IN 21 OTHER STATES, SO WE
COVERED 22 STATES AND CALIFORNIA
ITSELF. WE HAVE REGIONAL
COORDINATION CENTER AND
RIVERSIDE, ONE IN VISALIA,
CALIFORNIA AND ONE IN SACRAMENTO
, AND WE HAVE A LOT OF ASSETS
THAT WE DEPLOY. THE NATION'S WE
ARE THE NATION'S LARGEST
PROVIDER OF WILDFIRE RESPONSE
SERVICES FOR INSURANCE
COMPANIES. WE MEASURE COVERAGE
OR MEASURED BY COVERAGE AREA AND
WILD FIREFIGHTING RESOURCES AND
ASSET IF YOU COMPARED US TO ALL
THE OTHER UM AGENCIES OR
WILDFIRE PRODUCERS WERE NUMBER
THREE, NEXT TO THE FEDERAL
GOVERNMENT AND THE STATE OF
CALIFORNIA. IN 2023, OUR SERVICE
COVERED IN EXCESS OF 2.5 MILLION
CALIFORNIA SINGLE FAMILY HOMES.
WHAT WE DO IN WDS IS WE DO
WILDFIRE MONITORING. WE'VE GOT A
SOPHISTICATED, UH, SYSTEM SET UP
IN THAT NATIONAL COORDINATION
CENTER THAT YOU SAW A PICTURE OF
SLIDE BEFORE LAST. WE HAVE A LOT
OF PEOPLE STAFFING THAT WE'RE
MONITORING FIRES IN THE 22
STATES THAT WE MENTIONED
CALIFORNIA'S OUR BUSIEST, UH,
STATE BY FAR ALRIGHT, WE ACCESS
COORDINATION. SO ONCE WE
DISCOVER THERE'S A FIRE. WE DO A
SMOKE CHECK ON IT. WE FEEL THAT
WE HAVE ASSETS AT RISK. WE
DEPLOY WE GO OUT AND PERFORM PRE
FIRE FRONT MITIGATION, AND THIS
IS VERY DIFFERENT. IT'S A NEW
CONCEPT. WE'RE UH WE'RE NOT HERE
DOING STRUCTURE PROTECTION.
WE'RE DOING MITIGATION. THIS
NEXT BULLET POINT SAYS WE DO
STRUCTURE PROTECTION, BUT WHAT
WE REALLY DO IS STRUCTURE
PREPARATION. WE'RE INTERRUPTING
THAT CHAIN. YOU'VE HEARD THAT
CHAIN OF EVENTS THAT HAPPENS TO
THAT LEAD FROM THE VEGETATION.
WITHIN THE WOODY THAT LANDS INTO
THE STRUCTURE AND THEY GO
STRUCTURE STRUCTURE WERE THERE
TO INTERRUPT THAT CHAIN OF
EVENTS. WE ALSO HANG AROUND AND
DO POST FIRE FRONT MITIGATION,
SO WE MAKE SURE THAT THERE'S NOT
REKINDLES AND WE MAKE SURE THE
FIRE IS FULLY EXTINGUISHED. WE
WORK HAND IN HAND. WITH AGENCIES
THAT HAVE JURISDICTION. WE'VE
ASKED THEIR PERMISSION TO GET ON
FIRE. WE PROVIDE THEM
INFORMATION ABOUT OUR ASSETS,
INCLUDING ADDRESSES WITHIN THEIR
INCIDENT AND THEIR HAZARD. UH,
AREA. WE HAVE A WHOLE TEAM THAT
I MENTIONED FOLKS AND BOZEMAN.
WE HAVE A LOT OF ENGINEERS AND
FOLKS THAT ARE DOING REALLY GOOD
WORK AND COMING UP WITH NEW
WAYS, UH, AND INNOVATIVE WAYS,
AND SOME OF THE SIMPLE TACTICS
THAT WE DO IS WE'LL GO OUT AND
WE'LL COVER VENTS. IN ADVANCE OF
THE WILD, WILD FIRE THAT MAYBE
THREATEN TO STRUCTURE. THE
REASON FOR THAT IS TO KEEP
MEMBERS FROM ENTERING INTO THE
STRUCTURE WILL CLOSE UP ANY
OTHER OPENINGS. THAT MIGHT BE,
UM, AN AVENUE TO ACCESS THE
STRUCTURE AND START TO STRUCTURE
ON FIRE. THE SECOND SLIDER, THE
MIDDLE SLIDE. THERE'S WE REMOVED
COMBUSTIBLE DEBRIS. THIS IS AN
EXAMPLE OF THIS, ESPECIALLY, YOU
KNOW WHERE I COME FROM, AND
TWELLMAN COUNTY PINE PINE LITTER
IS A SIGNIFICANT PROBLEM. THIS
IS SOMETHING THAT WILL MITIGATE
IN ADVANCE OF THE FIRE. WE HAVE
SOME FANCY DEVICES ON OUR LEAF
BLOWERS, SO WE GET UP AND RAIN
GUTTERS AND REMOVE VEGETATION
FROM THAT SEEMS PRETTY SIMPLE,
VERY EFFECTIVE, LIKE 99%
EFFECTIVE. CREATING SAFE ZONES
OR SOMETHING ELSE WE DO IN FRONT
OF THE PRE FIRE FRONT
INTERVENTION. WE DEPLOY
SPRINKLER SYSTEMS THAT COMES
WITH A COLLAPSIBLE, UH, TANK
THAT WILL DEPLOY AND THEN WE
APPLY RETARDANT AT TIMES AND AS
WE'RE SPEAKING RIGHT NOW WE'RE
TESTING NEW PRODUCT UP IN
BOZEMAN AND OUR ENGINEERS ARE
DOING SOME, UH, TESTING ON A NEW
PRODUCT THAT WE'RE LOOKING TO.
PUT INTO SERVICE FAR SEASON
2024. SO OUR INNOVATION IS REAL
, SOME OF ITS SIMPLE SOME OF ITS
HIGH TECH BUT THE OUTCOME IS
FANTASTIC. AND THE PRINCIPLES
ARE VERY SIMPLE. AGAIN AFTER
PART OF THE POST FIRE FRONT
INTERVENTION THAT WE DO. I
MENTIONED IT. HOT SPOT
MITIGATION. WE HANG AROUND AND
WE'LL MAKE SURE THE FIRE IS
FULLY EXTINCT. EXTINGUISHED IF
WE DO HAVE FLARE UPS IN AREAS
AND ONE OF OUR PROPERTIES WILL,
UH, DEAL WITH THOSE AND THEN WE
REHAB THE PROPERTY, AND, UH, ONE
OF THE NEATEST THINGS THAT WE DO
IS WE'RE PROVIDING REAL TIME
PHOTOGRAPHS AND INFORMATION TO
OUR INSURANCE, UH, CONTRACTORS,
AND THEY'RE IN CONTACT WITH THE
HOMEOWNER AND THE HOMEOWNERS
GETTING REAL LIFE DATA AND
INFORMATION ABOUT THEIR HOME.
AND YOU CAN'T BELIEVE THE
LETTERS OF APPRECIATION THAT WE
GET. YOU KNOW, WHEN WE WERE ALL
FIREFIGHTERS, AND I WAS GROWING
UP AS AN INCIDENT COMMANDER ON
ITS COMMAND TEAM AND OPERATIONS
SECTION CHIEF ANA, CALIF IRON
TEAM I WAS TELLING ONE OF MY
PARTNERS IN THE BACK HERE. IT
USED TO BRING TEARS TO MY EYES
WHEN WE GET READY TO LEAVE A
FIRE, AND THERE WAS THANK YOU
FIREFIGHTERS SIGNS THAT WERE UP
THERE. IT REALLY MEANT A LOT.
YOU KNOW YOU SPEND SEVERAL WEEKS
SOMETIMES MONTHS BACK IN THE DAY
ON THESE INCIDENTS AND TO GET
THAT RECOGNITION THAT'S NOT WHAT
WE DO IT FOR. BUT THAT'S THE
KIND OF RECOGNITION AND THE
APPRECIATION. THAT OUR
FIREFIGHTERS WITHIN WDS IS
GETTING IT YOU I WISH I WROTE
HAD SOME TIME TO READ SOME OF
THESE LETTERS FOR YOU. THIS IS
NEW AND INNOVATIVE, AND IT'S
VERY MUCH APPRECIATED BY THE
HOMEOWNERS IN CALIFORNIA. SO
WHAT WE HAVE AT OUR ASSETS WE
HAVE OVER 500 WILDFIRE SERVICE
EXPERTS AND PROFESSIONALS. I'VE
TALKED ABOUT SOME OF THEM THEY
FROM FIREWATCH COMMANDERS TO
ENGINEERS, UH, TO DISPATCHERS TO
PEOPLE THAT TRACK THE RESOURCES
. WE HAVE 180 QUALIFIED
INSURANCE RESOURCES THAT ARE
DISPOSAL. UM INTERESTING THING
IS, WE'RE ONE OF THE ONLY
PRIVATE INDUSTRIES THAT'S
AFFILIATED WITH THE
INTERNATIONAL ASSOCIATION
FIREFIGHTERS, LOCAL 96 SO OUR
FIREFIGHTERS ARE UNION MEMBERS
AND WE SINCE OUR INCEPTION.
WE'VE MONITORED OVER 100,000
FIRES. WE'VE DISPATCHED
RESOURCES AND PROTECT PROVIDED
STRUCTURE PROTECTION SERVICES
FOR INSURERS. ON OVER 1200
WILDFIRES SINCE 2008 WE'VE
SERVED OVER 33,000 INDIVIDUAL
PROPERTIES SINCE 2017 YOU SEE A
CORRELATION HERE. AND WE HAVE
DONE THIS SET OF SUCCESS RATE
WHERE WE'VE INTERVENED ON
PROPERTIES AT A 99.6 SURVIVAL
RATE. OUR BROAD FOOTPRINT, UH,
LENDS US TO THE ABILITY TO, UH,
WHICH HAS HAPPENED, UM, BEEN ON
26 SEPARATE FIRES IN FIVE
DIFFERENT STATES ALL IN THE SAME
DAY. UM WILDFIRE MONITORING AND
DISPATCHING OF MENTIONED THAT
ALREADY, WDS NATIONAL
COORDINATION CENTER IS OPEN 365
DAYS A YEAR WERE STAFFED WITH
FIRE BEHAVIOR. ANALYST FIRE
OFFICERS PROGRAMMERS DATABASE
SPECIALIST G. I S SPECIALISTS,
PROFESSIONAL SERVICES DIVISION
AND DATA SCIENCE AND ENGINEERING
TEAMS. WE MONITOR FOR WILDFIRE
INCIDENTS WHILE FIRE WEATHER.
FIRE ACTIVITY, FUELS CONDITIONS
, LOCAL RESOURCES AND ACTIVITIES
. I WISH I COULD PUT YOU IN THE
CAR AND TAKE YOU TO OUR NATIONAL
COORDINATION CENTER IS PRETTY
IMPRESSIVE. YOU HAVE SOME THINGS
THAT RIVAL THAT HERE IN
CALIFORNIA. OBVIOUSLY WITH. OH,
YES. AND CAL FIRES, UH, TWO
DIFFERENT REGIONS, CONTINUOUS
INTEL EXCHANGE WITH FIELD
OPERATIONS HAPPENS ALL THE TIME.
WE'RE FEEDING INFORMATION BACK
INTO THE NATIONAL NATIONAL
COORDINATION CENTER FLOWS BACK
OUT TO OUR RESOURCES ON THE ON
THE GROUND, AND OBVIOUSLY WE ARE
VERY PROUD OF THE STATE. THEY
ARE INFORMATION AND INTELLIGENCE
CENTER THAT WE HAVE. SO IN
CONCLUSION, UH, YOU KNOW, I WAS
TALKED OUT OF RETIREMENT BECAUSE
THIS THING IS PRETTY SPECIAL AND
TAKE A LOT OF PRIDE IN WHAT
WE'RE DOING. THE FOLKS THAT WERE
TRAINING AND THE INNOVATIONS
THAT WERE COMING UP WITH THE
STATE OF THE ART SECOND TO NONE
AND AGAIN. WE'RE THE LARGEST
SUCH COMPANY IN THE UNITED
STATES. AND I SEE THIS AS, UH,
ANOTHER TOOL IN YOUR TOOLBOX FOR
THIS VERY IMPORTANT TOPIC THAT
YOU'RE TALKING ABOUT, YOU KNOW,
SINCE 1979 I'VE SEEN A COMPLETE,
UH CHANGED THE LANDSCAPE OF WILD
LAND FIRES IN CALIFORNIA. THANK
YOU VERY MUCH FOR YOUR TIME.
APPRECIATE IT. THANK YOU. WE'RE
GOING TO GO NEXT TO MR PETERSON.
GOOD AFTERNOON. THANK YOU VERY
MUCH FOR HAVING ME. I AM MIKE
PETERSON AND I SERVE AS DEPUTY
COMMISSIONER FOR CLIMATE AND
SUSTAINABILITY AT THE CALIFORNIA
DEPARTMENT OF INSURANCE UNDER
THE LEADERSHIP OF INSURANCE
COMMISSIONER RICARDO LARA.
COMMISSIONER LARA IS THE
REGULATOR OF THE INSURANCE
MARKETS IN THE STATE OF
CALIFORNIA, WHICH IS THE FOURTH
LARGEST INSURANCE MARKET IN THE
WORLD. TODAY I WAS ASKED BY THE
COMMITTEES TO RESPOND TO THE
VERY TIMELY QUESTION OF HOW CAN
CALIFORNIA BECOME MORE RESILIENT
TO WILDFIRES. THIS QUESTION IS
CENTRAL TO HOW THE DEPARTMENT
HAS APPROACHED THE CHALLENGES
POSED BY CLIMATE INTENSIFIED
WILDFIRE RISKS FOR INSURANCE
AVAILABILITY IN OUR STATE. I'M
ALSO PLEASED TO PROVIDE THESE
FOLLOW UP REMARKS FROM WHEN I
TESTIFIED BEFORE THE ASSEMBLY
SELECT COMMITTEE ON WILDFIRE
PREVENTION AT ITS INFORMATIONAL
HEARING HELD EARLIER THIS SUMMER
REGARDING THE SIMILAR TOPIC. THE
OVERARCHING APPROACH OF
COMMISSIONER LARA HAS ALWAYS
BEEN TO PRIORITIZE REDUCING
RISKS TO CALIFORNIA COMMUNITIES
. THE DEPARTMENT OF INSURANCE
HAS FOCUSED ON MULTI YEAR EFFORT
ON ENGAGING WITH CONSUMERS AND
STAKEHOLDERS AS IT ASSESSES HOW
NEW TOOLS CAN IMPROVE RISK
MANAGEMENT, MAKE RESIDENTIAL AND
COMMERCIAL INSURANCE MORE
ACCESSIBLE AND RELIABLE FOR
CALIFORNIANS AND MAINTAIN
COMPETITION AND ENSURE STABILITY
IN THE STATE'S INSURANCE
MARKETPLACE. THE DEPARTMENT HAS
BEEN VERY CLEAR THAT BENEFITS TO
AND PROTECTION OF CONSUMERS ARE
OF THE UTMOST IMPORTANT.
IMPORTANCE AS WE STRIVE TO MEET
THE INTERLOCKING GOALS OF
COMMISSIONER LARA. NAMELY MAKING
INSURANCE MORE AVAILABLE TO
CALIFORNIANS. CREATING A
RESILIENT INSURANCE MARKET. AND
PROTECTING COMMUNITIES FROM
CLIMATE CHANGE. TODAY THE FOCUS
OF MY TESTIMONY WILL BE
COMMISSIONER LARS SAFER FROM
WILDFIRES FRAMEWORK, AND NOW
IT'S IN 2021, WHICH HAS BEEN A
COLLABORATION AMONG THE STATES
WILDFIRE PREPAREDNESS AGENCIES
TO COMMUNICATE HOME HARDENING
AND COMMUNITY MITIGATION ACTIONS
TO CALIFORNIANS AND THE
SUBSEQUENT CONTINUED STRIDES
MADE AS A RESULT OF THIS
FRAMEWORK. WILDFIRE RISK
REDUCTION IS THE RESULT OF THE
COMBINED WORK OF ENTIRE
COMMUNITIES, NEIGHBORHOODS AND
INDIVIDUALS TO TAKE THE ACTIONS
NECESSARY TO MAKE US ALL SAFER
AND IT'S CRITICAL FOR INSURANCE
AVAILABILITY, AFFORDABILITY AND
RELIABILITY. WE'VE HEARD MANY
EXAMPLES ALREADY TODAY ON THE
COMBINED EFFORTS THAT ARE
ONGOING IN OUR STATE. INSURANCE
HAS HISTORICALLY BEEN ABOUT
PRICING RISK AND BEING A SOURCE
OF RESILIENCE FUNDING THAT
OCCURS AFTER A DEVASTATING
WILDFIRE. WHAT WE'RE DOING AT
THE DEPARTMENT OF INSURANCE IS
TAKING SPECIFIC ACTIONS SO THEY
INSURANCE INCENTIVIZES RISK
REDUCTION BEFORE DISASTER OCCURS
, SAVING LIVES, REDUCING LOSSES
AND BRINGING DOWN COSTS. THE
SAVIOR FROM WILDFIRES PROGRAM
WAS LAUNCHED IN 2021 BY
COMMISSIONER LARA CONVENING THE
MAJOR WILDFIRE PREPAREDNESS
AGENCIES, AND I'LL LIST THEM
BRIEFLY. THE GOVERNOR'S OFFICE
OF EMERGENCY SERVICES WHAT WE
CALL CALLOW YES, THE GOVERNOR'S
OFFICE OF PLANNING AND RESEARCH
, THE CALIFORNIA PUBLIC
UTILITIES COMMISSION AND CAL
FIRE AND I APPRECIATE THE EFFORT
BY EVERY AGENCY ON THIS. OVERALL
INITIATIVE. OUR GOAL WAS TO
ESTABLISH A LIST OF HOME
HARDENING COMMUNITY MITIGATION
ACTIONS THAT WERE BASED IN FIRE
SCIENCE. IN ONE YEAR'S TIME WE
MET WITH THE RESEARCH EXPERTS
FROM THE INSTITUTE FOR BUSINESS
AND HOME SAFETY, THE UNIVERSITY
OF CALIFORNIA CONSUMER GROUPS,
INSURANCE, TRADE ASSOCIATIONS,
FIRE CHIEFS AND WILD FIRE SAFETY
EXPERTS, AMONG OTHERS. THE
INSTITUTE FOR BUILDING AND HOME
SAFETY IS A RESEARCH
ORGANIZATION THAT TESTS HOME
HARDENING STRATEGIES AND IN
TERMS OF THOSE THAT ARE MOST
EFFECTIVE TO REDUCE LOSSES TO
STRUCTURES. THE UNIVERSITY OF
CALIFORNIA HAS RESEARCHERS
ACROSS THE STATE THAT ARE
STUDYING WILDFIRE, RISTIC
COMMUNITIES AND DEVELOPING
STRATEGIES THAT BRING DOWN THAT
RISK. IN EARLY 2022, THE PARTNER
AGENCIES PUBLICLY ANNOUNCED THE
SAVER FROM WILDFIRES FRAMEWORK,
A CONSENSUS OF CORE HOME
HARDENING ACTIONS AND COMMUNITY
MITIGATION DESIGNATIONS. ACTIONS
THAT ARE CLEAR AND CONSISTENT,
EFFECTIVE AND ACHIEVABLE. THE
ACTIONS RECOGNIZED THAT WE NEED
STRUCTURE HARDENING. WE NEED TO
WORK OUTWARD FROM THE STRUCTURE
TO THE SURROUNDING PROPERTY AND
ALSO TOGETHER WITHIN OUR
COMMUNITIES. STARTING FROM THE
STRUCTURE ITSELF. THERE ARE SIX
STRUCTURE LEVEL ACTIONS IN
SAVING FROM WILDFIRES CLASS A
FIRE RATED ROOF. 5 FT MEMBER
RESISTANCE ZONE AROUND THE
STRUCTURE AND NON COMBUSTIBLE
SIX INCHES AT THE BOTTOM OF
STRUCTURE WALLS. AMBER AND FIRE
RESISTANT EVENTS. DOUBLE PANE
WINDOWS ARE ADDED SHUTTERS AND
ENCLOSED EAVES. SOME OF THOSE
ACTIONS, LIKE REPLACING EVENTS
CAN BE RELATIVELY ECONOMICAL AND
CAN BE ACCOMPLISHED RATHER
QUICKLY IN A DAY OR A WEEKEND.
OTHER ACTIONS WILL TAKE LONGER.
THE KEY HERE IS FOR CONSUMERS TO
GET STARTED. MANY LOCAL FIRE
CHIEFS AND LOCAL FIRE DISTRICTS
ARE PROVIDING IMPORTANT
COORDINATION AND ENCOURAGEMENT
FOR HOMEOWNERS AND BUSINESS
OWNERS. MOVING OUTWARD FROM THE
STRUCTURE INTO THE AREA
IMMEDIATELY SURROUNDING THERE
ARE THREE ACTIONS AND SAFER FROM
WILDFIRES FIRST CLEARED
VEGETATION AND DEBRIS FROM UNDER
DECKS. SECOND SHEDS THAT ARE
MOVED. SHEDS OR OUTBUILDINGS
THAT ARE MOVED AT LEAST 30 FT
AWAY AND THIRD TRIMMING OF TREES
AND REMOVING OF RUSSIAN
COMPLIANCE WITH STATE AND LOCAL
DEFENSIBLE SPACE LAWS. AND THEN
FINALLY MOVING FROM THE
INDIVIDUAL PARCEL LEVEL TO RISK
MITIGATION FOR THE ENTIRE
COMMUNITY. THERE ARE TWO
COMMUNITY LEVEL DESIGNATIONS
THAT ARE RECOGNIZED AND SAVE HER
FROM WILDFIRES. FIRST
NEIGHBORHOODS THAT FORM OF FIRE
WISE USA COMMITTEE COMMITTEE
COMMUNITY OF WHICH THERE ARE
OVER 700 IN OUR STATE. UM AND
THEN, SECONDLY, CITIES, COUNTIES
AND LOCAL DISTRICTS CAN BECOME
CERTIFIED AS A FIRE RISK
REDUCTION COMMUNITY, WHICH IS A
DESIGNATION ESTABLISHED IN STATE
LAW AND IMPLEMENTED BY THE
CALIFORNIA BOARD OF FORESTRY AND
FIRE PROTECTION. WHAT I VERBALLY
SHARED JUST NOW IS ESSENTIALLY
THE LIST OF HOME HARDENING
COMMUNITY MITIGATION ACTIONS
THAT ARE INCLUDED IN SAFER FROM
WILDFIRES, WHICH IS ALSO
ADDITIONALLY OUTLINED IN THE
COMMITTEE'S BACKGROUND PAPER.
FOR THOSE COMMUNITIES FACING
WILDFIRE AT RISK. THIS FRAMEWORK
CAN BE USED TO FOCUS EFFORT ON
THE CONSENSUS ACTIONS OF THE
FIVE PARTNER AGENCIES. OUR NEXT
STEP WAS TO MAKE SAFER FROM
WILDFIRES MOST IMPACTFUL TO
INSURANCE, CONSUMERS AND THE
PUBLIC IN 2022 COMMISSIONER LARA
UNDER HIS AUTHORITY AS
CALIFORNIA'S INSURANCE
COMMISSIONER, FINALIZED THE
FIRST EVER REGULATIONS BY ANY U
. S STATE TO REQUIRE HOMEOWNERS
AND COMMERCIAL INSURANCE
COMPANIES TO PROVIDE INCENTIVES
TO POLICYHOLDERS WHO TAKE THESE
HOME BUSINESS AND COMMUNITY
HARDENING ACTIONS. THIS PROCESS
INCLUDED PUBLIC WORKSHOPS AND
INCORPORATED THE SAVIOR FROM
WILDFIRES FRAMEWORK. IN ADDITION
TO WILDFIRE MITIGATION, THIS
REGULATION IS NOW REQUIRING
INSURANCE COMPANIES TO PROVIDE
CONSUMERS WITH THE PROPERTIES
RISK SCORE. ANY RIGHT TO APPEAL
THAT SCORE. THE REGULATIONS WERE
FINALIZED IN OCTOBER. 2022 AND
INSURANCE COMPANIES HAVE TO FILE
NEW RATE FINANCE BY APRIL 2023
IN ORDER TO COMPLY WITH THESE
RULES. THE REAL ESTATE THAT
INSURANCE COMPANIES MUST
INCENTIVIZE RISK PRODUCTION FOR
EACH AND EVERY ACTION ON THIS
LIST. THAT MEANS THAT THE MORE
WORK YOU DO, THE MORE YOU CAN
SAVE THIS WILL BE AN ONGOING
INCENTIVE TO HARDEN HOMES AND
BUSINESSES AND INVEST FURTHER IN
COMMUNITY RISK REDUCTION ACROSS
OUR STATE. THIS REGULATION IS
ONE STEP IN WHAT HAS BEEN A FOUR
YEAR EFFORT TO ENCOURAGE HOME
HEARTENING. IN 2018. ONLY 7% OF
THE STATE'S POLICYHOLDERS HAD
ACCESS TO HOME HARDENING
INCENTIVES. BY 2021. THAT NUMBER
HAD GROWN TO 40% OF
POLICYHOLDERS. THE NEW WILDFIRE
MITIGATION REGULATION BEING
IMPLEMENTED BY THE DEPARTMENT
WILL ENSURE THAT 100% OF
POLICYHOLDERS HAVE ACCESS TO
THESE INCENTIVES. ONE KEY HERE
IS THAT HOME AND HOMES,
BUSINESSES AND COMMUNITY HARDLY
ACTIONS THAT ARE CONTAINED IN
OUR REGULATIONS ARE CONSISTENT
ACROSS INSURANCE COMPANIES. THIS
WILL HELP GIVE CONSUMERS THE
CONFIDENCE THAT THEIR
INVESTMENTS AND RISK REDUCTION
WILL BE REWARDED. EVERY
INSURANCE COMPANY WRITING,
RESIDENTIAL OR COMMERCIAL
COVERAGE IS REQUIRED TO PROVIDE
THESE INCENTIVES. THE IMPORTANT
THING IS TO ENCOURAGE HOMEOWNERS
AND BUSINESSES TO GET STARTED
WITH WHAT IS ACHIEVABLE TODAY
AND THEN WORK FROM THERE. WE
HAVE AN OUTREACH AND EDUCATION
TEAM THAT IS WORKING WITH
COMMUNITIES AND STAKEHOLDERS ALL
ACROSS THE STATE TO ASSIST
CONSUMERS WITH QUESTIONS ON THIS
ISSUE, SPECIFICALLY I ALSO WANT
TO EMPHASIZE EMPHASIZED THE
IMPORTANCE OF ALIGNMENT ACROSS
AGENCIES, STATE. PRICING WILL BE
ONE INCENTIVE, BUT THERE WILL BE
STATE GRANTS AND LOCAL GRANTS
THAT CAN HELP NEIGHBORHOODS AND
HOMEOWNERS ACHIEVE THE ACTIONS
AND SAVIOR FROM WILDFIRES. SOME
OF THESE ACTIONS ARE NOT NEW.
BUT WHAT IS NEW IS THAT
COMMISSIONER LARS NEW WILDFIRE
MITIGATION REGULATIONS ARE
MAKING RISK REDUCTION ACTIONS
MORE CLEAR AND REQUIRING
INCENTIVES THAT INCREASE
ADOPTION OF HOME HARDING ACTIONS
THAT SAVE LIVES AND PROPERTY. IN
CLOSING THE SAFER FROM WILDFIRES
FRAMEWORK IS AN ESSENTIAL PIECE
OF MAKING CALIFORNIA MORE
RESILIENT TO WILDFIRES AND
SUPPORTS COMMISSIONER LARS
RECENTLY ANNOUNCED SUSTAINABLE
INSURANCE STRATEGY. I DO WANT TO
BRIEFLY NOTE THAT IN THE
BACKGROUND OR THAT THERE ARE
SPECIFIC NUMBERS ON TOTAL CLAIMS
, BOTH FOR FIRE LOSSES OVER FOUR
YEARS FROM 2018 TO 2021 AND ALSO
THOSE THAT INCORPORATES SMOKE
AND WILDFIRE. UM THESE NUMBERS
ARE REALLY IMPORTANT AND NOTABLE
, AND, UM, I DO WANT TO CONTINUE
TO WORK WITH THE COMMITTEE TO
RESOLVE AND CLARIFY SOME SMALL
DIFFERENCES IN THE NUMBERS THAT
WERE REPORTED VERSUS THE NUMBERS
THAT ARE IN OUR REPORTS THAT ARE
ON OUR WEBSITE. IN PARTICULAR
THE CLAIMS AND LOSSES ARE A BIT
HIGHER THAN WHAT IS IN THE
BACKGROUND BUT ARE SIMILAR
INTERPRETATION AND SCOPE. I LOOK
FORWARD TO WORKING WITH THE
COMMITTEE FURTHER ON THAT
EFFORT. IN CLOSING. I'M HAPPY TO
ANSWER YOUR QUESTIONS ABOUT WILD
FIRST SAFETY MITIGATION. THANK
YOU VERY MUCH FOR HAVING ME. I
APPRECIATE IT. HE WILL BRING IT
BACK TO MEMBERS FOR QUESTIONS.
YES. HELLO MARK. I BELIEVE WHEN
YOU'RE TALKING EARLIER
REGARDING, UH THE CLONE OF THE
BRUSH AROUND PROPERTIES THAT
SOMETHING SHOULD BE, DEPENDING I
GUESS WHERE YOU LIVE, THAT
SOMETHING SHOULD BE DONE YEARLY
OR EVERY OTHER YEAR. THAT'S A
GREAT QUESTION, SO OBVIOUSLY WE
WANT WE WANT OUR HOMEOWNERS TO
BE MAINTAINED IN NEW YORK'S
EVERY YEAR AND ACTUALLY TIMES
LIKE THIS, PROBABLY MORE THAN
THAT. UM BUT WHEN IT COMES TO
THE FUEL TYPES OF OUR SHADED
FUEL BREAKS, IT ALL DEPENDS ON
THE FUEL GRASS. WE'RE GOING TO
BE GOING BACK EVERY YEAR AND
TREATING THE GRASS BRUSH. WE
ANTICIPATE 3 TO 5 YEARS TIMBER
SEVEN PLUS YEARS. THE GOOD NEWS
IS. THE AMOUNT OF EFFORT THAT IT
TAKES FOR THE FIRST PASS IS UP
HERE. AND THEN THE AMOUNT OF
EFFORT FOR THE SUBSEQUENT IS
DOWN HERE. AND SO WHAT? WE LOOK
AT FOR THE MW. PAPA IS THAT FOR
THE FIRST SEVERAL YEARS NEW AND
EMERGING PROJECT FUNDING HAS
BEEN UP HERE. MAINTENANCE IS
DOWN HERE. WE'VE ALREADY STARTED
IN THE YEAR FOUR STARTING TO SEE
NEW PROJECT COME DOWN AND
MAINTENANCE COME UP. I
ANTICIPATE BY YOUR SEVEN. WE'RE
GOING TO BE MAINTENANCE IS HERE.
AND NEW PROJECTS ARE DOWN HERE.
GOOD NEWS AGAIN. THE MAINTENANCE
IS A LOT CHEAPER. AND I JUST
HAVE ONE MORE QUESTION FOR MIKE
FROM WELL, THEN DEFENSE SYSTEM
SOME LOOKING AT YOUR HAND OUT
WITH YOUR PRESENTING. AND YOUR
LOOKS LIKE IS IT YOUR DISPATCH
CENTER? YOU'RE MONITORING
CENTER. HOW DO YOU GUYS WORK
WITH, LIKE CAL FAR? OH, YES.
BECAUSE I KNOW THE KIND OF ALL
DO SIMILAR THINGS. AND I KNOW
THINGS GET HECTIC ON THE FIRE
LINE RIGHT WHEN THINGS ARE KIND
OF GETTING OUT OF HAND, SO TO
SPEAK, BUT HOW DOES THE
COORDINATION WITH ALL THE
DIFFERENT ENTITIES WORKING
TOGETHER AND KIND OF ALMOST
DOING THE SAME THING? BUT NOT
REALLY. SO I GUESS IT DEPENDS ON
THE INCIDENT COMMANDER WERE ALL
THE INFORMATION GOING THROUGH TO
MAKE SURE WE'VE GOT THE
RESOURCES GOING. ALL THE RIGHT
PLACES. HOW DOES THAT WORK THAT
COORDINATION? GREAT QUESTION.
ASSEMBLYMEMBER'S RODRIGUEZ. UM
THE BOTTOM LINE IS WHEN WE
ARRIVE ON INCIDENT WE MEET WITH
THE INCIDENT COMMAND TEAM
AARONSON MANAGEMENT TEAM, AND WE
ASKED PERMISSION TO INCORPORATE
INTO THEIR INCIDENT SO THEY CAN
KEEP TRACK OF THE RESOURCES AND
WE DON'T BECOME A LIABILITY AND
IT'S VERY IMPORTANT FOR US TO BE
TRANSPARENT AND DISCLOSE WHERE
ALL THE PROPERTIES ARE. THAT
WOULD BE IN THE INFLUENCE SO
THAT WHILE LAND FIRE SETTING AND
THE WORK THAT WE DO IS VERY
DIFFERENT AND IT'S VERY
IMPORTANT FOR US TO ANNOUNCE
THAT OUR WORK IS VERY DIFFERENT
AGENCIES OR LOCAL GOVERNMENT ARE
VERY CONCERNED WITH PERIMETER
CONTROL. OBVIOUSLY, THAT'S NOT
OUR MISSION. OUR MISSION IS TO
GET OUT IN ADVANCE OF THE OF THE
FIRE AT A SAFE DISTANCE AND TAKE
MITIGATION MEMBERS. YOU KEEP
TALKING ABOUT HARDER AND
HARDENING THAT STRUCTURES AND
THAT KIND OF STUFF. THAT'S
ESSENTIALLY WHAT WE'RE DOING.
WE'RE GOING OUT LAST MINUTE
HARDENING STRUCTURES THAT, UH,
ARE CLIENTS OF THE INSURANCE
COMPANIES THAT WE CONTRACT WITH
, AND THOSE SIMPLE MEASURES HAVE
PROVEN TO BE HIGHLY SUCCESSFUL,
BUT WHAT IT DOES DO IS IT
ENHANCES THE AGENCIES OF THE
LOCAL GOVERNMENT'S ABILITY TO
FOCUS ON THEIR JOB AND NOT HAVE
TO TAKE CARE OF SOME OF THOSE
TACTICS AND STRATEGIES THAT
MIGHT WORK. ON THESE PARTICULAR
STRUCTURES THAT BELONG TO OUR
CLIENTS. UM I HOPE THAT ANSWERS
YOUR QUESTION, SIR. BUT OUR
MISSION IS VERY DIFFERENT. WE
COORDINATE WITH THE AGENCY OR
THE LOCAL GOVERNMENT THAT HAS
JURISDICTION ON THE FIRE AND
COORDINATE OUR ACTIVITIES. THANK
YOU, SIR. I'M DONE. THANKS.
THANK YOU. THANK YOU. TO ALL OF
YOU APPRECIATE, REALLY
APPRECIATE ALL THE INFORMATION.
UM. I'VE HEARD. WE'VE HEARD A
COUPLE OF TIMES NOW. MAINTENANCE
IS REALLY IMPORTANT. UH YOU
CAN'T JUST THESE ARE NOT ONE AND
DONE ISSUES I KNOW AND UK A. WE
HAVE A BIG FIRE BREAK. IT WAS
HAD BEEN DONE FOR YEARS AND THEN
NEGLECTED. SO THE COSTS GO BACK
10 12 15 YEARS LATER TO DO
THAT'S REALLY, REALLY, REALLY
HIGH, SO THAT'S SOMETHING THAT'S
A TAKEAWAY FOR US AS TO HOW DO
WE FIND A WAY? TO INCORPORATE IN
THESE GRANT PROGRAMS MAINTENANCE
COMPONENT OF THAT SO THAT WE CAN
MAKE SO WE CAN KEEP THESE THESE
GOING. UM QUESTION FOR MR BROWN
. YOU TALKED ABOUT A LOT OF
THINGS ARE YOU UTILIZING CONTROL
BURN AS AS PART OF YOUR STRATEGY
AS WELL. YES IT FALLS WITHIN OUR
MEMBER AGENCIES. THE FIRE
AGENCIES WILL ACTUALLY BE
CONDUCTING THE PRESCRIBED FIRE.
BUT WE EITHER DO PILE BURNING,
WHICH IS PRESCRIBED FIRE. BUT WE
ALSO HAVE BROADCAST BURNS. WE
JUST HAD THREE DAYS OF BURNING
IN NOVATO. MARIN COUNTY FIRE WAS
COORDINATING STATE PARKS. CHINA
CAMP IS GOING TO BE DOING SOME
BURNING SOON AND THEN MARINE
WATER IS GOING TO BE BURNING THE
30 ACRE PLOT UP ON TOP OF MOUNT
TAM LATER THIS WEEK WHERE WE
COME AND SUPPORT WE CAN PROVIDE
SOME OF THE FUNDING FOR THE
PROJECT WORK, BUT WE CAN ALSO
HELP WITH THE ENVIRONMENTAL
COMPLIANCE THE WHOLE IDEA. YOU
KNOW, CHIEF WINEGAR PUT IT VERY
WELL. IT'S DO YOU HAVE TO LOOK
FOR THE RIGHT WINDOWS OF TIME?
PRETTY PRESCRIBED FIRES TO
OCCUR, SO WHAT WE WANT TO DO IS
BE ABLE TO GET ALL THE
ENVIRONMENTAL COMPLIANCE
COMPLETED UPFRONT. GET THE PLAN
CREATED AND HAVE ALL OF OUR AIR
QUALITY PERMITS APPROVED AND
THEN WHEN THAT RIGHT WHETHER
WINDOW COMES INTO PLAY, THEN WE
CAN GO BURN, AND THAT'S WHAT IS
HAPPENING THIS WEEK. I
APPRECIATE BECAUSE I APPRECIATE
THAT AND I I'LL JUST NOTE AND
I'LL GET THEM AND GET A LITTLE
BIT OF A SOAPBOX HERE FOR A
MINUTE BECAUSE UM, I KNOW THE
AIR QUALITY MANAGEMENT DISTRICT
ALL OPERATE IN SUCH SOMEWHAT OF
AN AUTONOMOUS WAY. UM, THAT'S
REALLY CHALLENGING FOR PEOPLE IN
DIFFERENT COUNTIES. THERE'S ALSO
I KNOW THAT IN SOME COUNTIES,
THERE'S NO COST FOR A BURN
PERMIT AND ANOTHER'S. IT'S
HUNDREDS OF DOLLARS, WHICH IS
ALSO WHICH IS AN IMPEDIMENT.
I'VE HEARD MULTIPLE TIMES OVER
THE YEARS OF AGENCIES AND GROUPS
ALL STAGE TO DO A CONTROLLED
BURN AND BE SHUT DOWN BY THE AIR
QUALITY AND MY FRUSTRATION IS
AND I DON'T KNOW HOW. I DON'T
KNOW HOW TO GET AROUND THIS
BECAUSE I THINK IF YOU WANT TO
TALK ABOUT AUTONOMOUS, WE'LL
TALK ABOUT CARB FOR A SECOND
HERE BECAUSE AT SOME POINT, YOU
KNOW, I WOULD RATHER SEE A
LITTLE BIT OF SMOKE THAN LIVE
WITH DAYS AND WEEKS OF SMOKE
FROM FIRES THAT ARE IN
COMMUNITIES YET. THERE SEEMS TO
BE A LACK OF COORDINATION OR
UNDERSTANDING BY THE BICARB ON
ON ON SOMETHING. I UNDERSTAND
THAT SO I WOULD WELCOME FROM ANY
OF YOU IDEAS ABOUT WHAT WE COULD
POTENTIALLY DO THERE BECAUSE I
UNDERSTAND AND I APPRECIATE AND
RESPECT WHAT CARVED IS TRYING TO
DO. BUT AT THE END OF THE DAY IF
WE CAN'T DO SOME OF THESE
CONTROLLED BURNS AND HAVE A
LITTLE BIT OF SMOKE AND MITIGATE
RISK. WE'RE STILL LOOKING AT
THESE BIG SMOKE EVENTS AND, YOU
KNOW, LOOK, I WAS UP IN A COUPLE
WEEKS AGO UP IN DEL NORTE COUNTY
AND THAT THAT SMOKE THAT YOU SAW
IN THE BAY AREA, UM, FOR THE FEW
DAYS WAS COMING FROM UP THERE
AND, UM, AND SO THAT WAS A
FEDERAL RESPONSIBILITY AREA.
DIFFERENT ANIMAL, BUT BUT THE
LACK OF CONSISTENCY WITH THE AIR
QUALITY MANAGEMENT DISTRICTS.
THE ABILITY TO COORDINATE WITH
CARB IS REALLY FRUSTRATING. SO
IF YOU HAVE SOME IDEAS ABOUT HOW
WHAT MIGHT BE GUIDELINES. THAT
COULD BE HELPFUL. UM, I'M ALL
EARS BECAUSE WE'RE TRYING TO
FIGURE THIS ONE OUT. COUPLE
COUPLE THOUGHTS. FIRST OF ALL,
YOU'RE RIGHT SMOKERS TO PAY ME
NOW OR PAY ME LATER. PROPOSITION
AND PAY ME LAYERS A LOT MORE
EXPENSIVE THAN PAY ME NOW, IF
YOU LOOK AT THE TYPE OF SMOKE
THAT'S COMING FROM PRESCRIBED
FIRE, AND COMPARE THAT TO THE
TYPE OF SMOKE FROM HIGH
INTENSITY FIRE. THERE'S NO
COMPARISON NOT ONLY IN THE
VOLUME OF FIRE, BUT WHAT IS IN
INSIDE THAT SMOKE. MUCH MORE
DANGEROUS SMOKE. THERE'S SOME
RESEARCH GOING ON IS TALKING
ABOUT THE AVOIDED WILDFIRE
EMISSIONS SO THAT YES, WE MIGHT
RELEASE SOME CARBON WE MIGHT
TAKE SOME TREES. THERE'S
SEQUESTERING CARBON AWAY. BUT
WE'RE IMPROVING THE HEALTH OF
THAT FORCE HEALTHY FOUR
SEQUESTERS CARBON AND THEN WE
ARE ALSO PREVENTING THAT LARGE
CARBON EMITTING EVENT. FROM
HAPPENING. AND THEN THERE COULD
BE REGULATIONS THAT WE CAN PUT
IN PLACE OR ENCOURAGED THE AIR
QUALITY MANAGEMENT DISTRICTS TO
EXEMPT PRESCRIPTION ARE
PRESCRIBED FIRES FROM PARTS PER
MILLION TYPE ACTIVITIES. SPOKE
MANAGEMENT PLANS JUST MAKE IT A
LITTLE BIT EASIER FOR US TO GO
THROUGH THE REGULATORY PROCESS.
STREAMLINING SURE. SURE THANK
YOU. UM SO THIS QUESTION IS FOR
MIKE PETERSON. UM CAN YOU GO
INTO A LITTLE BIT MORE DETAIL ON
HOW THE SAFER FROM WILDFIRE
FRAMEWORK WORKS? AND, UM WHAT
KIND OF DISCOUNTS CAN CONSUMERS
ANTICIPATE? ABSOLUTELY THANK YOU
VERY MUCH. SO THE WAY THIS WORKS
IS THE DEPARTMENT'S REGULATIONS
REQUIRE THESE 11 FACTORS IN
EVERY RATE FILING THAT USES
WILDFIRE RISK AS A RATING
FACTOR. AND SO IF YOU, UM NO
MATTER WHO YOUR INSURANCE IS, IF
THEY'RE RATING YOU BASED ON YOUR
WILDFIRE RISK, THESE FACTORS
WILL BE INTEGRATED INTO IT AND
BRING DOWN THAT RISK IN TERMS OF
WHAT YOU PAY. AT THIS POINT IN
TIME, WE RECEIVED THE RATE
FILINGS IN APRIL 2023. THE FAIR
PLANS RATE FINAL HAS BEEN
APPROVED. SO THOSE WHO HAVE
AIRPLANE POLICIES AND ARE IN THE
HIGHEST RISK AREAS WILL SEE THE
BEGINNINGS OF THOSE DISCOUNTS AS
THEY'RE IMPLEMENTED, UM AND THEN
THE REMAINDER OF THE RATE
FILINGS ARE UNDER REVIEW OF THE
DEPARTMENT, AND WE'LL HAVE
UPDATES IN THE UPCOMING MONTHS.
BUT IN GENERAL, IF YOU THINK
ABOUT IT IF THIS IS RELATED TO
YOUR WILDFIRE RISK THAN THE
RISKIER YOU ARE IN TERMS OF
HAZARD OR THE AREA THAT YOU'RE
IN A HIGHER HAZARD. UM THIS
DISCOUNT WILL APPLY AND WILL
POTENTIALLY PROVIDE A BIGGER
DISCOUNT IN HIGH RISK AREAS THAN
IT MAY IN OTHER AREAS AS WELL.
BUT UM, BUT THAT'S THE GOAL IS
TO PROVIDE A CLEAR AND
CONSISTENT STATEWIDE SET OF
FACTORS. DIFFERENT INSURANCE
COMPANIES WILL HAVE DIFFERENT
WAYS OF IMPLEMENTING THAT THOSE
FACTORS, BUT EVERY CONSUMER ONCE
THESE GRAPEVINES ARE APPROVED,
WE'LL SEE THAT IN WHAT'S OFFERED
IN TERMS OF THEIR PREMIUM. THANK
YOU. ONE MORE FOLLOW UP AND WHAT
IS THE WILDFIRE RISK OR MEAN?
AND HOW IS THAT FACTORED IN?
THANK YOU, SIR. FOR THE PAST
SEVERAL YEARS, MANY INSURANCE
COMPANIES, IF NOT ALL OF THEM
HAVE USED FIRE RISK SCORES THAT
ARE A COMBINATION OF DIFFERENT
UM, BROAD FACTORS LIKE ACCESS
ROADS, FUEL LOAD SLOPE OF A OF A
CERTAIN PROPERTY, AND THAT GIVES
YOU A SCORE THAT'S BEEN USED IN
PREMIUMS GOING BACK, PROBABLY
THE LAST 10 YEARS. UM BECAUSE OF
THE RECENT REGULATIONS. NOW
MITIGATION HAS TO BE PART OF
THAT SCORING AND THESE FROM
WILDFIRES FACTORS BECOME PART OF
THAT. SO THESE ARE NOW THINGS
THAT THAT HOMEOWNER CAN CONTROL
TO A CERTAIN EXTENT OF EVENTS
AND ROOFS AND 5 FT. OF NON
COMBUSTIBLE SPACE. UM AND SO IT
DOES SORT OF MERGE WITH SOME OF
THE WAYS THAT INSURANCE
COMPANIES HAVE LOOKED AT PRICING
OVER THE PAST 10 YEARS. BUT WHAT
IT DOES IS, IT GIVES CONSUMERS
THAT INCENTIVE THAT IF YOU DO
SOME OF THESE TAKE SOME OF THESE
ACTIONS AND YOU BUILD THROUGH
THAT OVER TIME, YOU WILL BE
REWARDED IN THE INSURANCE
PRICING. OKAY. THANK YOU. GREAT
AND JUST, UH OH, MY APOLOGIES.
GO. GO AHEAD. YEAH. WE'RE
CAULDRONS QUESTIONS. SO WE HEAR
A LOT ABOUT THIS IDEA OF PRICING
BASED ON PROSPECTIVE RISK. AND
I'M JUST CURIOUS. HOW DOES THAT
COME INTO PLAY WITH? TRYING TO
MITIGATE DAMAGES THAT COULD
HAPPEN AROUND YOUR HOME OR HOME
HARDENING OR SAFE SPACE OR
WHATEVER IT MAY BE. ARE THOSE
CONSIDERED ONE OF THE SAME OR IS
THAT SOMETHING DIFFERENT? I
THINK IT COMES DOWN TO TWO
DIFFERENT APPROACHES. SO WHAT
WE'VE WHAT HAS BEEN USED THUS
FAR HAS BEEN A LOOK AT
HISTORICAL LOSSES OVER THE LAST
20 TO 25 YEARS. AND SO IN THOSE
LOSSES, UM THERE IS NO SPECIFIC
, UH, FACTORS FOR CERTAIN RISK
REDUCTION ACTIONS. THEY'RE SORT
OF INTEGRATED IF THEY HAVE HAD
AN IMPACT HISTORICALLY THAN
THEY'RE PART OF THAT HISTORY.
BUT ANYTHING RECENT AND YOU
THINK OF WHAT WE'VE HEARD FROM
TODAY FROM DR COLLINS IN TERMS
OF PRESCRIBED FIRE, OR CHIEF
NGUYEN OCCUR IN TERMS OF, YOU
KNOW AN EXPANDED FOCUS ON HOME
HARDENING. THOSE ARE MORE RECENT
SAFETY MEASURES THAT WOULDN'T BE
FULLY REFLECTED IN THAT
HISTORICAL RECORD. UM WHAT
CATASTROPHE MODELS ALLOW FOR IS
A LOOK AT THE RISK ASSESSMENT
FOR WHAT IT WOULD BE. TODAY AND
IN THE IMMEDIATE NEAR FUTURE, UM
AND THAT'S YOU KNOW, IN SOME
SENSES, OR THAT IS LIKELY, MUCH
MORE ACCURATE TO WHAT THE RISK
IS AT THE MOMENT, AS OPPOSED TO
WHAT IT MAY HAVE BEEN AS YOU
AVERAGE OVER THE LAST 25 YEARS.
IS IT THAT THE PROSPECTIVE TAKES
INTO ACCOUNT, THEN WHAT AN
INDIVIDUAL MIGHT DO TO MITIGATE
AS WELL AS WHAT CLIMATE MAY
IMPACT IN THE FUTURE. IS IT A
COMBINATION OF THOSE TWO? AND
RIGHT NOW WE'RE ONLY LOOKING AT
WHAT AN INDIVIDUAL MIGHT DO TO
MITIGATE. THAT'S THE ONLY
PERSPECTIVE PART WHERE WE'VE
GOTTEN SO FAR. ON THE
PERSPECTIVE PART. I THINK IT'S
REALLY I THINK THERE'S SORT OF A
DISTINCTION HERE. IT'S WHAT IS
THE MOST RECENT TYPES OF
MITIGATION ACTIONS THAT THAT
HAVE OCCURRED AND THAT
INFORMATION THAT CAN BE
INTEGRATED INTO A MODEL. SO IT'S
NOT PRESCRIPTIVELY ASSUMING THAT
YOU KNOW, I AM GOING TO DO
PUTTING A NEW ROOF IN FIVE YEARS
OR SOMETHING LIKE THAT. IT'S IN
THE RECENT VERY RECENT PAST,
WHAT MITIGATIONS HAVE TAKEN
PLACE THAT WE CAN DEMONSTRATE
AND THAT COULD GO INTO A MODEL.
THE PROSPECTIVE NATURE OF IT IS
THAT WHEN IT COMES TO CLIMATE
CHANGE AND LOOKING AT HOW
WILDFIRES ARE LIKELY TO BURN,
THERE ARE THERE'S SORT OF
SCIENTIFIC DATA THAT CAN INFORM
WHAT WE EXPECT FROM NEXT YEAR,
WHICH IS THE YEAR THAT INSURANCE
COMPANIES ARE LOOKING AT IN
TERMS OF THEIR POLICIES IS
WHAT'S GOING TO HAPPEN NEXT
YEAR. AND SO THAT'S THE
PROSPECTIVE NATURE OF IT IS
USING THE SCIENCE THAT WE KNOW
ABOUT HOW FIRES ARE BURNING.
WHAT WE KNOW ABOUT MITIGATION
WHERE WE KNOW ABOUT FOREST
MANAGEMENT INTO WHAT CAN BE
PROJECTED INTO THE NEXT YEAR,
WHEN THE INSURANCE DECISIONS ARE
BEING MADE. JIN'S OKAY. JUST A
COUPLE OF STARTING WITH MARK
BROWN. UM IN IN YOUR VIEW. IS
CAL FIRE GETTING GRANT MONEY OUT
THE DOOR IN A TIMELY MANNER?
WITH THE FIRE PREVENTION GRANT
PROGRAM. YES, I THINK IT FOR THE
RESOURCES THAT THEY HAVE
INTERNALLY. YES THE CHALLENGE,
THOUGH, IS FOR THOSE OF US WHO
HAVE MANY PROJECTS. AND HAVING
TO APPLY FOR EACH INDIVIDUAL
PROJECT AT TIMES CAN BE VERY
CUMBERSOME. WE WOULD REALLY
ENJOY TO SEE A BLOCK GRANT TYPE
PROGRAM. WE'VE BEEN WORKING WITH
ONE TAM OR LAND MANAGEMENT
AGENCIES, AND THEY'VE CREATED A
FANTASTIC FORCE HEALTH STRATEGY
THAT HAS A CHAPTER OF ALL THEIR
PROJECTS. WE'RE COMBINING THAT
PROJECTS LIST WITH OUR PROJECT
LIST AND WE'RE CALLING THAT ARE
REGIONAL PRIORITY PLAN AND IF WE
FEEL THAT IF YOU PRESENT A
REGIONAL PRIORITY PLAN THAT YOU
CAN LEAN TO POINT TO A BLOCK
GRANT PROGRAM CAN BE VERY
SUCCESSFUL AND THAT WILL BE ABLE
TO INCREASE THE PATIENT SCALE
THAT PEOPLE ARE DOING WORK. AND
AS YOU KNOW, I HAPPEN TO AGREE
WITH THAT, AND WE'RE POSTING
SOME LEGISLATION ON THAT AND
WILL CONTINUE TO DO SO. UM
RELATED TO THAT, UM. FROM A
COMMUNITY PERSPECTIVE COULD
DESCRIBE GRANT PROCESS BE
IMPROVED THEIR STREAMLINED IN
ANYWAY. IS IT REALLY THE BEST
WAY TO DO THAT THROUGH A BLOCK
GRANT MODEL? FOR THE COMMUNITY
RESILIENCY. I THINK SO. WE'VE
APPLIED FOR SOME GRANTS ALONG
THAT LINES. BUT THE DEMOGRAPHICS
THAT WE'RE IN ARE NOT PUTTING
THIS ON TOP OF THE LIST FOR
SUPPORTING THAT, BUT I DO THINK
IT'S A LOT EASIER TO FUNNEL
MONEY INTO AN ORGANIZATION LIKE
OURS TO SUPPORT THE RESIDENTS
RATHER THAN THE RESIDENTS HAVING
TO GO ALL ON THEIR OWN. RIGHT?
HAVE EFFORTS TO EXPAND ACCESS TO
HIM. HARDENING PROGRAMS BEND
SUCCESSFUL IN YOUR VIEW, AND
PARTICULARLY ARE THE GRANTS
BEING SUCCESSFULLY DISTRIBUTED
TO LOW AND MODERATE INCOME
HOUSEHOLDS. YES AND YES. WHAT WE
ARE SEEING A LOT OF WORK BEING
DONE. WE ARE DEFINITELY ALWAYS
TRYING TO IMPROVE THE PROGRAM.
RIGHT NOW. WE ARE TREATING ALL
OF THE HAZARDS AS EQUAL RISK.
OUR NEXT RENT RENDITION OF THE
GRANT PROGRAM. IT WILL BE
PRIORITIZING THE RISK, SO WE'LL
BE OUT HAVING PEOPLE REMOVED THE
HAZARD SENATOR RISKIEST ITEMS OR
IMPROVING THE ITEMS ON THEIR
HOMES THAT ARE THE RISKIEST
ITEMS FIRST. SO THAT IS ONE
TWEET THAT WE HAVE THERE.
ACCESSIBILITY WE NEED THAT THAT
IS ONE OF THE WEAKNESSES OF OUR
CURRENT PROGRAM. RIGHT NOW. IT
IS, UM, REIMBURSEMENT PROGRAM
AND SO THOSE WITHOUT THE
FINANCIAL RESOURCES FOR A
REIMBURSEMENT PROGRAM. IT ISN'T
GREAT. BUT WE HAVE SOME BETA
TESTS THAT ARE GOING ON NOW
WHERE WE ARE COMING IN ONTO THE
PROPERTY WITH THE PROPERTY
OWNER'S PERMISSION. AND GETTING
THE WORK DONE SO THEY DON'T HAVE
TO, UM LEVERAGE THEIR OWN
FINANCES AND THEN GET REIMBURSED
BY US. GREAT AND THEN TO MR
PETERSON. YOU MENTIONED THE
SUSTAINABLE INSURANCE STRATEGY,
WHICH WAS RECENTLY UNVEILED. UM
IF YOU COULD JUST KIND OF
QUICKLY SUMMARIZE WHAT YOU SEE
IS THE IMPLEMENTATION STRATEGY
FOR THAT PLAN. ABSOLUTELY THANK
YOU. SO AS COMMISSIONER LARA
ANNOUNCED, OUR TIMELINE IS SORT
OF IMMEDIATE AND URGENT. AND SO
WE ARE LOOKING TO IMPLEMENT IT
BY DECEMBER OF 2024. AS PART OF
THAT PLAN, THERE'S THREE MAIN
GOALS. HOW DO WE EXPAND
INSURANCE AVAILABILITY AND AT
RISK COMMUNITIES? HOW DO WE
STABILIZE RATES AND COVERAGES?
AND HOW DO WE PROTECT
COMMUNITIES BETTER FROM CLIMATE
CHANGE? AND SO AS WE MOVE
FORWARD, THERE'S UM WE'VE HAD
TWO WORKSHOPS ON CATASTROPHE
MODELING SO FAR TO PUBLIC
WORKSHOPS AND CONTRAST
REMODELING WHERE WE'VE GARNERED
TESTIMONY FROM MANY STAKEHOLDERS
ARE MOST RECENT WAS ABOUT A WEEK
AND A HALF AGO. AND SO WE'RE
REVIEWING THAT TESTIMONY AND
COMING UP WITH NEXT STEPS MOVING
FORWARD. BUT AS THE COMMISSIONER
ARTICULATED, WE ARE LOOKING AT A
NUMBER OF NEW SORT OF REGULATORY
IDEAS AND ALSO, UH, YOU KNOW
WHAT TYPES OF EXPERTISE WE CAN
BEST BRING TO BEAR TO MAKE
COMMUNITIES SAFER. AND SO IT
SOUNDS LIKE THE PUBLIC WILL HAVE
AN OPPORTUNITY TO WEIGH INTO
THAT PROCESS CONSISTENT WITH HOW
SAFER FROM WILDFIRES WAS WAS
DONE. THE REPUBLIC WORKSHOPS YOU
KNOW, WE HAVE. WE'VE HAD
CATASTROPHE MODELING WORKSHOPS
SO FAR AND WILL CONTINUE TO HAVE
THOSE TYPES OF PUBLIC EVENTS AND
WORKSHOPS. GREAT AND THEN FINAL
QUESTION. YOU STARTED TO ALLUDE
TO THIS IN TERMS OF CATASTROPHIC
MODELING. HOW WILL THAT ACCOUNT
FOR CLIMATE CHANGE? SO CORRECT
IT. FIRST OF ALL, I CAN'T SPEAK
FOR ALL CATASTROPHE MODELS IN
ONE BROAD BRUSH, BUT GENERALLY
SPEAKING CATASTROPHE MODELS HAVE
BEEN USED IN THE INSURANCE
SECTOR FOR SEVERAL DECADES WHEN
IT COMES TO UNDERWRITING
PROPERTIES. AND SO THEY DO TAKE
INTO ACCOUNT THINGS LIKE
LANDSCAPE LEVEL MANAGEMENT,
METEOROLOGY, METEOROLOGICAL
INFORMATION IN ORDER TO PRODUCE
THE CATASTROPHE MODELING RESULTS
THAT ARE USED IN UNDERWRITING.
UM WHEN IT COMES TO CLIMATE
CHANGE, YOU KNOW, GIVEN THAT
WE'RE NOW INTO CALIFORNIA'S
FIFTH CLIMATE ASSESSMENT, WE'RE
LEARNING MORE AND MORE
SCIENTIFICALLY ABOUT THE IMPACTS
OF CLIMATE CHANGE ON WILDFIRES,
FLOODING HEAT WAVES, AND SO THAT
SCIENTIFIC INFORMATION GOES INTO
HAZARD MAPS THAT GOES INTO RISK
ASSESSMENTS AND MODELERS
VARIABLE TO INTEGRATE THAT INTO
WHAT THEY PRODUCE IN TERMS OF
WHAT THE WHAT YOU'D EXPECT FOR
CATASTROPHE PROBABILITY OF
CATASTROPHES IN THE NEXT YEAR. I
THINK WHAT IS REALLY IMPORTANT
IS THAT WE ARE LEARNING MORE AND
MORE ABOUT THE RISK MITIGATION
ACTIONS AND THEIR IMPACT. AND SO
OVER THE LAST THREE YEARS, THE
STATES INVESTED $2.7 BILLION
INTO WILD PART RESILIENCE AS
THAT MONEY COMES TO FRUITION AS
PRESCRIBED FIRE. UM INCREASED
REGIMES COME TO, UM, FRUITION,
YOU'RE GOING TO HAVE SCIENTISTS
WHO ARE LOOKING AT THOSE
MITIGATION ACTIONS BETTER
UNDERSTANDING THEM. AND THAT
INFORMATION WILL LEAD TO BETTER
MODELS THAT REFLECT SAFETY
MEASURES. I THINK INTO THE
FUTURE. YEAH YOU YOU LITERALLY
JUST SENT HIS HATED MY FINAL
POINT. I THINK THAT IS JUST
POINT BLANK. YOU KNOW,
CATASTROPHIC MODELING SHOULD
BETTER ACCOUNT FOR WILDFIRE
PREVENTION PROJECTS. THE
MITIGATION FEATURES WE'RE
TALKING ABOUT TODAY, SO I
APPRECIATE THAT. SO WITH THAT,
I'LL TURN IT BACK. YEAH. THANK
YOU. GENTLEMEN THIS IS BEEN VERY
, VERY HELPFUL. WE APPRECIATE
YOU PARTICIPATING TODAY. SO
WE'RE GOING TO START OUR NEXT
PANEL, WHICH IS GOING TO FOCUS
ON THE QUESTION OF KING
CONSIDERATION OF RISKS AND
RESILIENCY LEAD TO PROPERTY
INSURANCE MARKET RECOVERY ON
THIS PANEL. WE HAVE KAREN
COLLINS, THE VICE PRESIDENT OF
PROPERTY AND ENVIRONMENTAL AT
THE AMERICAN PROPERTY CASUALTY
INSURANCE ASSOCIATION. ROBERT
HARRELL, EXECUTIVE DIRECTOR OF
THE CONSUMER FEDERATION OF
CALIFORNIA. SYRIAN TAYLOR, VICE
PRESIDENT. AT PERSONAL INSURANCE
FEDERATION OF CALIFORNIA, AND
AMY BACH, EXECUTIVE DIRECTOR OF
THE UNITED POLICYHOLDERS.
WELCOME. AND I THINK WE'LL START
WITH KAREN. WHENEVER YOU'RE
READY.
GOOD AFTERNOON. AH MY NAME IS
KAREN COLLINS. I'M VICE
PRESIDENT. PROPERTY
ENVIRONMENTAL POLICY ISSUES FOR
THE AMERICAN PROPERTY. CALGARY
IS INSURANCE ASSOCIATION. FOR
THOSE NOT FAMILIAR. WE ARE A
NATIONAL TRADE SUPPORTING AUTO,
HOME AND BUSINESS INSURERS AND
WE ARE, UM, ESTABLISHED
ORGANIZATION WITH THE LEGACY OF
OVER 250 YEARS, AND OUR MEMBERS
DO REPRESENT ALL SIDES OF
STRUCTURES IN REGIONS. HERE IN
CALIFORNIA ACROSS THE US AND
ALSO, UM, GLOBALLY AS WELL. IN
MY ROLE I SERVE AS A POLICY
EXPERT ON PROPERTY NATURAL
CATASTROPHE ISSUES WITH A
SPECIFIC EMPHASIS ON MITIGATION
, RESILIENCE, AND THAT REALLY
FOCUSES ON DEVELOPING STATE
FEDERAL INTERNATIONAL PUBLIC
POLICY RECOMMENDATIONS FOR OUR
MEMBERSHIP ITSELF. SO I'D LIKE
IT. I APPRECIATE THE OPPORTUNITY
TO SHARE INSIGHTS ON TODAY'S
INSURANCE MARKET. HERE IN
CALIFORNIA, I DO WANT TO COVER
AS A STARTING POINT THAT AN
OVERVIEW OF THE MARKET
CHALLENGES THAT WE'RE FACING AND
THEN DIG INTO A DISCUSSION ON
HOW GREATER RESILIENCE TO THE
WILDFIRE ISSUES. UM WILL
RESILIENCE TO WELFARE IS GOING
TO HELP IMPROVE THE INSURANCE,
AFFORDABILITY AND AVAILABILITY
HERE IN CALIFORNIA. SO. STARTING
TO BROADER HIGH LEVEL THE U. S
PROPERTY INSURANCE MARKET IS IN
FACT FACING THE HARDEST MARKET
CYCLE IN OVER A GENERATION, AND
IT'S IMPACTING CATASTROPHE
EXPOSED MARKETS REALLY ACROSS
THE US THERE'S A NUMBER OF
FACTORS THAT ARE IMPACTING THIS
LISTED A HANDFUL OF THOSE REALLY
THE TOP FACTORS THAT ARE DRIVING
THE MOST RECENT COST PRESSURE
INCLUDES SIGNIFICANT INFLATION,
ELEVATED NATURAL DISASTER
ACTIVITY AND ALSO LAND USE
POLICIES, WHICH ARE EXACERBATING
THE EFFECTS OF CLIMATE CHANGE,
AND I'LL TOUCH ON SOME OF THESE
BRIEFLY. TO START JUST FOR
EXAMPLE, BETWEEN 2020 2022 THE
US EXPERIENCED OVER $287 BILLION
AND ENSURED NATURAL DISASTER
LOSSES, MAKING IT THE COSTLIEST
THREE YEAR PERIOD EVER FOR U. S
INSURERS. FOR LOSS EVENTS THAT
HAVE OCCURRED SINCE THE START OF
THE COVID 19 PANDEMIC.
SPECIFICALLY THE COSTS AND
TIMEFRAMES NEEDED TO REBUILD AND
ALSO REPLACE THE CONTENTS INSIDE
OF HOMES HAVE ALSO BEEN FURTHER
STRAINED BY THE RAPID ONSET OF
INFLATION, WHICH JUST LAST YEAR
REACHED A 41 YEAR HIGH OF 8.
LOOKING SPECIFICALLY AT
CONSTRUCTION COSTS FOR SINGLE
FAMILY RESIDENTIAL HOMES. THE
CONSTRUCTION MATERIALS IN THIS
TIMEFRAME HAVE SHOT UP 35. AND
LABOR SEPARATELY AS CLIENT 30%
AS OF JUNE OF THIS YEAR. SO THIS
IS RESULTED IN MUCH HIGHER LOSS
COSTS WELL BEYOND THE TYPICAL
DEMAND SURGE EFFECTS THAT WE
MIGHT NORMALLY SEE AFTER NATURAL
DISASTERS. SO THE IMPACT ON THE
HOMEOWNERS MARKET INSURANCE LINE
IS THAT WE'VE SEEN A COMBINED
RATIO OF 100 FOR FIVE OUT OF THE
MOST RECENT SIX YEARS, AND
ANYTHING OVER 100 TYPICALLY
MEANS THAT INSURERS HAVE SPENT
MORE THAN THEY HAVE COLLECTED IN
PREMIUMS. AND WE'RE SEEING THE
SAME PRESSURE AND COMMERCIAL
LINES AS WELL WITH A COMBINED
RATIO ABOVE 100 FOR THE LAST
EIGHT YEARS, EIGHT YEARS IN A
ROW. SO LOOKING AT CALIFORNIA.
AMONG THESE LOSSES, CALIFORNIA
HAS EXPERIENCED SEVEN OF THE 10
COSTLIEST INSURED WILDFIRE LOSS
EVENTS IN THE WORLD. JUST
BETWEEN 2017 AND 2022, ACCORDING
TO AON DATA. WE ARE ALSO SEEN
THE STATE HAS EXPERIENCED ITS
LARGEST FIRES IN RECORDED
HISTORY. BUY ACRES BURNED. YOU
CAN SEE SOME OF THOSE STATS HERE
IN THIS CHART. A RECENT ANALYSIS
FROM MILLIMAN, A WELL RESPECTED
ACTUARIAL FIRM, HAS NOTED THAT
THE LOSSES FROM 2017 AND 2018 IN
CALIFORNIA SPECIFICALLY WERE SO
SIGNIFICANT THAT THEY WIPED OUT
OVER 20 YEARS OF UNDERWRITING
PROFITS FOR HOMEOWNERS INSURERS.
AND WE'VE BEEN TRYING TO CLIMB
BACK FROM THAT SENSE. OF
CONCERN, THOUGH THE THREAT OF
CATASTROPHIC WILDFIRE LOSSES IS
CONTINUING TO CLIMB. THIS IS IN
PART DUE TO THE GROWTH IN
POPULATION AND COMMUNITIES ARE
WILDFIRE PRONE REGIONS. AS WELL
AS THE IMPACTS FROM CLIMATE
CHANGE, WHICH IS RESULTING IN
HOTTER AND DRIER CONDITIONS, AS
MANY SPOKE ABOUT TODAY, WHICH IS
ENABLING FIRES TO IGNITE MORE
EASILY SPREAD MORE RAPIDLY. AND
BURN MORE INTENSELY, WHICH IS
ESSENTIALLY MAKING THEM MORE
DIFFICULT TO CONTROL AND
SUPPRESS. I'LL HIGHLIGHT BRIEFLY
THE DIXIE AND CALDERON FIRES
FROM 2021. THERE'S NOT NOTABLE
IN THE SENSE THAT THEY'RE NOT
THE COSTLIEST INSURED LOSS
EVENTS. BUT WHEN YOU TALK ABOUT
FIRE BEHAVIORS CHANGING FOR THE
FIRST TIME EVER CONDITIONS
ENABLED WILDFIRES THESE
WILDFIRES TO BURN CLEAR ACROSS
THE SIERRA NEVADA MOUNTAINS FOR
ONE SIDE TO THE OTHER THE FIRST
THROUGH THE DIXIE FIRE ONLY BE
REPEATED A MONTH LATER BY THE
CALGARY FIRE. THIS IS
UNPRECEDENTED IN RECENT MODERN
HISTORY. NOW THERE'S A MOTHER
ISSUES. THEY'RE INFLICTING
ADDITIONAL PRESSURE AND STATES
WHICH ARE AMPLIFYING THE EFFECTS
OF THIS CURRENT HARD MARKET. FOR
EXAMPLE, IN THE AFTERMATH OF THE
SEVERE WILDFIRE LOSSES HERE IN
CALIFORNIA. WE'VE SEEN A FLURRY
OF LEGISLATION AND REGULATORY
CHANGES THAT HAVE BEEN ENACTED.
NOW, THESE HAVE BEEN WELL
INTENTIONED. INTENDED TO HELP
PROTECT CONSUMERS BY PROVIDING
MORE ROBUST COVERAGE UNDER THEIR
INSURANCE POLICIES. I'M A
CALIFORNIA RESIDENT. I
APPRECIATE THEM. BUT THESE
POLICIES HAVE ALSO INTRODUCED
HIGHER COSTS AND VOLATILITY THAT
MAKES MODELING AN INTERN.
PRICING WILDFIRE RISK MORE
CHALLENGING, AND INSURERS HAVE
ALSO FACED SOME SIGNIFICANT
CONSTRAINTS AND MANAGING THE
GROWING RISK THAT WE DO HAVE IN
OUR STATE, SUCH AS THE LENGTHY
TIME FRAMES TO SECURE APPROVAL
TO INCREASE RATES AND ALSO
LIMITED ACCESS TO CERTAIN TOOLS
THAT ARE CRITICAL TO MANAGING
CATASTROPHIC RISK IN GENERAL
WILDFIRE INCLUDED. SO THE RESULT
IS THAT SOME INSURERS AS WELL AS
REINSURERS, MAYBE MORE HESITANT
TO DEPLOY CAPITAL DUE TO THE
UNCERTAINTY OF EXPECTED FUTURE
LOSSES. THE PROSPECTIVE LOSSES.
AND THE ABILITY TO COLLECT
ADEQUATE PREMIUMS TO COVER THOSE
PROSPECTIVE LOSSES. FINALLY
INSURERS ARE ALSO FACING HIGHER
COSTS FOR CAPITAL, WHICH IS
CRITICAL TO PROVIDE COVERAGE IN
ANY CATASTROPHE PRONE REGION.
FOR EXAMPLE, REINSURANCE, WHICH
FOR THOSE NOT FAMILIAR IS LIKE
INSURANCE, BUT FOR INSURANCE
COMPANIES THAT HAS SURGED IN
COST AND THE U. S WE HAVE
INCURRED OVER 70% OF GLOBAL
INSURED LOSSES. AND EACH OF THE
LAST THREE YEARS AND WE ARE ON
TRACK TO REPEAT THAT AGAIN SO
FAR THIS YEAR. SO THE LARGE
VOLUME OF NATURAL DISASTERS HAS
RESULTED IN MUCH HIGHER
REINSURANCE PRICES. FOR LESS
COVERAGE FOR COMPANIES, WHILE
OTHER FORMS OF CAPITAL SUCH AS
CATASTROPHE BONDS ARE ALSO
SIMILAR, EXPERIENCING HIGHER
PRICES. SO AS A RESULT, INSURERS
ARE DILIGENTLY WORKING TO MANAGE
THE COSTS AS WELL AS THE CAPITAL
THAT THEY HAVE TO ENSURE THAT
THEY CAN FULFILL ALL THE
OBLIGATIONS FOR ALL THE RISK
THEY DO. TAKE ON THESE ARE THE
COLLECTIVE PRESSURES THAT ARE
CONTRIBUTING TO DIFFICULT
DECISIONS FROM INDIVIDUAL
COMPANIES THAT MAY NEED TO
ADJUST WHAT COVERAGE THEY ARE
ABLE TO PROVIDE TO CONSUMERS IN
THE MARKETPLACE TODAY. SO WHERE
IS THE INTERSECTION OF
RESILIENCE? TO ADDRESSING THIS
CURRENT MARKET CHALLENGE. I
THINK IT'S IMPORTANT TO FIRST
RECOGNIZE THAT THERE ARE TWO
DISTINCT CHALLENGES THAT WE DO
FACE IN CALIFORNIA. THE
CHALLENGES OF INSURANCE
AVAILABILITY. AND SEPARATELY IN
AFFORDABILITY CHALLENGE NOW
ADDRESSING THE AVAILABILITY
CHALLENGE LARGELY STEMS FROM
WHETHER INSURERS HAVE THE
ABILITY TO NAVIGATE AND ADJUST
TO MARKET PRESSURES. AND THAT
JUST LARGELY HAS NOT BEEN THE
CASE. UNFORTUNATELY WHY THERE
ARE A LOT OF DISCUSSIONS
UNDERWAY FOR THE REFORMS THAT
HAVE BEEN TALKED ABOUT EARLIER
TO ENSURE COMPANIES HAVE THE
NECESSARY TOOLS TO MANAGE THE
RAPIDLY EVOLVING RISK AND COSTS.
ASSOCIATED NOW SETTING THOSE
ISSUES ASIDE FOR TODAY'S
DISCUSSION. TO ADDRESS THE
RISING COSTS AND THE RISK THAT
OUR COMMUNITIES FACE WHICH IN
TURN IMPACTING THE AFFORDABILITY
OF INSURANCE. WE NEED TO FOCUS
ON THE UNDERLYING ISSUES. WE
NEED TO BEND THE LOST CURVE
DOWN. SO MITIGATION. THIS IS THE
KEY STRATEGY TO ACHIEVE THAT,
WHICH IS WHERE CALIFORNIA SAFER
FROM WILDFIRES FRAMEWORK DOES
COME INTO PLAY. IN WILDFIRE
REGIONS ACROSS THE U. S INSURERS
HAVE LONG ADVOCATED FOR REDUCING
THE EXCESS FUEL LOADS THAT WE
HAVE ACCUMULATED ARE WOY AREAS
AND RE EXAMINING WHERE AND HOW
WE BUILD COMMUNITIES IN THESE
WILDFIRE PRONE AREAS. THIS
INCLUDES THE LOCAL LAND USE
POLICIES, THE ADOPTION
ENFORCEMENT OF NOT JUST BUILDING
CODES BUT FOR US AND WILDFIRE,
DEFENSIBLE SPACE STANDARDS AND
STRENGTHENING THE EXISTING HOMES
AND BUSINESSES SO THAT THEY'RE
MORE RESILIENT. WHEN THESE
ACTIONS ARE DONE AT SCALE. IT
SHOULD REDUCE RESULTS IN A
MEANINGFUL DECREASE IN LOSSES,
AND THAT'S WHAT WILL ULTIMATELY
TRANSLATE TO MORE AFFORDABLE AND
AVAILABLE COVERAGE FOR
CONSUMERS. SO AS INSURERS. WE
STRONGLY SUPPORT THE SAFER FROM
WILDFIRES FRAMEWORK BECAUSE IT'S
STRONGLY ALIGNED WITH THE
SCIENCE THROUGH THE INSURANCE
INSTITUTE FOR BUILDING BUSINESS
AND HOME SAFETY. THEY HAVE AN
EVIDENCE BASED FRAMEWORK KNOWN
AS WILDFIRE PREPARED HOME, AND
THESE PROGRAMS ARE VERY STRONGLY
ALIGNED, AND THEY DO PROVIDE
CRITICAL STEPS THAT CONSUMERS
CAN TAKE TO PROTECT THEIR HOMES.
UNDER THE SAFER FROM WILDFIRE
FRAMEWORKS FRAMEWORK. YES
INSURERS ARE REQUIRED TO PROVIDE
INSURANCE DISCOUNTS FOR THEIR
ACTIONS, THOUGH WHAT WE AS
INSURERS WANT TO STRESS THAT THE
SCIENCE SHOWS THAT THESE ACTIONS
THEY NEED TO BE DONE TOGETHER.
THEY MISSED ME TAKEN TOGETHER TO
MEANINGFULLY REDUCE RISK. SO A
ONESIE TUESDAY HERE AND THEY'RE
PICKING ONE AND NOT THE REST IS
NOT GOING TO FULLY ADDRESS THAT.
IT NEEDS TO BE TAKEN TOGETHER TO
REDUCE THAT RISK, AND THAT'S
WHAT WE'VE BEEN WORKING VERY
CLOSELY WITH FIRE OFFICIALS IN
CALIFORNIA TO EDUCATE ON THAT.
WE'RE ALSO WORKING AT THE
FEDERAL LEVEL TO STEER MORE
RESOURCES TO SUPPORT THESE
EFFORTS. AT THE STATE LEVEL. FOR
EXAMPLE, OUR PRESIDENT AND CEO
DAVID SAMPSON HAS BEEN SERVING
ON A FEDERAL WILD LAND FIRE
COMMISSION FOCUSED ON WAYS TO
MITIGATE AND MANAGE WILDFIRE
LOSSES. THEY ACTUALLY JUST
RECENTLY LEASED THEIR FINAL
REPORT ON SEPTEMBER 27TH JUST
TWO WEEKS AGO, AND IT INCLUDES
UP TO 148 CONSENSUS
RECOMMENDATIONS TO HELP OUR
NATION MITIGATE AND MANAGE THE
RISK OF WILDFIRE. SEVERAL OF THE
KEY THEMES IN THE REPORT,
ENCOURAGE GREATER COLLABORATION
SHIFTING FROM REACTIVE TO
PROACTIVE. INCREASING OF COURSE
INVESTMENTS IN RESILIENCE AND
EMPLOYING URGENT AND NEW
APPROACHES. THIS IS A NATIONAL
CRISIS THAT WE ARE TRYING TO
TACKLE AND THE CONSENSUS OF THE
COMMISSION IS THAT IT EVEN
THOUGH COMPRISED OF A DIVERSE
GROUP OF EXPERTS REPRESENTING
NUMEROUS FEDERAL AGENCIES, STATE
LOCAL AND TRIBAL GOVERNMENTS AND
THE PRIVATE SECTOR ALL STRONGLY
SUPPORT THE FOCUS AND NEED FOR
GREATER MITIGATION. NOW WHAT YOU
CAN SEE HERE IS THAT THERE'S A
NUMBER OF STAKEHOLDERS IMPACTED
BY THAT. SO IT'S NOT JUST THE
INSURANCE COMPANIES, BUT IT IS
MANY STAKEHOLDERS YOURSELVES.
STATE AND LOCAL OFFICIALS
OVERSEEING THE LAND USE POLICIES
AND CODES AND PUBLIC SAFETY. WE
ARE ALSO WORKING CLOSELY WITH
THOSE IN THE CONSTRUCTION
INDUSTRY, THOSE THAT SET THE
CODES AND STANDARDS AND THOSE
THAT BUILD AND ALSO THE
FINANCIAL SERVICES INDUSTRY. WE
MUST WORK IN ALIGNMENT WAS
MENTIONED EARLIER TO HELP. THEN
THE RISK CURVED DOWN. UM THE
ALIGNMENT REALLY REQUIRES A MORE
HOLISTIC APPROACH TO FUNDING AND
INCENTIVES AND I DO BELIEVE THAT
WE CAN'T ACHIEVE THIS. THERE'S A
LOT OF TALK ABOUT GRANTS GRANTS
ARE IMPORTANT. THERE IS ALSO
OPPORTUNITY FOR LOW INTEREST
LOANS, WAIVING OR REDUCING FEES
OR PROVIDING TAX CREDITS FOR
RESILIENCE. IN ADDITION TO THE
INSURANCE INCENTIVES THAT HAVE
GOTTEN A LOT OF ATTENTION WE'RE
WORKING TOWARDS IMPLEMENTING
THOSE BUT WE DO NEED THIS TO BE
A HOLISTIC STRATEGY. THAT ALL
REINFORCES THIS IN AN ALIGNED
WAY. SO WITH THAT, I KNOW THAT
WE HAVE SEVERAL ON THIS PANEL. I
DO WELCOME THE DISCUSSION, AND
I'M VERY HAPPY TO ANSWER AS MANY
QUESTIONS YOU FOLKS DO HAVE BUT
I WANTED TO START WITH THAT IS
KIND OF JUST LEVEL SETTING. GOOD
AFTERNOON. CHAIRS CALDERON AND
CONNOLLY AND MEMBERS. ROBERT
HORRELL, EXECUTIVE DIRECTOR OF
THE CONSUMER FEDERATION OF
CALIFORNIA OR CFC. I ALSO SPENT
SIX YEARS PREVIOUSLY AS A
CALIFORNIA DEPUTY INSURANCE
COMMISSIONER. THANKS FOR THE
INVITATION TO DISCUSS THE
CONSIDERATION OF RISK AND
RESILIENCY AND ITS IMPACT ON OUR
PROPERTY INSURANCE MARKET. I'LL
DISCUSS THAT AND ALSO MAKE A FEW
BROADER COMMENTS IN MY IN MY FEW
MINUTES HERE. AND I SHOULD NOTE
THAT ESPECIALLY COMPETING WITH
THE VISUALS FROM THE FIRST TWO
PANELS. I SMARTLY CHOSE NOT TO
HAVE VISUALS FOR MY FEW COMMENT.
FOR INSURANCE COMPANIES RISK AS
PART OF THEIR BUSINESS. LET US
NOT FORGET, HOWEVER, THAT THESE
ARE FOR PROFIT ENTERPRISES. WHAT
DOES THAT MEAN? IT MEANS
MAXIMIZING PREMIUMS IS GOOD FOR
AN INSURANCE COMPANY. AND SO IS
MINIMIZING OR REDUCING CLAIMS
PAYMENTS. WHILE THAT IS CLEARLY
AN OVERSIMPLIFICATION OF MANY OF
THE MOVING PARTS, IT IS RELEVANT
TO ANY DISCUSSION. ABOUT RISK
AND RESILIENCY. HERE'S WHY
DESPITE RHETORIC COMING FROM THE
INSURANCE INDUSTRY. CALIFORNIA
REMAINS A VERY PROFITABLE MARKET
FOR INSURERS. I'LL USE DATA ON
INDUSTRY LOSS RATIOS TO MAKE
THIS POINT. AND I HAD TO MY
COLLEAGUE DOUG HELLER WITH THE
CONSUMER FEDERATION OF AMERICA
ON THIS LOST RATIO DATA AGAIN.
THIS IS DATA THAT COMES FROM THE
DEPARTMENT OF INSURANCE ITSELF.
THE LOWER THE LOSS RATIO, THE
MORE PROFITABLE THE BUSINESS FOR
THE INSURANCE INDUSTRY.
ACCORDING TO THE DEPARTMENT OF
INSURANCE IS OWN DATA. THESE ARE
THE FOLLOWING LOSS RATIOS FOR
THE HOMEOWNERS LINE OF INSURANCE
FOR CALIFORNIA OVER THE PAST
FOUR YEARS, ROUNDED TO THE
NEAREST PERCENT. IN CALIFORNIA.
IN 2019, THE LOSS RATIO WAS 33.
IN 2020 38. IN 2021 46. AND IN
20 TO 2020 TO 55. BY COMPARISON
HERE, THE NATIONWIDE LOSS RATIOS
FOR THE SAME FOUR YEARS. IN 2019
58. 2020 67% 2021 69% 2020 TO
71% EVEN IN THE LEAST PROFITABLE
OF THOSE FOUR YEARS NATIONALLY,
CALIFORNIA WAS STILL MORE
PROFITABLE. WITH THIS DATA MEANS
IS THAT ON AVERAGE, CALIFORNIA
INSURERS ONLY HAD TO PAY OUT 43
CENTS ON EVERY DOLLAR OF PREMIUM
THEY TOOK IN. WELL NATIONALLY,
INSURERS PAID OUT 66 CENTS OF
EVERY DOLLAR BETWEEN 2019 AND
2022. SO THE CALIFORNIA
HOMEOWNERS INSURANCE MARKET HAS
BEEN SIGNIFICANTLY MORE
PROFITABLE THAN THE NATION AS A
WHOLE FROM 2019 TO 2022. I
BELIEVE THAT CONTRASTS A LITTLE
BIT WITH THE DATA YOU JUST SAW
FROM ABC A. WHICH IS WHY I'M
USING CD I ZONE DATA. THE 2017
AND 2018 WILDFIRES WERE
DEVASTATING DISASTERS TO SANTA
ROSA AND OTHER NEARBY
COMMUNITIES WITH SIGNIFICANT
LOSS OF LIFE AND PROPERTY. THE
ROLES. THESE WERE ALSO FOR
INSURANCE COMPANIES TO LESS
PROFITABLE YEARS. THOUGH IT IS
IMPORTANT TO KNOW THAT ENSURES
GOT BACK ABOUT $12 BILLION FROM
P GENIE AND EDISON TO COVER MANY
OF THOSE FIRE LOSSES SINCE THE
ACTIONS OF THOSE UTILITIES AND
IN ACTIONS IN MANY CASES CAUSED
A NUMBER OF THOSE FIRES
DIRECTLY. SO WHEN INSURERS TALK
ABOUT RISK AND ARGUE FOR, AMONG
OTHER THINGS, FORWARD LOOKING
CATASTROPHIC MODELS TO BE BUILT
INTO INSURANCE PREMIUMS. WHICH
USUALLY MEANS THEY'RE GOING TO
GO UP. BY THE WAY. THE VIEW OF
CFC IS THAT CALIFORNIA SHOULD
DEVELOP A FULLY TRANSPARENT AND
PUBLICLY DEVELOPED TOOL,
LEVERAGING OUR WORLD CLASS
PUBLIC UNIVERSITY SYSTEMS AND
OTHERS. THAT WOULD HELP INSURERS
BETTER ASSESS CLIMATE RELATED
CATASTROPHIC RISK. I WANT TO
EMPHASIZE THAT POINT WE ARE NOT
OPPOSED. PER SE TO FORWARD
LOOKING MODELS, BUT WE DO THINK
THAT THERE ARE SOME REALLY
IMPORTANT PUBLIC POLICY
QUESTIONS THAT MUST BE ANSWERED
AS YOU ENDEAVOR OR AS THE
DEPARTMENT ENDEAVORS TO GO DOWN
THAT ROAD. SUCH A TOOL. SUCH A
PUBLIC SCHOOL WOULD NOT BE
PERFECT, BUT NEITHER ARE PRIVATE
PROPRIETARY MODELS MADE FOR BY
LET'S FACE IT FOR PROFIT
COMPANIES. AND MORE TRANSPARENT
MODEL WOULD HELP BUILD
CONFIDENCE IN THE VERY
COMMUNITIES LEFT BEHIND, AS SOME
INSURERS HAVE LIMITED OR REFUSE
TO WRITE NEW POLICIES IN
CALIFORNIA. THIS FORCES
HOMEOWNERS TO THE FAIR PLAN. AS
I KNOW, ALL OF YOU KNOW ALL TOO
WELL OR THE COMPLETELY
UNREGULATED SURPLUS LINES
MARKET. SO HISTORICALLY A
SURPLUS LINE INSURER. MY EXAMPLE
WAS ALWAYS LIKE A LLOYD'S OF
LONDON. YOU'RE AN ACTOR OR AN
ACTRESS OR A SINGER. YOU'RE
TRYING TO ENSURE A BODY PART.
THIS IS NOT SOMETHING YOU WALK
INTO YOUR FARMERS OFFICE AND GET
COVERAGE FOR BUT THEY HAVE NOW
JUMPED MORE INTO THE MARKET, AND
WE'VE ALSO SEEN A LOT OF GROWTH
IN THE FAIR PLAN WITHOUT A
DOUBT. THAT TREND STARTED WHEN I
WAS STILL OVER AT THE DEPARTMENT
AND HAS CLEARLY EXACERBATED
SINCE THEN. UM BUT THEY'RE
UNREGULATED. COMPLETELY
UNREGULATED. THIS BRINGS ME TO
RESILIENCY. CSC HAS ASSERTED FOR
YEARS THAT ARE MUCH STRONGER
CONNECTION IS NECESSARY BETWEEN
HOMEOWNERS WHOSE TAKE STEPS TO
HARDEN THEIR HOMES AND ENHANCED
RESILIENCY AND THE RATES AND
AVAILABILITY THOSE HOMEOWNERS
FACE AND THE MARKETPLACE. YOU'VE
HEARD PLENTY OF DISCUSSION ABOUT
THAT ALREADY IN THE FIRST TWO
PANELS, IT'S AN IMPORTANT TOPIC.
THE DEPARTMENT HAS TAKEN A FIRST
STEP, AS DEPUTY COMMISSIONER
PETERSON NOTED IN THAT DIRECTION
, BUT WE BELIEVE IF HOMEOWNERS
AND COMMUNITIES DO THE RIGHT
THING, THEN THEY SHOULD BE ABLE
TO ACCESS INSURANCE. AND
CURRENTLY THAT CONNECTION IS,
UNFORTUNATELY FAR WEAKER THAN IT
REALLY OUGHT TO BE. UM, THE
PETERSON MENTIONED AS WELL. UM,
SOME OF THE. PROPOSALS THAT CAME
IN FROM APRIL AND HE SAID THE
FAIR PLAN HAD BEEN APPROVED. WE
WOULD LOVE TO SEE IN THIS AREA
MORE RAPID ACTION BY THE
DEPARTMENT TO APPROVE SOME OF
THESE MITIGATION DISCOUNT PLANS
. WE THINK THAT THAT WOULD
REALLY HELP GET US TO, AS YOU
HEARD IN THE FIRST PANEL, THE
FIRE CHIEF, ANOTHER TALKING
ABOUT THAT SORT OF CRITICAL MASS
OF 30% AND BEYOND. ESPECIALLY IN
THE SUBURBAN AREAS. WE THINK
IT'S VERY IMPORTANT. FOR
EXAMPLE. INCOMING SENATE LEADER
MCGUIRE AND ASSEMBLYMEMBER'S
CONNOLLY. AND AT YOUR CAREER,
YOUR ALL AUTHORS OF A BILL SB 6
72 THAT WOULD ENSURE THAT
HOMEOWNERS INSURANCE IS
AVAILABLE TO THOSE WHO HAVE
FOLLOWED THE CURRENT CALIFORNIA
BEST PRACTICES FOR WILDFIRE
BUILDING HARDENING AND PROPERTY
LEVEL MITIGATION. THAT'S JUST
COMMON SENSE. IT'S NOT A
PANACEA. BUT HOME HARDENING
WORKS AND THE DATA AS YOU'VE
HEARD, IS GETTING STRONGER AND
STRONGER, ALL THE TIME THAT
BUILDS CURRENTLY LOCATED AT THE
ASSEMBLY INSURANCE COMMITTEE.
I'D LIKE TO MAKE TWO OTHER BRIEF
POINTS AS I WRAP UP MY COMMENTS
THIS AFTERNOON AND THANK YOU
AGAIN. FIRST A SIGNIFICANT
PUBLIC POLICY DILEMMA FACING
PUBLIC POLICY MAKERS AND
REGULATORS. BEYOND JUST
INSURANCE IS THE USE OF
ALGORITHMS, MODELS AND
TECHNOLOGY IN SUCH A WAY THAT IT
IS DIFFICULT FOR REGULATORS AND
LAWMAKERS TO KEEP PACE. THIS IS
NOT BRAND NEW, BUT WE'RE SEEING
NEW MANIFESTATIONS OF IT IN THIS
AND OTHER AREAS. THIS IS A
CHALLENGE VACCINE POLICYMAKERS
THROUGHOUT THE STATE NATION,
EVEN THE WORLD AND APPROPRIATE
PUBLIC POLICY RESPONSES MUST AIR
ON THE SIDE OF TRANSPARENCY SO
THAT POLICYMAKERS, REGULATORS OF
THE DEPARTMENT AND THE PUBLIC
CAN SEE AND UNDERSTAND AND PICK
APART WHAT IS GOING ON. AND WHY.
IT IS ONLY THROUGH THAT PROCESS
THAT YOU WIND UP WITH AN OPTIMAL
PUBLIC POLICY SOLUTION OR
ATHLETES AT LEAST AS CLOSE TO
OPTIMAL AS IS POSSIBLE THAT
MAXIMALLY PROTECTS CONSUMERS
WHILE STILL ALLOWING, AS PROP
103 DOES FOR SUBSTANTIAL PROFITS
TO STILL BE MADE BY PRIVATE
INSURANCE COMPANIES VIA RATE
FILING SUBMITTED TO THE
DEPARTMENT FOR PRIOR APPROVAL.
REMEMBER THAT THE REGULATOR DOES
NOT HAVE UNLIMITED RESOURCES.
THEY CANNOT MATCH FOR EXAMPLE,
THE MARKET RATE FOR NUMEROUS
PROFESSIONS ONE THAT REALLY
JUMPS TO MIND FOR ME FROM MY
EXPERIENCE IS ACTUARIES. UM IT
HAS BEEN VERY DIFFICULT FOR THE
DEPARTMENT. HISTORICALLY Tð.
THINK TO RETAIN, LET ALONE GET
IN THE DOOR TOP NOTCH ACTUARIES
BECAUSE THE PAY SCALE IS JUST
DRAMATICALLY DIFFERENT FROM WHAT
THEY CAN MAKE FROM THE PRIVATE
INSURANCE COMPANIES. ALL OF
THESE THINGS TOGETHER,
CONTRIBUTE TO THE DEEP NEED FOR
TRANSPARENCY. FINALLY. I AM A
LITTLE BIT CONCERNED THAT THE
DEPARTMENT MIGHT BE PUTTING THE
CART BEFORE THE HORSE OR FALLING
VICTIM TO ASSUMING A PARTICULAR
SET OF SOLUTIONS THAT MANY
STAKEHOLDERS HAVE YET TO SEE. I
HEARD RECENTLY FROM INSURANCE
COMMISSIONER LÀ TO A LOT OF WHAT
INSURERS HAVE WANTED AND ASKED
FOR YEARS, HIGHER RATES VIA
FORWARD LOOKING CAT MODELS,
WHICH I'VE ADDRESSED IN MY
COMMENTS AND ALLOWING FOR
COMPLETELY UNREGULATED
REINSURANCE COSTS ALSO DRIVE UP
RATES. AND YOU JUST HEARD FROM
ABC A. THAT REINSURANCE IS ONE
OF THEIR ISSUES AGAIN. THAT'S
ANOTHER INDUSTRY THAT IS
COMPLETELY UNREGULATED. SO WHEN
YOU ALLOW THOSE COSTS TO BLEED
OVER, WE VIEW THAT AS A DANGER
OF A DOUBLE CHARGING UM, WHEN
YOU TAKE AN UNREGULATED INDUSTRY
THAT CAN BASICALLY MAKE THEIR
PRICE, WHATEVER THEY WANT. AND
THEN YOU ALLOW THOSE CUSTOM
BLEED OVER ONTO CONSUMERS. IT'S
USUALLY CONSUMERS THAT WIND UP
HOLDING THE BAG. AND WE HAVEN'T
SEEN THAT PUSH AND PULL WHERE BY
PAYING MORE. THERE. RETAINED IN
THE MARKET OR THEY'RE NOT CUT
OFF IN OTHER WAYS. WHAT I HEARD
LESS OF FROM THE COMMISSIONER A
COUPLE WEEKS AGO WAS THE
STRENGTHENING OF RESOURCES TO
HELP HOMEOWNERS AND COMMUNITIES
INCREASE THE RESILIENCE, THOUGH
IN FAIRNESS IT IS MENTIONED AS
PART OF THE PLAN. WE JUST
HAVEN'T SEEN THE DETAILS YET.
I'M ALSO CONCERNED, TO BE HONEST
THAT MANY STAKEHOLDERS HAVE BEEN
LARGELY SHUT OUT OF THE PROCESS
UNTIL NOW. MY PARTICIPATION HAS
BEEN WHEN THERE'S BEEN PUBLIC
FORA. PUBLIC FOR THAT IS OPEN TO
THE PUBLIC. BUT THERE ARE OTHER
CONVERSATIONS THAT ARE HAPPENING
THAT WE THINK ALL STAKEHOLDERS
MUST BE IN EVEN JUST LOOKING AT
THE A. P. C. A IS SLIDE FROM A
FEW MINUTES AGO. THAT WAS ALL
INDUSTRY PARTNERS. LINKING ARMS
TOGETHER. CONSUMER ORGANIZATIONS
. PEOPLE REPRESENTING CONSUMERS
ARE STAKEHOLDERS IN THIS AREA,
AND WE SHOULD BE PART OF THE MIX
IN A MEANINGFUL WAY. THE DETAILS
ARE FORTHCOMING ON THE
COMMISSIONER'S PLAN. I LOOK
FORWARD TO SEEING THEM AND WE'RE
HAPPY TO PLAY A CONSTRUCTIVE
ROLE AND TRYING TO HELP
CONSUMERS AND HELP CALIFORNIA
MOVE FORWARD WITH THAT I'LL
CONCLUDE MY COMMENTS AND I'M
HAPPY TO TAKE QUESTIONS AT THE
END OF THE PANEL. THANK YOU VERY
MUCH. OKAY. THANK YOU. UM. SARIN
TAYLOR ON BEHALF OF THE PERSONAL
INSURANCE FEDERATION OF
CALIFORNIA. THANK YOU FOR THE
OPPORTUNITY TO PARTICIPATE IN
TODAY'S DISCUSSION. AH, UM
BEFORE I START. I'VE BEEN
WAITING IN MY MIND WHETHER TO
BRIEFLY SORT OF COMMENT ON MR
HARRELL'S UNIQUE OPINION. AT
INSURERS ARE SOMEHOW LEADING,
VERY PROFITABLE LIVES IN
CALIFORNIA. BEYOND THE MOST
OBVIOUS POINT THAT IT MAKES NO
SENSE, THESE COMPANIES WOULD BE
HITTING THE PAUSE BUTTON. ON
THIS SUPPOSEDLY LUCRATIVE
CALIFORNIA BUSINESS. AND I HATE
TO GET INTO A SORT OF, HE SAID,
SHE SAID, OR YOU KNOW TWINS,
IAIN, UH, WISE LIES AND
STATISTICS. WHAT I THOUGHT IT
WOULD BE NOTABLE UH UM, SINCE
HE'S TALKING ABOUT THE
DEPARTMENT OF INSURANCE. THIS IS
IN FACT, THE DEPARTMENTS OF
INSURANCE CALIFORNIA SUSTAINABLE
INSURANCE STRATEGY. IT'S ON
THEIR WEBSITE. IN THIS DOCUMENT
FROM THE DEPARTMENT OF
INSURANCE. IT SAYS. OVER THE
PAST 10 YEARS, HOMEOWNERS
INSURANCE COMPANIES HAVE DONE
FAR WORSE IN CALIFORNIA. THEN
NATIONALLY. DIRECT UNDERWRITING
PROFIT COUNTRYWIDE 3.6%
CALIFORNIA MINUS 13.1. DIRECT
PROFIT ON INSURANCE TRANSACTIONS
. COUNTRYWIDE 4.2. CALIFORNIA
MINUS 6.1. DIRECT RETURN ON NET
WORTH COUNTRYWIDE 7, CALIFORNIA
0.8% AND THAT'S FROM THE
NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS.
PROFITABILITY REPORT RELEASED
JANUARY 2023 SO. JUST SET A
LITTLE RECORD STRAIGHT THERE,
AND I THINK I'D ALSO JUST NOTE
THAT AM BEST, WHICH IS A 100
YEAR OLD COMPANY THAT ISSUES
FINANCIAL STRENGTH. UM
MEASUREMENTS OF INSURANCE
COMPANIES ABILITY TO PAY CLAIMS
THEIR DESIGNATED AS AND
NATIONALLY RECOGNIZED
STATISTICAL RATING ORGANIZATION
BY THE U. S SECURITIES EXCHANGE
COMMISSION AND THE NATIONAL
ASSOCIATION OF INSURANCE
COMMISSIONERS, AND JUST THREE
WEEKS AGO A M BEST REVISED ITS
OUTLOOK FOR THE U. S HOMEOWNERS
SEGMENT FROM STABLE TO NEGATIVE.
SPECIFICALLY BECAUSE OF THE
DETERIORATING HOMEOWNERS
PERFORMANCE RELATED TO ALL THE
FACTORS THAT, MISS COLLINS NOTED
EARLIER. ELEVATED NATURAL
DISASTER IS RISING INFLATION
HARDLY INSURANCE MARKET. SO I
JUST THINK THERE'S NOTION THAT
INSURERS ARE DOING FINE AND, YOU
KNOW, IT'S SORT OF A DISSERVICE
TO EVERYONE WHO'S WORKING HARD
TO FIND SOLUTIONS. WITH THAT I
WILL. YOU KNOW, SORT OF GET ON
MY COMMENTS. YOU KNOW, I THINK
MISS COLLINS THOROUGHLY
DESCRIBED AND A FANTASTIC JOB
TALKING ABOUT THE FINANCIAL,
REGULATORY AND CLIMATE RELATED
CHALLENGES. INSURERS ARE
CURRENTLY FACING. TRY NOT TO BE
REPETITIVE AND INSTEAD FOCUS ON
THIS CORE QUESTION OF CAN
CONSIDERATION. OF RISK AND
RESILIENCY LEAD TO PROPERTY
INSURANCE MARKET RECOVERY. AND
THE SHORT ANSWER, I THINK IS YES
. WHEN PAIRED WITH FAIR RATES
AND REASONABLE REGULATORY
PROCESSES THAT PROVIDE TIMELY
RESULTS. CALIFORNIA CAN RESTORE
INSURANCE AVAILABILITY AND
RELIABILITY. THE NEW NORMAL OF
CLIMATE CHANGE AND MASSIVE
INCREASE IN CATASTROPHIC
WILDFIRES OVER THE PAST SIX
YEARS, HAS ITS REALLY CLEARLY
PUSHED CALIFORNIA INSURANCE
MARKET OUT OF BALANCE. YEAH IN A
WAY THAT THE EXISTING 35 YEAR
OLD REGULATORY SYSTEM JUST NEVER
ENVISIONED AND IT WASN'T
PREPARED FOR I THINK, HOWEVER,
WITH THE GOVERNOR AND THE
INSURANCE COMMISSIONERS RECENT
ANNOUNCEMENT OF THE PLANS TO
IMPLEMENT THIS, YOU KNOW,
CALIFORNIA SUSTAINABLE INSURANCE
STRATEGY. WE ARE. WE ARE VERY
OPTIMISTIC THAT TOGETHER. WE CAN
RESTORE THAT BALANCE. AND THE
NEW STRATEGY, YOU KNOW, CLEARLY
ENVISIONS THAT MITIGATION
PROGRAMS SUCH AS THE I BHS
WILDFIRE PREPARED HOME PROGRAM
THAT MISS COLLINS REFERENCED THE
SAFER FROM WILDFIRE FRAMEWORK
THAT MR PETERSON DISCUSSED. UM
THESE WILL BE CRITICAL TO HELP
REDUCE RISK AND LOSS FROM
WILDFIRE AND INCREASE INSURANCE
AVAILABILITY. AND IN FACT, THE
COMMISSIONER STATED. THAT IS
INSURERS FOCUS ON MOVING
CONSUMERS OUT OF THE FAIR PLAN
AND ONTO TRADITIONAL INSURANCE.
FIRST PRIORITY WILL BE GIVEN TO
HOMES AND BUSINESSES FOLLOWING
THE NEW SAFER FROM WILDFIRES
REGULATIONS. SO YOU KNOW, WE
UNDERSTAND. PEOPLE WANT
GUARANTEES THAT IF THEY FOLLOW
ONE OF THESE MITIGATION
FRAMEWORKS, THEY WILL GET
PRICING DISCOUNTS AND COVERAGE
FROM A TRADITIONAL INSURANCE. AS
OPPOSED TO THE FAIR PLAN, WHICH
IS ITSELF A GUARANTEE OF
COVERAGE FOR ALL CALIFORNIANS.
AND MITIGATION IS EXTREMELY
IMPORTANT AND IT'S MEANINGFUL
AND SINCE THERE'S NO STANDARD IN
THE WORLD THAT GUARANTEES A HOME
WILL NOT BURN DOWN IN A
CATASTROPHIC WILDFIRE.
MITIGATION MUST BE PAIRED WITH
FAIR AND ADEQUATE RATES. AS A
STARTING POINT FOR INCREASED
AVAILABILITY AND MITIGATION
DISCOUNTS AND BASED ON PUBLIC
RATE FILINGS. WE KNOW THAT MANY
CARRIERS ARE CURRENTLY 20 TO 30%
FOR EVEN 40% RATE INADEQUATE
TODAY AND THAT'S ALSO LISTED IN
THE COMMISSIONER'S DOCUMENT
HERE. UM. AND I GUESS THE
QUESTION IS, IS IT REASONABLE TO
EXPECT UH, INSURERS TO FURTHER
DISCOUNT RATES THAT ARE 20 TO
40% UNDERPRICED TODAY. IS THAT
SOMETHING ONE WOULD EXPECT OF
YOUR LOCAL BOOKSTORE. AH YOUR
LOCAL BARBER, YOUR GROCER, A
FAMILY RESTAURANT. PROBABLY NOT.
BECAUSE NOBODY WOULD BE ABLE TO
STAY IN BUSINESS, AND THE SAME
IS TRUE OF INSURERS. RIGHT UNDER
THE CURRENT PRIOR APPROVAL RATE
SYSTEM IN CALIFORNIA. WE'RE IN
ALL RATE FILINGS MUST BE
APPROVED BY THE COMMISSIONER.
AND ARE SUBJECT TO PRIVATE PARTY
INTERVENERS. THERE IS TREMENDOUS
UNCERTAINTY. ABOUT WHEN OR EVEN
IF AN INSURER WILL RECEIVE
APPROVAL OF THEIR RATES, IT CAN
TAKE YEARS TO FINALIZE A
CONTESTED FILING. IF HYPER
INFLATION INCREASES THE COST TO
REBUILD THE HOUSE BY 30% AS MISS
COLLINS TALKED ABOUT JUST
HAPPENED. TOO BAD. ENSURES JUST
NEED TO EAT THAT LOSSES UNTIL
SOMETHING CHANGES. YOU KNOW, UM
THERE'S NO GUARANTEES OF RATE
ADEQUACY UNDER THE EXISTING
RULES. WHICH UNFORTUNATELY,
MEANS IT'S NOT POSSIBLE. FOR AN
INSURER TO PROVIDE A GUARANTEE
OF COVERAGE. UNDERWRITING
MANDATES, WHICH FORCE INSURERS
TO PROVIDE COVERAGE, REGARDLESS
OF THE RISK. REGARDLESS OF THE
FAIRNESS OF THE RATE. IT'S A
DIRECT PATH TO INSURANCE
SOLVENCY. AND FURTHER MARKET
INSTABILITY. OR EVEN POSSIBILITY
OF MARKET COLLAPSE, AND THAT'S
WHAT WE'RE TALKING ABOUT.
HOWEVER. NOT ALL DOOM AND GLOOM.
I MEAN, WE BELIEVE THE PATHWAY
BEING URGED BY THE GOVERNOR AND
DEVELOPED BY THE INSURANCE
COMMISSIONER IS INTENDED TO
ADDRESS THESE COMPLEX ISSUES.
THE GOAL IS TO PROVIDE CONSUMERS
WITH MUCH GREATER INSURANCE
AVAILABILITY, APPROPRIATE
DISCOUNTS, INCREASED
TRANSPARENCY WHILE ALSO
STABILIZING THE INSURANCE MARKET
WITH NEW RISK ASSESSMENT TOOLS
AND IMPROVED PROCESSES. YOU
KNOW, WE TALKED ABOUT CAT MODELS
. NEW CATASTROPHE MODELS WILL
RECOGNIZE HOME AND COMMUNITY
MITIGATION AND HARDENING
REQUIREMENTS TO APPROPRIATELY
PRICED RATES AND DISCOUNT
BENEFITS. THAT'S NOT AVAILABLE
IN THE CURRENT RATE MAKING
PROCESS TODAY. CALIFORNIA LIKE
OTHER CATASTROPHE PRONE STATES
IS GOING THROUGH A DIFFICULT
PERIOD. SUDDEN CHANGE AND
ADJUSTMENT. AND IT'S IMPORTANT
TO PROVIDE THOUGHTFUL LEADERSHIP
ON THESE COMPLEX PROBLEMS SO
CALIFORNIA COMMUNITIES CAN GET
THE INSURANCE MARKET STABILITY
THEY NEED TO PROTECT THEMSELVES
FROM DISASTERS, AND WE
APPRECIATE YOUR TIME. THIS
COMMITTEE'S TIME INVESTIGATING
THIS IMPORTANT ISSUES AND REALLY
GREAT QUESTIONS AND
PRESENTATIONS TODAY, SO THANK
YOU.
GOOD AFTERNOON. UM ALWAYS FUN TO
BE THE LAST SPEAKER. BUT I THINK
WE'RE ALL PRETTY ENGAGED. I CAN
TELL YOU'RE ALL LISTENING
CAREFULLY AFFECTS YOUR
CONSTITUENTS AFFECTS YOU
PERSONALLY. UM SO THANK YOU FOR
YOUR TIME FOR CONVENING THE
HEARING. I'M AMY BACH. I RUN A
NATIONAL NONPROFIT ORGANIZATION
CALLED UNITED POLICYHOLDERS. WE
HAVE ROLLED UP OUR SLEEVES. WE
ROLLED UP OUR SLEEVES. I WOULD
SAY WELL RIGHT AFTER THE OAKLAND
FIRE WHEN THERE WAS A LITTLE BIT
OF UNAVAILABILITY PROBLEM WHERE
INSURERS NON RENEWED SOME OF THE
FOLKS THERE IN THE OAKLAND HILLS
WE THOUGHT, WELL, THAT'S WEIRD.
I MEAN, THINGS BURNED. WHY WOULD
THEY PULL OUT AFTER THINGS HAVE
BURNED, BUT WE CAME TO
UNDERSTAND HOW THE RED INK WOULD
GET A CEO'S ATTENTION, AND THEY
WOULD TAKE ACTION EVEN IF IT
WASN'T FULLY TO OUR MINDS
LOGICAL. AT THAT TIME WE WERE
ABLE TO HELP CONSUMERS GET THE
THEIR INSURANCE RENEWED BY
SENDING THEM, UH, IN INTRODUCING
THEM TO INTER INDEPENDENT AGENTS
AND INTRODUCING THEM TO A
BROADER RANGE OF PROFESSIONALS.
OBVIOUSLY FAST FORWARD TODAY WE
HAVE A VERY DIFFERENT SCENARIO.
OUR ORGANIZATION HAS BEEN AROUND
SINCE 91. WE DON'T TAKE FUNDING
FROM INSURANCE COMPANIES, BUT WE
CONSIDER OURSELVES PROBLEM
SOLVERS. SO WE WORK IN
COORDINATION WITH THE DEPARTMENT
OF INSURANCE WITH THE REALTORS
WITH OUR FELLOW CONSUMER
ADVOCATES WITH THE FIREFIGHTING
COMMUNITY SCIENTISTS TO TRY TO
REALLY GET OUR MINDS AROUND. UM
WHAT'S HAPPENING TODAY, WHICH IS
SORT OF A MANIFESTATION OF THIS
CHANGES EVERYTHING. SO WE DO A
LOT OF WORK IN CALIFORNIA.
PRIMARILY, I MEAN, THAT'S THIS
IS OUR HOME BASE. OUR ROAD
MATCHES PREPAREDNESS PROGRAM.
AND DEVELOPED OUT OF THE
WILDFIRE RECOVERY WORK THAT WE
DO WHERE PEOPLE WOULD COME UP
SHORT ON THEIR INSURANCE. AND WE
WOULD SAY, OKAY, LET'S GET THE
FOLKS WHO BURNED TO BE
AMBASSADORS IN THE COMMUNITY TO
SAY TO PEOPLE. YOU KNOW, YOU
REALLY OUGHT TO PAY MORE
ATTENTION TO YOUR INSURANCE.
MAKE SURE YOU'VE GOT ENOUGH
RIGHT? BUT WHEN THIS PROBLEM
THAT WE'RE HERE DEALING WITH
STARTED MANIFESTING IN 2016. WE
HAD TO KIND OF PIVOT A LITTLE
BIT AND STOP FOCUSING ON
REMINDING PEOPLE HOW IMPORTANT
IT IS TO BE INSURED TO VALUE. UM
AND START TO REALLY HELP PEOPLE
WHO ARE IN CRISIS AND I MAKE NO
MISTAKE. THERE ARE SOME
COMMUNITIES IN THE STATE THAT
ARE REALLY SUFFERING RIGHT NOW.
THEY'RE SUFFERING FROM CRIPPLING
PREMIUMS. THERE. WERE WE THE
STORIES WE ARE ALL HEARING. OUR
MIND BLOWING, SO I KNOW YOU KNOW
SARAH AND THREW OUT SOME
NUMBERS, BUT WE KNOW WHAT'S
GOING ON IN THE MARKETPLACE IN
REAL TIME CONDOS YOU KNOW
PREMIUMS IS GOING FROM 50,000 TO
500,000. U P HAS AN OPEN SURVEY
GOING WHERE WE'VE BEEN TAKING
PEOPLE'S TEMPERATURES ON WHAT IS
YOUR PREMIUM TODAY COMPARED TO
WHAT WAS IT AND IT'S
BREATHTAKING. SOME PEOPLE ARE IN
THE 20,000, AND WE ALL KNOW
WHAT'S GOING ON. THAT'S WHY
WE'RE HERE. THAT IS, UM ME ON A
RIDE, ALONG WITH THE
FIREFIGHTING AGENCY IN MORADA.
BACK IN 2016 RIGHT AFTER THE
TREE MORTALITY CRISIS HIT, THE
GOVERNOR CREATED HIS TASK FORCE
. IT'S SPRUNG AND INSURANCE
SUBGROUP. WE ALL STARTED MEETING
UP IN SACRAMENTO CAL FIRE AND,
UM, AND INSURERS AND, UM AND I
LEARNED AT THAT TIME THAT THERE
WERE A LOT OF FIRE DEPARTMENTS
IN THESE RURAL AREAS THAT WHEN
THEIR RESIDENTS WOULD GET A NON
RENEWAL NOTICE. THEY CALLED THE
FIRE DEPARTMENT OR THEY RUN INTO
THE FIRE CHIEF IN THE
SUPERMARKET AND SAY, COULD YOU
COULD YOU HELP ME CONVINCE THE
INSURER NOT TO DROP ME AND THAT
WAS WORKING. THE FIRE AGENCIES
WOULD GO OUT. THEY DO THE
INSPECTION RIGHT? THE REPORTS
GIVE A LETTER PERSON WOULD USE
IT TO THEIR INSURER WOULD SAY
OKAY, ALRIGHT, WE'LL RECONSIDER
YOUR BACK ON. SO WE THOUGHT
THERE'S A GEM OF AN IDEA. LET'S
SEE WHAT WE CAN DO WITH THAT,
RIGHT? THIS IS A COMPLEX CRISIS
HERE, RIGHT? YOU KNOW, WE ALL
KNOW THAT YOU HEARD YOU HEARD
KAREN TALK ABOUT INFLATION AND
THE HEART. MARKET AND ALL THESE
EXTERNALITIES THAT ARE AFFECTING
OUR MARKET. UM COMPLETELY
UNRELATED TO PROP 103 OR ANY OF
THE ARGUMENTS ABOUT PRIOR
APPROVAL. THIS IS THERE'S A
NATIONAL PHENOMENON AFFECTING
THE PNC SECTOR AND THE
REINSURANCE SECTOR. RIGHT SO
WHAT ARE WE SEEING? YOU ALL KNOW
THAT'S WHY WE'RE HERE. THESE
RISK SCORES, WHICH ARE WHICH
HAVE HAD A VERY DRAMATIC
NEGATIVE EFFECT ON HOMEOWNERS.
JUST YOU KNOW, JUST KIND OF LIKE
A CREDIT SCORE RIGHT? IT CAN
REALLY, REALLY HURT YOU
FINANCIALLY. DRONE IMAGERY.
INSURERS ARE SCARING. BASICALLY
THEY'RE GETTING SCARED OUT OF
DOING WHAT THEY DO RIGHT BY THIS
MAGNIFIED RISK. OH MY GOD! LOOK
AT THE PROPANE TANK. LOOK AT THE
TREE OVER THE HOUSE. ALL THOSE
THINGS SO THIS IS ALL WHAT'S
BRINGING US TO WHERE WE ARE
TODAY? RIGHT? UM YES, WE ARE ALL
FRUSTRATED MITIGATION DISTRICT
ACCOUNTS THAT THE COMMISSIONER
WORKED HARD AND WE ALL WORKED
HARD TO PUT INTO PLACE. THEY THE
INSURERS FILED THEIR PLANS IN
THE SPRING AND WE WERE HOPING BY
NOW WE WOULD BE SEEING THE
DISCOUNTS. SO FAR. WE'VE ONLY
SEEN ONE APPROVED THE FAIR PLAN,
AND IT'S GOOD IT CAN BE. IT CAN
BE UP TO 15% AND WE'VE ALREADY
DONE TWO PROGRAMS. MY
ORGANIZATION, ONE OF THEM IN
PARTNERSHIP WITH YOU, COUNTY,
EDUCATING RESIDENTS ON HOW YOU
GET THAT 15% FAIR PLAN DISCOUNT.
WHY ARE THE OTHER ONES SO SLOW?
THEY WERE LESS THAN INDICATED
THE INSURERS DID NOT REALLY COME
IN WITH A FULL OF FULL PLAN THAT
HONESTLY WOULD GIVE THE
APPROPRIATE DISCOUNTS. I THINK
THE DEPARTMENT IS WRANGLING
TRYING TO FIGURE THAT OUT, UM,
SO AS NOT TO DISAPPOINT BECAUSE
IT IS SO CRITICAL THAT WE GET
THESE DISCOUNTS BECAUSE IT'S
GONNA YOU KNOW WHEN YOU TALK
ABOUT THE TWO WHEN ASSEMBLY
MEMBER WOULD TALKED ABOUT TWO
OUT OF THE THREE HAVE DONE THEIR
THING, AND THE ONE IS SITTING
THERE AND WE KNOW WE NEED
COMMUNITY WIDE. WELL OKAY, SO IF
THE WE NEED THE ONE TO HAVE TO
BE PENALIZED BY PAYING FULL RATE
WHILE HIS OR HER NEIGHBORS ARE
GETTING A DISCOUNT, RIGHT,
THAT'S THE KIND OF SIGNAL THAT
WE NEED. THOSE DISCOUNTS HAVE TO
GET IN PLACE TO INSPIRE PEOPLE.
OKAY I'M ON A TIGHT BUDGET. BUT
I'M GOING TO SPEND SOME MONEY
HERE TO FIX WHAT HONESTLY
DOESN'T SEEM BROKE, BUT THE
EXPERTS ARE TELLING ME I NEED TO
DO THESE THINGS. I'LL DO THEM,
RIGHT. THAT'S WHAT WE NEED SO
EVOLVING PRIORITIES. I TALKED
ABOUT THIS. UM WHAT'S THE BOTTOM
LINE FOR CONSUMERS? WE KNOW IN
BRUSH HEAVY REGIONS AND AREAS
IMPACTED BY PAST WILDFIRES,
PREMIUMS HAVE DOUBLED AND
TRIPLED. WE ARE SEEING MORE
PEOPLE GOING THERE. WE SAW IT IN
A LOT OF THESE SMALLER WILDFIRES
THAT WE'VE BEEN RESPONDING TO
MORE AND MORE PEOPLE HAVE NO
INSURANCE. UM WE KNOW HOW
IMPORTANT THE AGENT COMMUNITY IS
NOW, BUT THERE ARE, OF COURSE,
ALSO IN FREEFALL AND HURTING. A
LOT OF AGENTS ARE REALLY, REALLY
STRUGGLING TO PUT THEIR PEOPLE
ANYWHERE ABOUT THE FAIR PLAN.
YOU HEARD ROBERT MENTIONED. THE
NON ADMITTED THE SURPLUS LINES.
COMPANIES THAT PICKED UP A
BIGGER SHARE. AND THEY WERE ALSO
PROVIDING THESE D I C PAIR TO
THAT YOU CAN PAIR WITH A FAIR
PLAN POLICY SO THAT YOU GET YOUR
LIABILITY COVERAGE IN YOUR WATER
AND YOUR WIND. BUT EVEN THAT
MARKET IS A LITTLE A LITTLE. UM
I DON'T KNOW. JAENKE CAN YOU USE
THAT WORD RIGHT NOW? UM, SO, BUT
WE DON'T KNOW HOW WHAT
PERCENTAGE OF CONSUMERS HAVE
GONE WITH THESE NON ADMITTED COS
WE DON'T KNOW WHAT PERCENTAGE OF
CONSUMERS HAVE HAD THEIR LENDER
THEIR MORTGAGE COMPANY FORCED
PLACE. WE SHOULD HAVE A NATIONAL
SURVEY AND THE FEDERAL INSURANCE
OFFICE WAS READY TO DO IT TWO
YEARS AGO, BUT THEN THE STATE
SAID, NO. WELL YOU KNOW WE'RE
GOING TO DO IT. SO NOW WE'RE
STILL TRYING TO FIGURE OUT WHERE
THINGS ARE ALL RIGHT. UM MY
ORGANIZATION IS IN THE TRENCHES
ALL THE TIME DOING WEBINARS AND
UPDATING. PEOPLE TELLING THEM
WHAT THE RULES ARE, YOU KNOW,
AND YOU GET NON RENEWED. YOU
NEED EVERY DAY OF THE 75 DAYS TO
SHOP, RIGHT? UM PEOPLE ARE
SHOCKED. WHAT DO YOU MEAN? THE
GOVERNMENT GOVERNMENT CAN'T
FORCE AN INSURANCE COMPANY TO
OFFER ME A POLICY EVEN IF I DO
EVERYTHING UM, THAT'S A
POLITICAL HOT POTATO FOR YOU.
ALL RIGHT, AND THAT BILL THAT
SENATOR MCGUIRE INTRODUCED WHICH
WE ARE VERY SUPPORTIVE OF. WE
FEEL LIKE WE GOT TO GO THERE
BECAUSE WHEN YOU GO TO OTHER
STATES THAT PASSED SORT OF LIGHT
MITIGATION MANDATES AND INSURERS
SHOULD GIVE YOU A DISCOUNT. THEY
WILL TELL YOU HONESTLY TODAY WE
SHOULD HAVE. WE SHOULD HAVE
ORDERED A SPECIFIC WE SHOULD
HAVE EITHER ORDERED A 15%
DISCOUNT, WHICH WAS WHERE WE
WANTED TO START. BUT THE BUT THE
INSURER SAID DON'T DON'T FORCE
SOME ARTIFICIAL, YOU KNOW NOT
WARRANTED BY SCIENCE NUMBER, BUT
I THINK FORCING A DISCOUNT IS
CRITICAL BECAUSE INSURERS ARE
THEY ARE THEY ARE GOING TO ACT
ON DATA. AND WHERE ARE WE? IT'S
GONNA BE A WHILE BEFORE WE GET
THE LEVEL OF MITIGATION
PENETRATION THAT WE NEED. BUT IF
WE ARE SO ANXIOUS NOW TO LOOK
FORWARD YOU CAN PROJECT THAT FOR
DARN SURE, WITH THE BRICK GRANTS
WITH THE STATE GRANTS THAT ARE
COMING DOWN AND ALL THE PROGRAMS
NOW THAT ARE IN PLACE, THERE'S
GONNA BE A LOT MORE MITIGATED
HOMES. SO, UM SO WE DO. WE DO
HAVE SOME PROGRESS HERE. UM I'M
GONNA SKIP THROUGH ALL THIS. UM
YOU HEARD THE CONCERN THAT THE
PEOPLE WHO ARE GOING WITH THE
NON ADMITTED INSURERS DON'T HAVE
THE PROTECTION OF SIGA OF THE
INSOLVENCY FUND. THAT'S A
SERIOUS CONCERN, BECAUSE I ALSO
WE JUST DID A I JUST DID A
WEBINAR LAST WEEK FOR HURRICANE
IAN PEOPLE AND THE PEOPLE WHO
HAVE WHOSE CLAIMS ARE GOING
THROUGH FIGGE. THEIR VERSION OF
SIGA. THEY'RE ACTUALLY GETTING
THEIR CLAIMS PAID, BUT THE
PEOPLE THAT ARE WITH THESE
REALLY FUNKY COMPANIES THAT ARE
SORT OF PRIVATE EQUITY FUNDED,
YOU KNOW, THEY BROUGHT HIM IN TO
TAKE PEOPLE OUT OF THEIR OF
THEIR CITIZENS, WHICH IS THEIR
FAIR PLAN. THEY'RE NOT
PROCESSING CLAIMS SO WELL, SO IT
IS IMPORTANT THAT WE HAVE THESE
SAFETY NETS AND THAT PEOPLE ARE
NOT OUT THERE, UM, WITHOUT
WITHOUT A SAFETY NET, SO WE
TEACH PEOPLE HOW TO DO THEIR
HOMEWORK. THIS IS MORE BAD NEWS.
A LOT OF INSURERS HAVE STOPPED
OFFERING INSTALLMENT PAYMENTS
THEY WERE MAKING PEOPLE PAY
THEIR PREMIUMS AND FULL UPFRONT.
THAT'S SOMETHING LEGISLATURA
MAYBE. COULD COULD DO SOME WORK
ON. UM WE ALL AGREE. MITIGATION
IS A GOOD THING. THAT'S THE ONE
AREA EVERYBODY'S ON THE SAME
PAGE, BUT IT IS EASIER SAID THAN
DONE, RIGHT, SO WE ARE SURVEYING
TO KEEP THINGS GOING. BUT MY
ORGANIZATION NOW SINCE SINCE
ABOUT THREE YEARS, WE'VE HAD A
MONTHLY MEETING. WE HAVE A WE
CALL IT THE RAP GROUP WILDFIRE
RISK REDUCTION ASSET PROTECTION.
WORKING GROUP. WE'VE GOT
COUNTIES OFFICIALS WE'VE GOT CAL
FIRE. I BHS. WE'VE GOT
PROFESSORS. WE'VE GOT ALL THE
CITIZEN GROUPS WITH FIRE WISE
AND FIRE SAFE AND COPE.
EVERYBODY'S TALKING. OH, YOU
KNOW, WHAT'S A WHAT DO YOU HOW
DO YOU CONVINCE PEOPLE WHO ARE
RELUCTANT? HOW DO YOU MOVE THE
NEEDLE HERE, RIGHT? BECAUSE THIS
IS THE LOW HANGING FRUIT IF YOU
DON'T WANT TO FORCE PRIVATE
INSURERS TO TAKE CUSTOMERS THEY
DON'T WANT AND THERE'S AN
ARGUMENT THAT WE MAYBE SHOULD.
THEN YOU GOT TO DO EVERYTHING
YOU CAN TO SUBSTANTIVELY REDUCE
THE RISK NOT JUST TO GET PEOPLE
ELIGIBLE TO KEEP INSURANCE BUT
TO BE ABLE TO SAVE HOME. SO
WE'VE MADE A LOT OF PROGRESS. I
THINK WE HELPED BRING ABOUT THE
I B. H S STANDARD THE SAFE FROM
WILDFIRES, WHICH ARE LARGELY THE
SAME. WE ALL NOW AGREE. THESE
ARE THE THINGS YOU NEED TO DO
THAT MOVE THE NEEDLE. NOW WE'RE
WORKING HARD TO MAKE IT
FINANCIALLY VIABLE FOR PEOPLE TO
DO IT. THIS IS JUST ONE OF THE
SCREENSHOTS AND WE'VE GOT, UM
SOME OF THE EXEMPLARY PROGRAMS
THAT WE THAT WE SHOWCASE YOU
KNOW, MARIN IS LEADING MARKS
AGENCY IS LEADING THE PACK.
WE'VE BEEN EXPOSING OTHER
ACCOUNT COMMUNITIES TO WHAT
THEY'RE DOING RIGHT. THE
MATCHING GRANTS. MY ORGANIZATION
GOT A GRANT FROM O E S. WE HAVE
A WE HAVE A RAP RESOURCE CENTER
SO YOU CAN CLICK ON YOUR COUNTY
AND YOU CAN FIND OUT WHO'S
OFFERING GRANTS WHO'S OFFERING
EVENTS TO HELP YOU VERY, VERY
CONCRETE. YOU HEARD CHIEF
WINEGAR TALKED ABOUT HOW THINGS
WILL GROW BACK AND HOW YOU KNOW
MAINTENANCE IS IMPORTANT AND HOW
, UM AND THAT REMAINS A
CHALLENGE. IS BUT NOW WE HAVE A
DESIGNATION CERTIFIED WILDFIRE
MITIGATION SPECIALIST. IT'S A
IT'S A THING. YOU CAN GET THAT
JOB NOW AND WE'RE GOING TO HAVE
A LOT MORE OF THOSE FOLKS GOING
AROUND. UM AND WORKING. AND THIS
IS THIS IS AN EXAMPLE IN MARIN.
THEY'VE GOT THEY THEY HAD SOME
OF THE PEOPLE IN THEIR
DEPARTMENT. GET THAT SPECIALTY.
NOW THEY GO OUT AND THEY'VE DONE
5000 AND AT THAT TIME
EVALUATIONS COMPLETED AND THIS
IS HERE'S NAPA. THEY JUST GOT A
37 $7 MILLION GRANT. THEY'RE
DOING DEFENSIBLE SPACE MATCHING
THERE'S GREAT ENERGY GOING ON
HERE. LOOK AT NOVATO. NOW, GRANT
ADMITTED THEY HAVE YOU KNOW
COMMUNITY MEMBERS WHO HAVE THE
MEANS TO KICK IN FOR A MATCHING
GRANT. NOT EVERY COMMUNITY DOES,
BUT THIS IS THE INNOVATION
THAT'S GOING ON AND IT'S GOING
TO BE MOVING THE NEEDLE. UM WE
NEED THOSE REWARDS. WE NEED THE
DISCOUNTS. FOR ALL THOSE REASONS
, THE STRUCTURE LESS LIKELY TO
BURN, UM, IMPROVING PEOPLE'S
RISK SCORES AND GETTING THINGS
BACK ON TRACK. I BHS HAS A GREAT
PROGRAM LITTLE SLOW TAKE UP
BECAUSE IT'S TRICKY TO DO
EVERYTHING ON THE LIST. SO
ALTHOUGH THEIR PROGRAM HAS BEEN
GOING FOR A YEAR THEY'VE ONLY
CERTIFIED 68 HOMES IN CALIFORNIA
. SO WE DEFINITELY LOVE THAT THE
SAFER FROM WILDFIRES IS A LITTLE
MORE FLEXIBLE, AND WE'RE HOPING
THAT THAT'S GONNA GET US WHERE
WE NEED TO GO. SO IN IN WRAPPING
UP LOTS OF PROGRESS. YOU'VE
HEARD ALL THIS INNOVATION ON
SHADED FUEL BREAKS AND
EVERYTHING ELSE. UM, CHALLENGES
REMAIN. RIGHT UM, INSURERS ARE
STILL KIND OF ON THE FENCE WITH
THE DISCOUNTS. THEY'RE STILL
KIND OF WANTING TO. WE WANT TO
SEE MORE DATA. BUT AGAIN, WE
DON'T HAVE THE TIME FOR THAT. WE
KNOW PEOPLE ARE GOING TO BE
MITIGATING MORE BECAUSE THEY'RE
DESPERATE. THEY'RE DESPERATE TO
KEEP THEIR INSURANCE. SO UM, WE
WANT TO SEE A LITTLE MORE
FLEXIBILITY WITH THE 5 FT OF
CLEAR SPACE BECAUSE THAT'S SUCH
A HARD THING FOR SO MANY PEOPLE
TO SWALLOW, UM AND A LOT OF FIRE
EXPERTS SAY 2 FT IS ENOUGH. BUT
I RESPECT THE OPINIONS OF THOSE
WHO SAY IT HAS TO BE A HARD
FIGHT. WE DO NEED TO MODEL FOR
HOMEOWNERS THAT YOU CAN STILL
HAVE AN ATTRACTIVE HOUSE. EVEN
IF YOU DO ALL THESE THINGS,
THAT'S IT. THAT'S SORT OF A
MINDSET THING. UM AND YOU KNOW
WHAT IS THE ONE OF THE BIGGEST
CHALLENGES IS THE ENORMOUS
POWER. I'M WRAPPING UP THAT
REINSURERS HAVE OVER OUR MARKET
. YOU CAN SEE THAT THE FACT THAT
WE DON'T REALLY HAVE AN
ALTERNATIVE THAT ARE FAIR PLAN
IS DEPENDENT ON THERE BEING
ADMITTED. INSURERS WRITING
BUSINESS IN THIS STATE HAS US IN
A BIND. THAT IS ONE OF THE
REASONS WHY I'VE TRIED TO LISTEN
SO CAREFULLY TO WHAT INSURERS
ARE SAYING THEY NEED IN ORDER TO
COME BACK, AND THAT'S WHY WE? WE
WE SUPPORT THE DEPARTMENT IN
INNOVATING AND SAYING, OKAY, CAT
MODELS MIGHT NOT BE THE
INSTRUMENTS OF SATAN, SINCE
EVERY OTHER STATE IS LETTING US
USE THEM. MAKE SURE THE
DEPARTMENT HAS THE RESOURCES TO
CONTINUE RIGOROUSLY ENFORCING
THE PRIOR APPROVAL LAWS LOOKING
AT THE CAT MODEL ASSUMPTIONS AND
NOT JUST TAKING THEM AT FACE
VALUE, BECAUSE WE DO KNOW THAT
THE MOST OF THE CAT MODELERS ARE
FOR PROFIT COMPANIES SELLING
THEIR WARES TO INSURERS, AND WE
DO KNOW THAT INSURERS ARE GOING
TO GUESS HIGH TO PROTECT
THEMSELVES, AND IT'S OUR JOB TO
PROTECT THE CONSUMERS FROM THAT.
SO IN CLOSING, THE LEGISLATURE
HAS DONE SOME VERY IMPORTANT
THINGS. YOU'VE GOT LOTS MORE
WORK TO DO. POTENTIAL SOLUTIONS
. I'VE JUST GOT FOUR AND I'M
DONE ENHANCED RESOURCES FOR THE
D¯ÚI. SO THEY REALLY HAVE ENOUGH
HANDS ON DECK TO REVIEW THOSE
RATE FILINGS. LOW INTEREST STATE
LOAN GUARANTEE FOR THE FAIR PLAN
AND C E. A THAT WOULD ALLOW THEM
INSTEAD OF BUYING THEIR FULL
COMPLEMENT OF REINSURANCE, WHICH
IS COSTING THEM AN INSANE AMOUNT
OF MONEY THAT MAYBE THEY CAN
ONLY THEY CAN BUY MAYBE TWO
THIRDS OF THEIR REINSURANCE AND
KNOW THAT THAT OTHER THIRD IS
GOING TO BE IS GOING TO BE A
LOAN GUARANTEE FROM THE STATE OR
THE FEDS. I THINK THAT IS A
CRITICAL TOOL WE HAVE TO DEVELOP
BECAUSE YOU CAN SEE WE DON'T
HAVE A LOT OF LEVERAGE HERE. WE
DON'T HAVE A PLAN B. IT'S ALL
OUR WHOLE SYSTEM OF PROPERTY
OWNERSHIP AND REAL ESTATE.
BUYING AND SELLING IS DEPENDENT
ON THE PRIVATE INSURERS. WE DO
NEED A PUBLIC CAT MODEL. UM AND
I DO THINK THAT JUST LIKE THE
MUNICIPALITIES WERE ALLOWED TO
GET TOGETHER WHEN INSURERS
ABANDONED ABANDONED THEM AND
THEY WERE ALLOWED TO DO SELF
INSURANCE POOLING. WE'RE GOING
TO HAVE TO EXPLORE THE
FEASIBILITY OF LETTING MAYBE
CONDO ASSOCIATIONS FORM THEIR
OWN SELF INSURANCE POOLS BECAUSE
WE REALLY JUST CAN'T KEEP GOING
THIS WAY. IT'S JUST, YOU KNOW,
THE COMMISSIONER HAS BEEN
GRANTING RATE INCREASES AT A
RAPID PACE, AND YOU CAN SEE
WHERE THINGS ARE AND YOU STILL
HAVE INSURANCE, SAYING THEY'RE
NOT GETTING ENOUGH RATES. SO WE
HAVE TO BE CREATIVE HERE AND
THANK YOU SO MUCH FOR YOUR TIME
AND FOR THIS HEARING, AND I
APPRECIATE THE OPPORTUNITY,
ANSWER ANY QUESTIONS? THANK YOU
. I'M GOING TO OPEN UP FOR
QUESTIONS RIGHT NOW. GO AHEAD.
ASSEMBLE THEM. SO YOU MENTIONED
PUBLIC CAP MODEL JUST AT THE
VERY END. AND FIRST I WANT TO
THANK EVERYBODY FOR BEING HERE.
AND YOU, MR HAROLD TALKED ABOUT
TRANSPARENCY SAID WHAT'S COME TO
MIND AND YOU TALK ABOUT
RESOURCES, THE DEPARTMENT OF
INSURANCE ALL OF THOSE THINGS.
YEAH YOU KNOW WHAT'S BEEN
ROLLING AROUND IN MY HEAD FOR A
WHILE IS PERHAPS, AND IT'S BEEN
SUGGESTED. WE HAVE SOME
INDEPENDENT SOURCE THAT PEOPLE
PAY FOR PEOPLE INSURANCE
COMPANIES PAY FOR AND WE'RE ALL
GOING TO BE BOUND BY THE
INDEPENDENT SCIENCE AS TO WHAT
THE MODELING SHOULD BE, AND IF
YOU WANT TO COMMENT, COMMENT, GO
AHEAD. IT'S REALLY NOT A
QUESTION. IT'S JUST SOMETHING
THAT'S BEEN ROLLING AROUND IN MY
HEAD AND THEN WE'RE NOT FIGHTING
ABOUT IT ANYMORE. ALL I WAS
GOING TO SAY IS LIKE CAL POLY
COOPERATIVE EXTENSION, STANFORD
A LOT OF ACADEMICIANS AND FIRE
SCIENTISTS HAVE BEEN ON THIS ON
THE MODELING THING. AND SO IT'S
REALLY A MATTER OF HAVING HAVING
A MODEL THAT IS NOT COMMERCIALLY
DERIVED TO BE A BENCHMARK AND
INSURANCE COMPANIES COULD DO
THEIR OWN TOO, AND SAY SURE, I
WANT TO COMPARE MY SCIENCE WITH
YOUR SCIENCE. BUT THAT ONE SEEMS
LIKE IT'S EASY TO SOLVE FOR ME,
BUT MAYBE YOU DON'T LIKE IT. I
DON'T KNOW, BUT I'M JUST TRYING
TO GET TO THE BOTTOM LINE HERE.
WE JUST EVEN MENTIONED IN MY
COMMENTS. I THINK THAT YOU KNOW,
TAPPING INTO HIS AMY JUST
MENTIONED THE PUBLIC ENTITIES
THAT ARE EITHER ALREADY DOING
THE WORK HERE BUT ARE VERY
INTERESTED IN DOING THE WORK.
THERE'S REALLY NO REASON NOT TO
UM AND YOU KNOW, I HAVEN'T
EXPLORED THIS IN GREAT DETAIL,
BUT THERE'S PROBABLY A WAY FOR
SOME OF THE PRIVATE MODELERS TO
PARTICIPATE. HAVING SAID THAT
THEY'VE JUST GOT YOU KNOW, RIGHT
NOW THERE'S A DIFFERENT
MOTIVATION. I GET IT. IF YOU'RE
A FOR PROFIT COMPANY, YOU'RE
TRYING TO SELL YOUR PRODUCT TO
THE INSURANCE COMPANY. AND MORE
OFTEN THAN NOT THAT PROBLEM
SOMETIMES FOR THE SCORES. THEY
SELL THE PRODUCT AND THEN IT
KIND OF GIVES THEM POSSIBLE TO
LIABILITY. WELL WE DON'T MAKE
ANY DECISIONS ABOUT WHETHER YOU
GET RENEWED OR NOT RENEWED OR
WHATEVER. WE'RE JUST PROVIDING
THAT INFORMATION TO THE INSURER,
AND WHAT THEY DO WITH IT IS
THEIR BUSINESS, AND I THINK
THAT'S FRUSTRATING FOR CONSUMERS
BECAUSE IT FEELS LIKE HANG ON.
EVERYBODY'S TELLING ME DO THESE
THINGS RIGHT? AND AS AMY POINTED
OUT, WE'RE ALL WOULD NEVER WOULD
PUT WORDS IN THE MOUTHS OF MY
INSURANCE INDUSTRY FRIENDS, BUT
I DO THINK YOU HEARD
CONSISTENTLY. MITIGATING. DOING
THESE THINGS. THESE ARE GOOD
THINGS. IF WE'RE ALL IN
AGREEMENT ON THAT, THEN WHY IS
THE CONSUMER GETTING THIS
DISCORDANT MESSAGE? THAT'S IT'S
TROUBLING. AND AS A MEMBER,
CONNOLLY, YOU MENTIONED THAT AS
WELL. JUST ONE FOLLOW UP. UH SO
I APPRECIATE WHAT AMY DOES,
BECAUSE THE INSURANCE BUSINESS
IS VERY SOPHISTICATED BUSINESS.
I'VE BEEN A LAWYER FOR 100 YEARS
AND I STILL FIND IT
SOPHISTICATES. I APPLAUD WHAT
YOU'RE DOING TO AT LEAST GET THE
PUBLIC ON BOARD. I JUST WANT TO
MAKE A COMMENT AND THAT IS, I DO
THINK PEOPLE HAVE RELIGION RIGHT
ABOUT NOW, BECAUSE IT IS IT IS
FROM HERE TO THE HEATHERS. THAT
PEOPLE ARE CONCERNED. AND IF YOU
FOLKS ARE LOSING BLEEDING MONEY,
TO THE EXTENT YOU'RE BLEEDING
MONEY, THE BULLETS LET'S GET
BEYOND THAT. BECAUSE WE'RE ALL
FRIGHTENED AND WELL. INFLATION
MIGHT BE A PROBLEM. IF PEOPLE GO
OUT OF BUSINESS, IT'S GOING TO
BE A WHOLE LOT WORSE. SO I'M
HOPEFUL THAT THERE CAN BE THAT
CONNECTION. THAT'S MORE OF A
COMMENT THAN A QUESTION. BUT I
THINK WE'RE ON THE PRECIPICE. I
THINK YOU HAVE ENOUGH PEOPLE'S
ATTENTION. THAT YOU'RE GOING TO
SEE MORE AND MORE HOLD
HARDENING. I DIDN'T WANT TO
SPEND THE MONEY. BUT I'M GOING
TO SPEND THE MONEY NOW BECAUSE
MY TWO OTHER NEIGHBORS HAVE A
FAR REDUCED PREMIUM THAN I HAVE
OR WHATEVER IT MAY BE. WE'RE NOT
QUITE THERE, BUT I THINK WE'RE
ON OUR WAY FOR WHAT THAT'S
WORTH. UM NOT A CHAIR.
ASSEMBLYMEMBER'S YEAH, JUST TO
ADD, ACTUALLY, UM WE'VE NEVER
OPPOSED THE PUBLIC MODEL, AND IN
FACT, I CAN SAY PIFF. WE
SUPPORTED ASSEMBLYMEMBER'S
FRIEDMAN HAD A BILL THAT
INCLUDED A PUBLIC MODEL AS PART
OF THAT WORK GROUP MYSELF. AND
THIS IDEA OF HAVING PUBLIC
MODELS THAT CAN BE A BENCHMARK
AND YOU CAN USE PRIVATE MODELS
AS WELL. AND THEY WHAT DID THEY
SAY? WHY ARE THEY DIFFERENT?
LET'S LET'S TALK ABOUT WHAT
ASSUMPTIONS ARE DIFFERENT.
THAT'S THAT'S ALWAYS BEEN FINE.
I MEAN, YOU KNOW, THAT CONCEPT
HAS BEEN FINE FOR US. SO. REALLY
GOOD PANEL. THANK YOU. SO ONE
QUESTION AND I THINK THIS GOES
BACK TO KIND OF A FEAR OUT THERE
IS THAT WE EMBARK ON SOME OF
THESE REFORMS. IT RESULTS IN
RATES GOING UP. UM. HOW CAN WE
ENSURE THAT INSURANCE PROVIDERS
WILL NOT LEAVE THE STATE IF
THERE IS ANOTHER CATASTROPHIC
WILDFIRE BAD? AND, FOR EXAMPLE,
THE EXPERIENCE OF FLORIDA COMES
TO MIND. SO MAINLY CHILI
INSURANCE FOLKS, BUT ANYONE WHO
WANTS TO RESPOND. WHEN IT COMES
TO PROVIDING COVERAGE FOR
CATASTROPHIC RISK. IT'S ABOUT
MANAGING YOUR CAPITAL, AND
THAT'S WHY THERE'S BEEN SO MUCH
ATTENTION ON WHAT IS THE COST OF
CAPITAL TODAY, AND CAN WE
CONTINUE TO PROVIDE THAT FLORIDA
HAS ITS OWN UNIQUE SET OF
CHALLENGES THAT THEY FORTUNATELY
ENACTED A NUMBER OF REFORMS?
DIFFERENT STATES HAVE DIFFERENT
SHADES OF DIFFERENT ISSUES.
THEY'RE ISSUES WERE MORE OF
EXTENSIVE ABUSES OF THE LEGAL
SYSTEM AND ROOFING SCHEMES THAT
REALLY STARTED TO BLEED OUT
INSURANCE COMPANIES ABSENT A
LAND FALLING HURRICANE OVER
SEVERAL YEARS. AND THOSE
PRACTICE BECAME SO PROLIFERATED
THAT COMPANIES AND THE
REINSURERS THAT PROVIDE A LOT OF
THAT CAPITAL FINALLY HAD TO SAY
THAT THIS IS JUST NOT A
SUSTAINABLE MODEL ISSUE ENACT
REFORMS. AND LAST YEAR YOU SAW A
NUMBER OF COMPANIES THAT BECAME
INSOLVENT BECAUSE OF MANY OF
THESE COSTS, EVEN WITHOUT A LAND
FALLING HURRICANE PRIOR TO
HURRICANE IN AT THE END OF THE
YEAR. SO THEY'VE TAKEN STEPS TO
REFORM THOSE YOU SEE SIMILAR
CHALLENGES. SOME OTHER STATES.
LOUISIANA IS ANOTHER EXAMPLE.
THAT'S BEEN IN THE NEWS QUITE A
BIT AND HAVE HAD SOME OF THE
SIMILAR PRACTICES THAT HAVE KIND
OF PROLIFERATED IN SOME OF THE
NEIGHBORING STATES. LOUISIANA
BEING ONE OF THEM IN CALIFORNIA.
THE CHALLENGE FOR INSURERS
REALLY IS THE REGULATORY
FLEXIBILITY TO MANAGE WHAT IS
INCREASINGLY VOLATILE. LOST
PATTERNS. IF YOU HAVE LOSSES
THAT ARE STABLE OVER THE LAST 10
OR 20 YEARS, YOU CAN USE
HISTORICAL LOSSES. TWO PRICE.
WHAT YOU THINK IS GOING TO BE
FUTURE, BUT WE JUST DON'T HAVE
THAT SAME STABILITY. THERE'S TOO
MANY NEW PIECES OF VOLATILITY,
WHETHER IT'S CLIMATE, WHETHER
IT'S THE LAND USE POLICIES,
WHETHER IT'S IN PLACE. ALL THESE
DIFFERENT PIECES ARE RESULTING
IN MUCH, MUCH HIGHER FUTURE
EXPECTED LOSSES, AND SO WHEN
YOU'RE GOING TO SEE INCREASINGLY
VOLATILE CONDITIONS, WE KNOW WE
HAVE EVOLVING CLIMATE IMPACTS
ARE GOING TO RESULT IN MORE
FUEL. AND MORE CHALLENGES. IF
YOU JUST DON'T HAVE THE TOOLS
AVAILABLE TO ME, AND IT'S NOT
JUST THE ABILITY TO PREDICT THAT
RISK. AS WELL. THE BILL TO
REFLECT THE COST OF CAPITAL
WHICH IS NEEDED TO PAY FOR THAT
LEVEL OF CATASTROPHIC EXPOSURE.
THAT'S WHERE YOU CAN'T PROVIDE
COVERAGE FOR CATASTROPHES. AND
THAT'S WHERE YOU'RE SEEING
COMMIES HAVING THE PULLBACK
BECAUSE THEY CAN'T JUST PROVIDE
COVERAGE FOR EVERYTHING ELSE,
BUT WILDFIRE. OUR LAWS ARE
STANDARD FIRE POLICY LAWS DO NOT
ALLOW THAT. AND THAT'S WHY YOU
SEE COMPANIES THAT HAVE TO PULL
BACK AND THEY END UP IN THE FAIR
PLAN, AND THEN THEY COME BACK
AND SAY, WELL, WE HAVE ENOUGH
CAPITAL DO NON CATASTROPHIC AND
SO WE'LL OFFER THAT. UNLESS WE
CAN RAISE MORE CAPITAL. SO RIGHT
NOW YOU'RE SEEING THOSE
DECISIONS FROM COMPANIES
INDIVIDUALLY LOOKING AT KIND OF
WHAT IS THEIR CAPITAL POSITION.
DO THEY HAVE ENOUGH FOR WHAT THE
FUTURE RISK OF LOSSES IS GOING
TO BE? AND IF THEY DON'T THAT'S
WHERE YOU'RE SEEING. EVEN
IMPACTS WERE FINANCIAL RATINGS
ARE BEING IMPACTED, MENTIONED
AND BEST OTHER FINANCIAL RATING
INSTITUTIONS MAY BE EVOLVING AND
LOOKING AT THESE AND SAYING YOU
NEED TO STRENGTHEN YOUR
FINANCIAL POSITION OR THAT CAN
HAVE A DOWNGRADE, WHICH THEN
EVEN FURTHER DETERIORATES THEIR
ABILITY TO RAISE CAPITAL THROUGH
THE DIFFERENT ENTITIES. SO ALL
OF THESE ARE INTERCONNECTED, BUT
ITS THE FLEXIBILITY THAT WE NEED
IN CALIFORNIA MORE THAN ANYTHING
ELSE THAT IS DISTINCTLY
DIFFERENT FROM FLORIDA OR
LOUISIANA. MANY OTHER STATES IS
THAT COMPANIES ARE JUST SO THEIR
HANDS ARE SO TIED. IN THE
ABILITY, TIMELY, ADJUST AND
RAISE IF THEY CAN'T GET THESE
OTHER PIECES, AND SO THAT IS
WHAT WE'RE TRYING TO WORK VERY
CLOSELY WITH THE DEPARTMENT AND
MANY OF YOU AS WELL IN RECENT
DISCUSSIONS TO ADDRESS AND AMY
WILL GET YEAH. I WANT TO HEAR
FROM YOU. MAYBE THE TEARED UP
MORE JUST KIND OF. REAL PER, YOU
KNOW, ON A HUMAN LEVEL IS SO. AS
WE PURSUE SOME OF THESE REFORMS.
RATES ARE GONNA GO UP. BY AND
LARGE AND. WE'RE REALLY LOOKING
AT WHAT IS THE VALUE PROPOSITION
TO CONSUMERS IN THE INSURANCE
MARKET? IF IT'S SIMPLY HEY,
YOU'RE GOING TO PAY HIGHER RATES
, PERHAPS SIGNIFICANTLY, AND THE
PAYOFF IS INSURANCE COMPANIES
ARE GOING TO LEAVE THE STATE.
THAT SEEMS UNSATISFYING,
PARTICULARLY IF THERE'S NO
GUARANTEE THEY'RE NOT. SO REALLY
, WHAT I'M TRYING TO GET OUT IS
WHAT IS THE VALUE ARE TO
CONSUMERS IN TERMS OF IF AS WE
GO DOWN THIS PATHWAY HOW CAN WE
? AS REPRESENTATIVES SAY THIS IS
HOW YOUR LIVES ARE GOING TO BE
IMPROVED? YOU'RE GOING TO HAVE
BETTER ACCESS. YOU'RE GOING TO
HAVE MORE GUARANTEES TO
AVAILABLE ADEQUATE INSURANCE. IF
YOU DO THE RIGHT THINGS, YOU'RE
NOT GOING TO LOSE YOUR INSURANCE
AND PS. UM UH, YOU'RE
POTENTIALLY GOING TO GET
DISCOUNTED RATES. SO JUST KIND
OF A TIE INTO THAT. GO AHEAD,
AMY. UM LISTEN, I DON'T ENVY ANY
ELECTED OFFICIAL IN THIS
ENVIRONMENT HERE BECAUSE I MEAN,
IT'S EASY FOR ME TO SAY TO A
GROUP AS I DID, PROBABLY SIX
YEARS AGO, THE DAYS OF PAYING
UNDER $1000 A YEAR FOR YOUR
HOMEOWNERS INSURANCE IN
CALIFORNIA OVER AS A COMFORTABLE
SAYING THAT, OKAY, MAYBE THEY
WOULD DOUBLE 2000. PEOPLE WOULD
BE THRILLED THAT YOU KNOW, IN A
LOT OF SO. I WOULD SAY, UM, YOU
KNOW, CERTAINLY, AS PART OF THE
COMMISSIONER'S ANNOUNCEMENT, IT
SOUNDED LIKE AND I REALLY AM NOT
PRIVY TO THE DETAILS, BUT THAT
THERE'S AN AGREEMENT THAT
INSURERS WILL WILL START TAKING
PEOPLE OUT OF THE FAIR PLAN AND
A CERTAIN PERCENTAGE 85% OF
THEIR MARKET SHARE AND THAT I
MEAN, I THAT THAT WOULD BE
GREAT. I THINK WE DO NEED SOME
GUARANTEES. UM I THINK, YOU
KNOW, STARTING TO LIKE WATCHING.
WHAT'S THE TRENDS? I DO THINK WE
HAVE TO BE WORKING ON A LITTLE
BIT OF A PLAN B. THAT'S WHY, YOU
KNOW, JUST SO THAT THE INSURERS
DON'T HAVE SO MUCH UNFETTERED
CONTROL OVER PEOPLE'S FINANCIAL
HEALTH IN THE STATE. AND ALSO
BECAUSE WE DON'T I DON'T KNOW.
WE DON'T THINK KNOW WHERE THE
SWEET SPOT IS. REALLY, WHAT IS
THE RIGHT PREMIUM RIGHT? IT
CAN'T IT FEELS LIKE IT CAN'T
GOING FROM 1000 TO 10,000
DOESN'T SEEM FAIR OR RIGHT. SO
YOU KNOW, IT'S IT IS IN THE MAP
HERE, RIGHT? UM AND THAT'S WHY I
THINK IT'S IMPORTANT THAT THE
DEPARTMENT BEEF UP ITS RESOURCES
TO AND THE AND THE LEGISLATURE
HELP THEM BEEF UP THEIR
RESOURCES TO REALLY DO THEIR JOB
IN THE PRIOR APPROVAL SYSTEM,
AND IT DOESN'T HAVE TO BE, YOU
KNOW, DEPENDENT ON AN INTERVENER
. IT SHOULDN'T IT SHOULD BE
DEPENDENT ON THEIR OWN CAPACITY
TO LOOK AT WHAT THE INSURERS
ASSUMPTIONS ARE, AND THAT'S OF
COURSE, ANOTHER CONCERN WE HAVE
ABOUT THE CAT MODELS IS THAT
IT'S VERY HARD, YOU KNOW, TO
PEEL BACK. HOW DID THEY GET TO
THIS NUMBER? BECAUSE FOR YOU AND
THE LAST THING I WOULD SAY YOU
KNOW, I'M IN FAVOR. HAVING
WATCHED THE FLOOD PROGRAM WHICH
HAS YOU KNOW YOU CAN ONLY THE
MAX YOU GET IS 250,000, HAVING
WATCHED THE C E A. YOU KNOW,
THEY JUST HAD TO REDUCE SOME OF
THEIR LIMITS. PEOPLE. I DON'T
WANT CONSUMERS TO GET LOWERED
EXPECTATIONS OF WHAT THEY'RE
GOING TO GET, BUT I THINK A LOT
OF PEOPLE WOULD RATHER GET
SOMETHING THAN NOTHING. SO MAYBE
A LITTLE BIT OF DEVELOPING A
MODEL BASIC POLICY WHICH WERE
SUPPOSED TO HAVE. I MEAN, THAT'S
WHAT THE FIRE POLICY IS. IT'S
JUST THAT THIS WILDFIRE NET IS
THROWING THINGS OUT OF OUT OF
WHACK. AND THE LAST THING I'D
SAY IS, YOU KNOW WE DO WANT TO
NOT PIT DIFFERENT PARTS OF THE
STATE AGAINST EACH OTHER.
THERE'S BEEN A LOT OF FIGHTING
IN THE COASTAL GULF COAST STATES
BETWEEN INLAND AND COAST AND
WE'RE WE ALL ARE IN THIS. LISTEN
PEOPLE WHO LIVE IN THE CITY LIKE
TO GO TO TAHOE. OKAY, SO IT'S
REALLY, UM, INSURANCE WORKS BEST
WHEN IT'S SPREAD AND YOU SEE
WHAT HAPPENS. WE CUT OUT
EARTHQUAKE AND THEN NO ONE BUYS
IT BECAUSE IT'S TOO EXPENSIVE,
SO WE DON'T WANT TO CUT OUT
WILDFIRE. UM UNLESS WE HAVE, YOU
KNOW SOME SOME BETTER IDEA.
THERE'S SOME AGENTS THAT ARE
PROPOSING THIS IDEA THAT THE
FAIR PLAN THE ONLY WILDFIRE THAT
WE TAKE WILDFIRE OUT OF THE
BASIC POLICY AND AGAIN. I THINK
ANYTIME YOU SEGMENT IT MAKES
INSURANCE WORK LESS WELL AND
BECOME MORE EXPENSIVE. YEAH.
THANK YOU. UM SO IF I MIGHT, I
MEAN, I GUESS I'M STRUGGLING A
LITTLE BIT WITH SOME OF THE
COMMENTS THIS IDEA THAT WELL,
$1000 WHEN I USED TO PAY, AND
NOW 10,000 DOESN'T SEEM FAIR.
BECAUSE AT THE END OF THE DAY
ACTUARIAL SCIENCE IS A SCIENCE
INSURANCES ABOUT PRICING RISK.
IT'S NOT A WHAT FEELS RIGHT TO
ME AS A FAIR PRICE BASED ON WHAT
I HAD PAID FIVE YEARS AGO. I
MEAN, PRIOR TO 2017 WILDFIRE
WASN'T EVEN A THING FOR
INSURANCE. IT WAS A PRACTICALLY
A GIVEAWAY IN YOUR INSURANCE
POLICY. NO ONE EVER IMAGINED OF
$15 BILLION LOSS IN CALIFORNIA
NEVER HAPPENED IN HISTORY. AND
THEN TO HAVE IT BACK TO BACK WAS
UNTHINKABLE. SO YOU KNOW,
THERE'S A LOT OF CATCHING UP
THAT IS GOING ON RIGHT NOW. IN A
MARKET THAT WAS REALLY WILDLY IN
HINDSIGHT, UNDERPRICED. AND
CONSUMERS ARE GETTING THIS RATE
SHOCK AND NO ONE LIKES IT. UM
INSURERS DON'T LIKE IT. THIS IS
NOT A HAPPY TIME FOR INSURANCE.
I ASSURE YOU THAT IF WE COULD GO
BACK TO 2016 AND NOT BE TALKING
ABOUT CAT MODELS AND NOT BE
TALKING ABOUT REINSURANCE AND
NOT BE HAVING THESE HEARINGS AND
NOT HAVE YOU HEAR FROM YOUR
CONSTITUENTS WE WOULD BE QUITE
HAPPY TO GO BACK TO THAT AS
WELL. AND IT'S JUST UNFORTUNATE
THAT THAT'S NOT WHERE WE ARE.
AND WE HAVE TO COME UP TO THIS
NEW REALITY. THIS NEW CLIMATE
CHANGE. I MEAN, YOU KNOW, WE
TALKED ABOUT THESE CAT MODELS AS
IF THEY'RE MYSTERIOUS THINGS.
THE CALIFORNIA EARTHQUAKE
AUTHORITY. WITH HIM. IT'S MISS
BOK REFERRED TO THE GOVERNOR.
THE INSURANCE COMMISSIONER IN
THE STATE TREASURER ARE THE
BOARD OF THE CALIFORNIA
EARTHQUAKE AUTHORITY. THEY'RE
HAVING THE EXACT SAME PRESIDENT
SOME FOR PROFIT ENTITY. THEY'RE
HAVING THE EXACT SAME PROBLEMS
THAT THE ADMITTED MARKET IS
HAVING HARD REINSURANCE COST.
THEIR EXPOSURE GROWTH IS THROUGH
THE ROOF. THEY'RE HAVING A LOOK
AT DOUBLE DIGIT RATE INCREASES.
THIS YOU KNOW, IT'S NOT LIKE
THIS IS A MADE UP THING. UM UH,
THIS MIGHT NOT BE COLD COMFORT,
BUT AT LEAST I'LL SAY RELATIVE
TO FLORIDA. YOU KNOW YOUR
CONCERN THERE. UM HURRICANE
LOSSES. UM DWARF WILDFIRE LOSSES
IN CALIFORNIA. YOU KNOW, IT
DOESN'T MAKE WILDFIRE LOSSES ANY
BETTER. BUT I MEAN, WHEN THEY'RE
LOOKING AT, YOU KNOW WE'RE
LOOKING AT, YOU KNOW, SINCE 2020
20 TO $50 BILLION IN LOSSES AND
WILDFIRE, THEY'RE LOOKING AT 100
TO 200 BILLION OF LOSSES.
HURRICANE AND THEN, OF COURSE,
MISS COLLINS POINT ABOUT. THEY
HAVE AN ENTIRELY DIFFERENT ISSUE
GOING ON WITH LEGAL SYSTEM ABUSE
8% OF ALL THE HOMEOWNERS CLAIMS
AND THE NATION AND THEY HAVE 80%
OF THE LITIGATION. BUT, UM, YOU
KNOW, I AND I KNOW IT'S
DIFFICULT, BUT AS I'VE BEEN
THINKING ABOUT THIS UM I THINK
WHAT WE NEED TO START THINKING
ABOUT IS FIRST YOU HAVE TO THINK
ABOUT INSURANCE, ACTUALLY,
SCIENCE. IT'S A IT'S A MARKET
SIGNAL ABOUT RISK. IT'S HOW DO
YOU CONNECT RATES TO THE ACTUAL
RISK? STEP ONE. THEN YOU HAVE A
MARKET. HOW YOU THEN GET AT THIS
AFFORDABILITY ISSUE, I THINK IS
CRITICALLY IMPORTANT QUESTION
FOR EVERYONE RIGHT? BECAUSE YOU
CAN'T HAVE PRODUCT THAT NO ONE
CAN AFFORD. BUT AT THE SAME TIME
YOU KNOW YOU CALIFORNIA WE HAD
TO. WE MANAGE THIS IF THE RISK
BECOMES SO UNAFFORDABLE. WHAT
DOES THAT MEAN? IN CALIFORNIA.
YOU KNOW ONE THING IT DOES. YOU
KNOW, MAYBE BETTER THAN ANY
OTHER STATE IS YOU HAVE AN
INCREDIBLE SAFETY NET. YOU KNOW,
THERE'S WAYS TO THINK ABOUT, YOU
KNOW, OBVIOUSLY, IN THE IN
COVERED CALIFORNIA, THERE'S
PREMIUM SUBSIDY PROGRAMS.
THERE'S OTHER WAYS FOR THE
LEGISLATURE TO THINK ABOUT. THE
AFFORDABILITY ISSUE. AND LET THE
INSURANCE BE ABOUT THE ACTUAL
SCIENCE AND THE PRICING THE RISK
AND THEN SO I THINK, MR CHARLES
POINT AND EVERYONE'S POINT HERE.
THE MEDIUM TO LONGER TERM THING
IS WE ALL AGREE WE HAVE TO BEND
THE CURVE AND RISK AND LOSS.
THAT'S THE ONLY THING THAT'S
GOING TO BRING PRICES DOWN. ALL
THESE TOOLS TO PRICE RISK ARE
GREAT. AND THEN YOU CAN HAVE A
MARKET AND YOU MAY NOT BE, YOU
KNOW, RESPECTFULLY SATISFYING TO
HAVE AN INSURANCE MARKET, BUT
IT'S BETTER THAN NOT HAVING AN
INSURANCE MARKET. UM, BUT TO
REALLY GET AT THE MEDIUM AND
LONGER TERM AFFORDABILITY. IT'S
ALL ABOUT BRINGING DOWN THAT
RISK AND LOSS CURVE. AND I THINK
YOU KNOW, WE TALKED ABOUT MR
WHITAKER TALKED ABOUT, YOU KNOW,
YOU NEED TO HAVE 30% MINIMUM
HERD IMMUNITY TO HAVE THAT BEING
MEANINGFUL. YOU HAVE TO HAVE
THIS ONGOING COMMITMENT. UM IT
WASN'T THAT LONG AGO, THERE WAS
VIRTUALLY NO STATE MONEY FOR
MITIGATION. THAT BECAME PART OF
THE CAP AND TRADE PROGRAM ONLY
BACK IN 2017. AND THEN I KNOW A
FACT. ASSEMBLYMEMBER'S WOOD WAS
VERY IMPORTANT AS PART OF THE
UTILITIES. WILDFIRE FUND.
DRIVING THE GROUND
ADMINISTRATION TO MAKE A LARGER
COMMITMENT TO WILDFIRE
RESILIENCY WITH CAP AND TRADE
FUNDS, AND IT'S JUST RECENTLY
NOW THAT THE BUDGETS EVEN
LOOKING AT THAT, BUT NOW BUDGETS
TIGHTENING UP ONE OF THE FIRST
THINGS TO GO IN THE BUDGET THIS
YEAR WAS MONEY FOR CAL FIRE
INSPECTIONS, ALL RIGHT, AND THEY
WERE ONLY DOING ONE THIRD OF THE
RUI EVERY THREE YEARS, AND THEY
WEREN'T EVEN THAT WAS THERE.
WHAT THEY WERE SUPPOSED TO DO,
AND THEY WERE BARELY HITTING 15
OR 20% OF THAT. SO THIS ONGOING
COMMITMENT BECAUSE YOU HAVE TO
HAVE THE MAINTENANCE. IT'S NOT A
ONE AND DONE WHEN YOU DO YOUR
DEFENSIBLE SPACE. I THINK
THERE'S 0 5 FT ZONE IS
INCREDIBLY IMPORTANT TO SCIENCE
THAT WE SEE THAT'S ONE OF THE
MOST MEANINGFUL THINGS YOU CAN
DO. BUT THIS IS ALL ONGOING.
IT'S LIKE ONCE YOU GET IT CLEAR
YOU HAVE TO STAY ON TOP OF IT.
AND UNFORTUNATELY, I THINK THOSE
ARE A LOT OF THINGS THAT GO IN
THE BUDGET TIMES GET TOUGH. AND
THEN WHERE DOES THE MONEY COME
FROM? AND, FRANKLY, A LOT OF
COMMUNITIES. YOUR DISTRICT WAS
ACTUALLY VERY GOOD ABOUT
APPROVING, YOU KNOW, TAXING
THEMSELVES TO PAY FOR MITIGATION
. THAT'S NOT THE CASE IN A LOT
OF COMMUNITIES, EVEN HIGH FIRED
COMMUNITIES UP IN THE NORTH
STATE. WHO SAID, NO, WE DON'T
WANT TO PAY. FOR MANY. YOU DON'T
ATTACKS OURSELVES FROM
MITIGATION, BUT WE DON'T WANT
INSURANCE TO GO UP EITHER. SO
NOW WHAT HAPPENS? RIGHT, SO I
WOULD SAY THE ONE THING THAT I
WOULD ADD TO THAT IS THAT WHAT
WITH CATASTROPHE MODELS, IT
DOESN'T SUDDENLY INVENT NEW
RISK. THE RISK IS ON THE GROUND
. IT'S A QUESTION OF ARE WE
ALREADY ABLE TO PRICE FOR THAT?
AND WITH THE HISTORIC LOOK BACK
PERIOD AS AN EXAMPLE, THERE WAS
INSURANCE COMPANIES THAT HAD
FILINGS I BELIEVE BACK IN LIKE
2015, OR 16 THAT SAW THIS
GROWING RISK. COULDN'T GET A
RATE OF PROOF FOR THAT. THEN THE
17 18 WILDFIRES OCCURRED AND
THEN YOU SEE THIS INCREASE IN
THE NEED FOR RATES TO BE
INCREASED, BECAUSE NOW THEY CAN
INCLUDE IT IN THEIR LOSS
EXPERIENCE. THEY KNEW IT WAS
ALWAYS THERE, BUT THEY COULDN'T
PRICE FOR UNTIL IT HAPPENED AND
WHAT YOU SEE AS A RESULT FOR
CONSUMERS. NOW YOU HAVE THIS
KNEE JERK REACTION. WE'RE NOW
GONNA SPIKE PRICES MUCH HIGHER,
MUCH MORE QUICKLY, AND I THINK
THAT'S THE WORST FRENCH FOR ANY
KIND OF CONSUMER, BECAUSE AS
YOU'RE TRYING TO MANAGE YOUR
BUDGET IT'S A GRADUAL INCREASE
IS EASIER TO ABSORB AND PLAN FOR
IF YOU'RE BUYING A NEW HOME AND
WITH YOUR BUDGET IS GOING TO BE
MONTHLY COSTS WHEN YOU GET LIKE
A BALLOON PAYMENT, LIKE ON A
MORTGAGE AND SUDDENLY HAVE TO
COME UP WITH ALL OF THAT, AND
THAT'S NOT ON YOUR RADAR. THAT'S
MORE DIFFICULT AND MORE OF A
FINANCIAL DESTABILIZE ER, WHERE
IT'S SUDDENLY BECOMES. ON ON
AFFORDABLE FOR YOU. SO THERE IS
GOING TO BE GROWING COSTS. WE
ARE GOING TO SIT HERE AND TELL
YOU THAT THAT'S NOT GOING TO BE
THE CASE. EVERY STATE THAT I AM
WORKING WITH IS HAVING THE SAME
CONVERSATIONS. UNFORTUNATELY.
BUT WE CAN CREATE MORE STABILITY
AND HOW WE GRADUALLY ADJUST TO
RISK AS A LONG TERM. THIS ISN'T
JUST IN THE NEXT COUPLE OF
YEARS. THIS IS GOING FORWARD
WITH KNOWING OUR RISK IS GOING
TO CONTINUE TO AMPLIFY AS MORE
OF THESE CLIMATE CONDITIONS AND
MORE OF THESE EXPOSURES OF NEW
COMMUNITIES IN THESE AREAS
CONTINUE TO POSE A THREAT WHERE
WE HAVE TO CONTINUE TO
RECONSTRUCTION. AS THESE EVENTS
DO OCCUR, SO IT'S CREATING
GREATER STABILITY NOT JUST FOR
INSURANCE COMPANIES AND HOW THEY
MANAGE IT, BUT ALSO FOR
CONSUMERS ON WHAT THEY SHOULD BE
ANTICIPATING FROM A COSTUME
BUDGET PERSPECTIVE. FOR THANK
YOU. THIS IS THIS HAS BEEN A
VERY INTERESTING DISCUSSION AND
APPRECIATE APPRECIATE IT VERY
MUCH. UM I KIND OF WANT TO BRING
IT BACK TO KIND OF THE BIGGER
PICTURE FROM THE FROM WHAT WE'RE
SEEING IN OUR WORLD. I'LL GIVE
YOU AN EXAMPLE, UM, STAFF MEMBER
. I HOPE I HAVE THE NUMBERS
RIGHT? BUT BUT YOU'LL GET YOU'LL
GET THE GENERAL GIST OF IT. I
THINK THE INSURANCE PREMIUMS TO
COVER THEIR HOUSE AND SUBURBAN
PART OF OR ACTUALLY RURAL, MORE
RURAL PART OF CALIFORNIA. WAS
$2200. THAT. POLICY WAS CANCELED
. THEY WENT TO A FAIR PLAN WHICH
END UP BEING $4800. FOR LESS
COVERAGE. NOT ROPE, NOT COMPLETE
COVERAGE. AND SO. FOR THEM FOR
THAT, FOR THAT PERSON, THE IDEA
THAT PLAN WENT UP 30 OR 40.
LOOKS REALLY APPEALING. 607 $100
MORE LESS THAN 3000 VERSUS 48,
BUT I'VE GOT COMPREHENSIVE
COVERAGE HERE. AND SO THE IDEA
THAT THAT EVERYTHING SHOULD BE
ALL FOCUSED ON YOU KNOW THE
RATES AND THAT THAT DOESN'T
BELIE THE REALITY OF THE MARKET
AND WHAT'S HAPPENING IN OUT
THERE, AND I APPRECIATE CONSUMER
GROUPS. I UNDERSTAND WHERE
YOU'RE COMING FROM. BUT THAT'S
THE REALITY OF WHAT A LOT OF
PEOPLE IN IN MY DISTRICT ARE
FACING THIS AREA ARE FACING NO
COVERAGE GOING TO OR GOING TO
THE FAIR, GO TO THE FAIR PLAN,
PAY HUGE AMOUNTS OF MONEY FOR
LESS COVERAGE, AND THAT IS THE
REALITY. SO I'M APPRECIATIVE
THAT THE. INSURANCE COMMISSIONER
NOW HAS THROUGH EXECUTIVE ORDER
THE ABILITY TO MOVE FORWARD, BUT
THAT DOESN'T NECESSARILY MEAN
IT'S GOING TO HAPPEN IN A TIMELY
MANNER. HE HAS UNTIL THE END OF
DECEMBER. 31ST OF 2024 SO I
THINK PART OF US IS TO KEEP THE
FEET TO THE FIRE TO ACTUALLY
MOVE THINGS MORE QUICKLY.
BECAUSE EVEN WITH THOSE IN
PLACE, WHEN DO YOU SEE AS THE
MARKET WHEN DO CONSUMERS SEE THE
RELIEF POTENTIAL? OF A STABLE
MARKET BECAUSE WE NEED
COMPETITION. WE NEED AS MANY
PLANS IN THE MIX AS POSSIBLE.
LESS COMPETITION, HIGHER PRICES.
WE SEE THAT EVERYTHING THE MORE
COMPETITION THERE IS THE MORE
CHANCE WE HAVE TO GET A RATE
THAT THAT ACTUALLY WORKS SO
REALISTICALLY TOUGH QUESTION FOR
THE INSURANCE COMPANY
REPRESENTATIVES HERE AND WON'T
HOLD YOU TO IT. BALLPARK. UM,
SORT OF IDEA. BUT THE AS THESE
TOOLS BECOME AVAILABLE, UM. DO
YOU THINK NUMBER ONE THAT
CREATES THE STABILITY YOU'RE
LOOKING FOR. NUMBER TWO NGUYEN.
HOW LONG AFTER REGULATIONS ARE
OUT THERE. DO YOU THINK THAT
THAT STABILITY WILL TRANSLATE TO
YOU KNOW, AVAILABILITY FOR
CONSUMERS, SO THEY'RE NOT FORCED
INTO THE FAIR PLAN. I THINK WHAT
YOU'VE JUST DESCRIBED IS THAT
COMPETITION IS YOUR BEST
SOLUTION. WHEN YOU PUT ALL OF
THESE HIGH RISK PROPERTIES INTO
A FAIR PLAN, IT'S NATURALLY
GOING TO BE MUCH HIGHER AND SO
FOR THOSE RESIDENTS IN THOSE
HIGH RISK AREAS I LIVE IN EL
DORADO COUNTY, SO I'M JUST IN
THAT SAME REGION AS WELL. YOU
WANT THE PRIVATE MARKET ACCESS
AND TO GET THE PRIVATE MARKET
ACCESS IN THESE REGIONS IS WHERE
COMPANIES ARE SAYING WE NEED
THAT REGULATORY FLEXIBILITY AND
ABILITY TO REFLECT THE COST OF
CLAIMS THE FIRST AND FOREMOST
OPTION THAT OUR MEMBERS EXPRESS
IS THE TIMELY APPROVAL OF RATE
CHANGES. SO WE'VE HAD THIS
INFLUX OF INFLATION AFTER
THEY'VE TRIED TO RECOVER FROM
THESE CATASTROPHIC LOSSES OF 17
18 AND OTHER RECENT YEARS, SO
TRYING TO JUST GET CLOSE TO
WRITE ADEQUATE. IT MAY NOT BE
THE EXTENT OF WHAT YOU SEE IN
THE FAIR PLAN FOR A PRIVATE,
PROBABLY, LIKE JUST GETTING
THOSE CLOSER TO WHAT THEY'RE
INDICATED. NEED IS THE
REINSURANCE IN THE CATASTROPHE
MODELS ARE ANOTHER TOOL TO HELP
YOU GET THERE, AND SO THEY'RE
KIND OF LIKE A SECOND LAYER THAT
WORKS TOGETHER WITH THAT, AND SO
THE CATASTROPHE MODELS HELP
INFORM WITH THAT RISK IS GOING
TO BE HOW TO DO IT OVER TIME.
WHAT YOUR OVERALL CONCENTRATION
IS GOING TO BE, AND THEN THE
REINSURANCE CAN HELP PROVIDE THE
ADDITIONAL CAPACITY TO WRITE IN
THOSE HIGH RISK AREAS. IF YOU
DON'T HAVE THAT MARKET CAPACITY
THROUGH OTHER FINANCIAL
MECHANISMS, WHETHER IT'S
CATASTROPHE, BONDS OR
REINSURANCE. THAT'S WHERE THAT
RATE INCREASED BY THE PRIMARY
COMPANY HAS TO KEEP PACE WITH
THAT. SO JUST THE RATE APPROVALS
WHICH ARE WHAT WE ARE WORKING
CLOSELY WITH COMMISSIONER LARA
ON IS THE VERY FIRST LIVE
OFFENSE THAT WILL GET THERE
QUICKER THAT THE REGULATIONS
WHICH ALLOW THE USE OF THE RE
ENTRANCE AND THE CAT MODELS. DO
NEED TO GO THROUGH THE
REGULATORY PROCESS, AND THOSE
WOULD TAKE A LITTLE BIT LONGER.
BUT THOSE ARE KIND OF LIKE THE
TOP THREE. ESSENTIALLY IF YOU
WERE TO TRY TO PRIORITIZE WHAT
THOSE WOULD BE, AT LEAST FROM
OUR PERSPECTIVE. SARAH NOT
APPEAR OTHER SAD. I WAS JUST
GOING TO ADD. YEAH. LET ME DO MY
KARNAK THIS DATE. GIVE YOU A
DATE. AND THEN, UM, GETTING A
LOT OF TROUBLE LATER. UM I DO ON
THAT. ON THAT POINT. I THINK
THERE IS A PIECE THAT THAT'S
HAPPENED. THAT'S REALLY
IMPORTANT. I MEAN, OBVIOUSLY
IT'S HARD TO KNOW AND I DON'T
KNOW THE EXTENT THE EXTENT TO
WHICH THE DEPARTMENT HAS BEEN
IMPACTED BY. YOU KNOW THEY WERE
COVID RETIREMENTS, THE SKILL SET
OF HAVING ACTUARIES AND PEOPLE
WHO KNOW HOW TO DO RATE FILINGS.
IT'S NOT A LOT OF PEOPLE, YOU
KNOW, COMING OUT OF COLLEGE
GOING. I CAN'T WAIT TO WORK AT
THE DEPARTMENT OF INSURANCE. DID
YOU RATE FILINGS? UM SO THEY
HAVE TO STAFF UP FOR THAT, YOU
KNOW, MISS BOXER GLUED TO ENSURE
FOOT DRAGGING. I DON'T I DON'T
THINK THAT'S THE CASE. THERE'S
HUNDREDS OF FILING SITTING THERE
FOR DISCOUNTS, BUT I THINK THE
DEPARTMENT NEEDS THAT HELP. NOW
WHAT A LOT OF PEOPLE IN THE
PROCESS AND TALKING ABOUT A LOT,
BUT THAT'S REALLY IMPORTANT. UM,
IN ONE OF THE WHAT THE LAST
BUDGET BILLS THAT THE
LEGISLATURE PASSED. WAS LANGUAGE
AND AUTHORITY. FOR THE
DEPARTMENT OF FINANCE TO WORK
WITH THE DEPARTMENT OF INSURANCE
TO BRING IN CONTRACT STAFF TO
ADD BODIES. INSURANCE PAID WE
AND WE TOLD THEM SAID, AND
DEPARTMENT INSURANCE IS ALL
FUNDED BY FEES ON INSURERS
HUNDREDS OF MILLIONS OF DOLLARS
EVERY YEAR AND WE SAID, WHAT DO
YOU NEED? HOW MUCH WILL PAY FOR
IT? GO GET ALL THE STAFF. YOU
NEED TO MOVE THIS STUFF ALONG.
AND SO, UM I THINK THAT IS THE
KEY. IT'S GETTING THEM THE
RESOURCES BECAUSE I BELIEVE THE
COMMISSIONER AND THE SENIOR
LEADERSHIP THERE IS DEDICATED TO
ADDRESSING THIS PROBLEM.
OBVIOUSLY HE'S MADE SOME VERY
PUBLIC COMMITMENTS ABOUT GETTING
AT THAT. UM, AND SO THEY NEED TO
HAVE THOSE RESOURCES AND AS MUCH
AS WE'RE ALL FOCUSED ON THE CAT
MODELS, UH, AND REINSURANCE
ISSUES AS AS COLLINS WAS TALKING
ABOUT JUST THAT SIMPLE DAY TODAY
, GETTING THOSE THINGS MOVING
COULD BE REALLY MEANINGFUL. I
WISH I DON'T I DON'T HAVE A
SENSE OF WHAT THE POOL OF PEOPLE
OR THE ABILITY TO CONTRACT FOR
THAT IS OR EXACTLY WHAT THE
WORKLOAD IS. AND AGAIN. I DON'T
SPEAK FOR THE DEPARTMENT. I KNOW
THEY RECENTLY ACTUALLY ALREADY
PUT OUT A AND R FO WHETHER
REQUESTING FOR AN ANALYSIS OF
YOU KNOW WHAT'S OUR WORKLOAD
NEED? AND HOW ARE WE GOING TO
GET THERE? HOW ARE WE GOING TO
START HITTING IMPROPER 103 TALKS
ABOUT ACTUALLY 60 DAY APPROVALS?
UM AND THEN AND THEN IF YOU GO
TO ADMINISTRATIVE HEARING 180
DAYS, RIGHT, WE'VE NEVER EVEN
COME CLOSE TO IT. ANYTHING LIKE
THAT. SO THOSE ARE THE NEW
TARGETS AND THEY START STAFFING
UP TO THAT WE COULD SEE
MEANINGFUL MOVEMENT HAPPENING
QUICKLY, BUT BUT THE TRUTH IS,
IT'S TAKEN US. MANY YEARS TO GET
INTO THIS PROBLEM. AND AS
TYPICAL WITH COMPLEX PROBLEMS,
UM, IS PROBABLY NOT SOMETHING
THAT TURNS AROUND. IN A WEEK OR
A MONTH. UH, BUT CERTAINLY. WE
WOULD HOPE WE'RE GOING TO SEE
MEANINGFUL PROGRESS WELL BEFORE
DECEMBER OF 2024. JUST A QUICK
NOTE OF MAYBE POSITIVITY. UM UH
, I DON'T I DON'T THINK WE WANT
TO SCAPEGOAT. THE PRIOR APPROVAL
PROCESS OR THE INTERVENER
PROCESS. THOSE ARE I DON'T THINK
THOSE ARE THE CAUSES. I THINK
THOSE ARE SOMETHING THAT THE
INSURERS HAVE BEEN COMPLAINING
ABOUT. FROM DAY ONE. I HAVE
HEARD THIS WEEK TOO. TWO GOOD
RUMORS THAT WE LIKE. ONE IS THAT
THE REINSURANCE MARKET IS
PREDICTED TO SOFTEN IN THE
SPRING. SO THAT IS GOOD. I HAVE
ALSO HEARD THAT A MAJOR INSURER
HAS JUST SAID IT AT AN AGENT
BRIEFING LAST WEEK SAID THAT
THEY ARE GOING TO OPEN UP SOME
ZIP CODES. SO I MEAN, I THINK A
LOT OF US WHEN WE SAW THIS
MEMORIAL DAY ANNOUNCEMENT. WE'RE
LIKE, OKAY, THIS IS POLITICAL. I
LIKE YOU'RE GOING TO MAKE THIS
ANNOUNCEMENT ON THE THREE, YOU
KNOW, THREE DAY WEEKEND. AND
THERE WERE THERE WERE A LOT OF
INSURERS THAT HAVE BEEN QUIETLY
QUITTING THE MARKET. YOU
PROBABLY KNOW THAT AND SO WE
JUST HEARD A FEW HIGH PROFILE.
WE DO HAVE A REALLY PRESSING
SITUATION. IF YOU LOOK AT HOW
MANY APPLICATIONS THAT THEIR
PLAN IS GETTING EVERY DAY, IT'S
SCARY AND I KNOW YOU KNOW THAT
THAT'S WHY WE'RE HERE. SO UM, I
JUST REALLY APPRECIATE YOUR
TIME. I DO THINK THAT INSURERS
WILL GET THIRSTY AGAIN FOR THE
PREMIUM DOLLARS. UM FOR SURE,
BUT I STILL THINK WE HAVE TO BE
WORKING ON A PLAN B SO WE DON'T
FIND OURSELVES IN THE SITUATION.
LONG TERM. AS A MEMBER WOULD AND
OTHERS. IF I MIGHT JUST VERY
BRIEFLY. I KNOW IT'S GONE LONG,
ALTHOUGH I FEEL LIKE IT'S BEEN A
HOPEFUL, PRODUCTIVE CONVERSATION
AND INTERESTING ONE. LET ME
BEGIN ON A POSITIVE DOUBT. UM I
THINK WE ALL AGREE ON RESOURCES
FOR THE FOR THE DEPARTMENT. LOOK
I WAS THERE FOR ALMOST SIX
YEARS. THOSE ARE GOOD PEOPLE.
THEY WORK HARD. UH, IT'S UM YOU
KNOW, IT DOESN'T HAVE THE
ALLURE. AS AS MR TAYLOR JUST
KIND OF ALLUDED TO THAT. THAT'S
SOME OTHER PLACES DO, BUT THEY
DO GOOD WORK, AND THEY REALLY DO
WORK HARD FOR THE PEOPLE OF THE
STATE. UM SO I DON'T THINK
ANYONE DISAGREES WITH WITH MORE
RESOURCES THERE. IT'S A QUESTION
OF KIND OF MAKING THAT HAPPEN.
UH, IN A IN A THOUGHTFUL WAY,
OKAY? UM ON MISS BOX REINSURANCE
RUMOR. UM IF I HAD A NICKEL FOR
EVERY TIME AN UNREGULATED
INDUSTRY I STARTED TO HEAR
RUMORS ABOUT THE POTENTIAL FOR
REGULATION OR PEOPLE LOOKING AT
IT AND THEN MADE AN ANNOUNCEMENT
THAT MAYBE THE MARKET MIGHT
TOUGHEN UP. I'D BE A RICH MAN. I
WOULDN'T HAVE TO WORK FOR THE
CONSUMER FEDERAL THOUGH I
PROBABLY WOULD HELP HIM OUT
ANYWAY. SO I TAKE ALL THAT WITH
A GRAIN OF SALT. I HOPE SHE'S
RIGHT. UM I CAN TELL YOU
ASSEMBLYMEMBER'S RODRIGUEZ. YOU
KNOW THIS BETTER THAN ALMOST
ANYONE IN THIS ROOM? C E, A AND
SARAH MENTIONED IT. C E A IS
JUST AT THE MERCY. OF THE
REINSURANCE INDUSTRY, AND
THERE'S A WHOLE ANOTHER
CONVERSATION. OBVIOUSLY ABOUT
EARTHQUAKE AND THE NUMBER ONE
THING THAT INCREASES TAKE UP
RATE OF EARTHQUAKE INSURANCE IS
GUESS WHAT A BIG QUAKE AND OF
COURSE IT'S TOO LATE FOR ANYBODY
WHO WAS DAMAGED IN THE BIG
QUAKE, BUT, UM THAT IS, IT'S A
CHALLENGE. IT'S A REAL CHALLENGE
, AND BY THE WAY WE APPRECIATE
GOING BACK YEARS AND I WAS STILL
AT THE DEPARTMENT WHEN THIS
STARTED ALL THE WORK THAT YOU'VE
DONE ON BRACE AND BOLT AND BOLT
IS THE MITIGATION VERSION IN
EARTHQUAKE VARIATION OF THE
CONVERSATION THAT WE JUST HAD
FOR THE BETTER PART OF THE PAST
THREE HOURS HERE. UM RATE
FILINGS. I WOULD NOT BE DOING MY
JOB IF I DIDN'T MENTION THAT
WHILE I DID NOT PERSONALLY WORK
ON RAY FALLON'S WHEN I WAS AT
THE DEPARTMENT, I WASN'T
PERSONALLY LOOKING AT THEM OR
REVIEWING THEM. I OBVIOUSLY WAS
TALKING TO THE PEOPLE WHO WERE
UM WELL, I DON'T WANT TO PAY
WITH TWO BROTHERS BROADER BRUSH
WHAT WAS NOT UNCOMMON AT ALL.
WHAT WAS QUITE COMMON WAS A RATE
FILING WOULD COME IN FROM AN
INSURER. AND IT WOULD ASK MORE
QUESTIONS WITH THE
INCOMPLETENESS OF THE FILING.
THEN IT WOULD ANSWER IN THE
FILING THE DEPARTMENT DOING
YEOMAN'S WORK WOULD THEN WORK
VERY HARD TO TRY TO WORK THROUGH
THAT AND ASK THOSE QUESTIONS.
THOSE QUESTIONS WOULD THEN BE
SUBMITTED BACK TO THE INSURER.
CRICKETS. AND THEN THE INSURANCE
INDUSTRY TENDS TO NOT ALWAYS IN
FAIRNESS TENDS TO SAY, LOOK AT
THE DELAYS OF THE DEPARTMENT.
MANY OF THOSE PROBLEMS COULD
HAVE BEEN AVOIDED WITH A MORE
THOROUGH, MORE COMPREHENSIVELY
WRITTEN, BETTER QUALITY RATE
FILING TO BEGIN WITH. THAT'S
WHAT I SAW. NOW THINGS MAYBE ARE
A LITTLE DIFFERENT NOW. I DON'T
KNOW THE OTHER THING THAT I KNOW
IS THAT FOR THE PAST FEW YEARS
THERE HAS BEEN KIND OF A GREEN
LIGHT. ON RATE FILINGS. UM, THEY
ARE GETTING MOVED THROUGH PRETTY
QUICKLY. THEY'RE GETTING
APPROVED. THE DATA IS
OVERWHELMING. INSURERS ARE
GETTING I BELIEVE IN. IT'S ABOUT
95% GIVE OR TAKE OF WHAT THEY'RE
ASKING FOR. AND SO THIS
DEMONIZATION OF, YOU KNOW KIND
OF PEOPLE WHO ARE JUST DOING THE
BEST THEY CAN WITH LIMITED
RESOURCES AND THE INTERVENER
PROCESS, I THINK IS UNFAIR.
THAT'S A THAT'S A DEBATE THAT'S
BEEN GOING ON FOR 35 YEARS SINCE
PROP ONE OR THREE FIRST PASSED
IN 88. BUT I DO THINK THAT, UM,
THERE ARE A NUMBER OF TAKEAWAYS
FOR ALL OF YOU WHERE THERE ARE
OPPORTUNITIES TO MOVE FORWARD TO
HELP CONSUMERS THAT PAIN IN
THOSE COMMUNITIES. SOMEONE
MEMBER WOULD THAT'S REAL AND WE
UNDERSTAND THAT AND FEEL THAT
TOO. WE JUST WANT TO MAKE SURE
THAT THERE ISN'T SUCH A WAVING
OF TRANSPARENCY AND FAIRNESS AND
WE HAVE YOU KNOW RULES AND PRIOR
APPROVAL THAT HAVE HISTORICALLY
AND THERE'S MANY REPORTS ON
THIS. SAVE CONSUMERS BILLIONS
AND BILLIONS OF DOLLARS AND
REALLY HELPED THEM. AND THEN
THAT'S NOT IMPORTANT THAT WE
KIND OF THROW THAT OUT. BUT THAT
DOESN'T MEAN THAT ANYTHING. NO
SYSTEM IS PERFECT, AND WE'LL BE
THE LAST PEOPLE TO SAY THAT. SO
THANK YOU VERY MUCH FOR THE TIME
AND THE QUESTION BUT NOT THAT
IT'S NOT PERFECT. WELL THIS HAS
BEEN INCREDIBLY HELPFUL. GREAT
DISCUSSIONS AND GREAT QUESTION.
SO I'D LIKE TO THANK MY
COLLEAGUES AND ESPECIALLY AS
SOME OF THEM WOULD FOR OFFERING
TO HOST HERE IN HIS DISTRICT. I
THINK THIS HAS BEEN ONE OF THE
MOST SUCCESSFUL HEARINGS WE'VE
HAD THIS YEAR, ACTUALLY. UM
SOMEONE TO TURN IT OVER TO
DAMON. THANK YOU ALL SO MUCH.
YEAH, I WANNA ACTOR THAT IS SO
MANY REPRESENTS A DISTRICT LIKE
A HALF MILE AWAY. SO MUCH
APPRECIATE IT. AND THANKS TO THE
CHAIR AND ASSEMBLYMEMBER'S WOOD
AND OUR OTHER COLLEAGUES, SO
WE'RE GOING TO OPEN IT UP TO
PUBLIC COMMENT NOW, IF FOLKS WHO
WOULD LIKE TO SPEAK ON THESE
ISSUES. PLEASE COME FORWARD, AND
WE WOULD ASK, UM WHAT DO WE HAVE
THE MIC. THERE IT IS, IF YOU
COULD START LINING UP IN FRONT
OF THE MICROPHONE. AND MAYBE TRY
TO KEEP YOUR COMMENTS TO A
COUPLE OF MINUTES. IF YOU CAN.
WELCOME. HELLO. MY NAME IS JAMES
ELY. I'M AN ACTUARY. 40 YEARS OF
EXPERIENCE. SOMEWHAT. SEMI
RETIRED, MOSTLY RETIRED.
UNDERUTILIZED MIGHT BE
INTERESTED IN SOME OF THAT WORK.
BUT, UM I WANTED TO COMMENT ON,
UM ON TWO THINGS. FIRST OF
WHICH, UM. IS THE CATASTROPHIC
MODELING CAT MODELING. IT'S WELL
PROVEN IN. AND VERY SUCCESSFUL
IN HURRICANE MODELING AND ALSO
EARTHQUAKE, BUT BOTH CAN BE
MODELED ESSENTIALLY AS EVENTS AS
CIRCLES. AND THEY. HIT ON
COASTLINES OR FAULT LINES AND
THE MODELING. IN THAT SENSE,
IT'S RELATIVELY EASY. UM. IN, UH
, WELFARE MODELING IS FAR MORE
COMPLICATED. AND, UM. AND
GETTING ANY REAL TRANSPARENCY IS
GOING TO BE EXTREMELY
PROBLEMATIC. PROBLEMATIC. UM
THERE ARE TWO TYPES OF MODELING.
ONE TYPE, UH, INVOLVES
IDENTIFYING. UH INDIVIDUAL RISKS
INDIVIDUAL LOCATIONS OR
COMMUNITIES AND SCORING THEM.
AND THERE SEEMED TO BE A LOT OF,
UM CONFUSION ON THE PANEL THAT
OR AN EXPECTATION THAT
PROSPECTIVE MODELING WOULD MEAN
THAT WE WOULD BE DO A BETTER JOB
AT IDENTIFYING WHICH LOCATIONS
OR ENSURED DESERVE A DISCOUNT.
YOU DON'T NEED CAT MODELING FOR
THAT YOU DON'T NEED YOU DIDN'T
NEED CAT MODELING TO GIVE YOU A
, UH, AN ANTILOCK BRAKE CREDIT
ON YOUR CAR. SO, UM, LET'S CAT
MODELING IS ABOUT SIZING UP THE
TOTAL RISK. THE TOTAL DOLLARS
INVOLVED. UH I DON'T THINK THAT
CAT MODELING IS ABOUT FINDING
DISCOUNTS. CAT MODELING IS ABOUT
RAISING THE PRICES. AH I SAY
THIS. I AM HERE AS A CONSUMER.
UM IN IN PETALUMA. CURRENTLY
UNDER NOTICE OF CANCELATION. UH
NOW I DON'T MEAN TO JUST BAG ON
THE INSURANCE COMPANY. BUT I THE
REPRESENTATIVE THE DEPARTMENT. I
THINK HE KIND OF SOFT PEDALED
THAT ELEMENT OF IT AND TALKED
ABOUT PERSPECTIVE, MODELING AND
IN TERMS OF DISCOUNTS. UM, BUT
WHEN YOU TALK ABOUT A
FUNCTIONING INSURANCE, MOD, UH,
INSURANCE MARKET. IT DOES NEED
HIGHER PRICES. YOU'RE NOT GOING
TO HAVE A FUNCTIONING MARKET.
THE CURRENT PRICES ARE TOO LOW.
UM, THE. AND I DON'T HAVE A
STAKE IN THAT I DON'T OWN STOCK
IN ANY UH, PERSONAL LINES.
PROPERTY CASUALTY INSURERS IN
CALIFORNIA. UM. BUT UM I SAY
THAT AS A CONSUMER WHO WANTS TO
BE ABLE TO BUY INSURANCE IN A
COMPETITIVE MARKET. UM AND KNOW
THAT THAT IS GOING TO BE
ESSENTIAL TO THE FUNCTIONING OF
THE REAL ESTATE MARKET LONG TERM
AS WELL. SO, UM. AND I WILL TAKE
EXCEPTION WITH THE INTERVENER
PROCESS. THE PROPER REGULATIONS
WERE GREAT FOR AUTO INSURANCE.
IT'S AH THE PROP. ONE OF THREE
REGULATIONS DESCRIBE SHORT TERM
MODELS. WILDFIRE CATASTROPHE
MODELING UH, FOR PROPERTY IS A
LONG TERM PROBLEM, SO THERE ARE
FUNDAMENTAL FLAWS WITH THE PROP
103 METHODOLOGY. UM. THAT
ACTUALLY COULD BE FIXED IN
TRANSPARENT WAYS. IF YOU COULD
GET. THE PEOPLE OF CALIFORNIA TO
VOTE ON IT. SO WE HAVE A
POLITICAL PROBLEM. UM YOU DON'T
NEED A SOPHISTICATED CAT MODEL
THAT CAN'T BE EXPLAINED TO
ANYBODY. UH, WHAT YOU NEED IS A
TREND FACTOR ON THE 20 YEAR
HISTORICAL PERIOD WOULD PREFER
IT FOR FOUR YEAR HISTORICAL
PERIOD. AH! AND THERE ARE THAT
WOULD BE A SIMPLE, TRANSPARENT
SOLUTION THAT COULD GET YOU PART
WAY THERE. UM ALSO, UM. THE 2ND
0.0 ALSO THAT JUST THE TREND
PERIOD OF FIVE YEARS UH, FOR THE
INFLATIONARY TREND IS UM IS TOO
SHORT AS, UH, SOME INSURERS WILL
HAVE TUBBS FIRE LOSSES IN THE AT
THE BEGINNING OF THEIR
EXPERIENCE, PERIOD NOW, AND WE
ARE SEEING IT DOWNWARD TREND AND
COST. THAT'S RIDICULOUS. YOU
NEED A LONGER TREND PERIOD, SO
THERE'S SOME EASILY IDENTIFIABLE
, IDENTIFIABLE PROBLEMS WITH THE
PROP. ONE OF THREE METHODOLOGY.
AS ONLY AS FAR AS IT GOES FOR
HOMEOWNERS INSURANCE. I HAVE NO
OBJECTION. TO THE AUTO NOW THE
INTERVENER PROCESS. UM. MAKES IT
EXTREMELY DIFFICULT FOR ENSURED
TO CATCH UP WHEN THEY FALL
BEHIND. AND WE ARE IN A POSITION
WHERE THEY HAVE FALLEN BEHIND.
THEY CANNOT CATCH UP THE RIGHT
BECAUSE OF THE INTERVENER
PROCESS, SO WE'RE GOING TO NEED
TO FIND MORE CREATIVE SOLUTIONS
THAT DON'T INVOLVE A UM. VOTE OF
THE CITIZENS OF THE STATE. UM
SOME CREATIVE SOLUTIONS. WE
THERE WAS A MAYBACH TALKED
ABOUT, UH, MAYBE A NEW POLICY
FORM. WELL, IF THAT POLICY FORM
ISN'T SUBJECT TO PROP ONE OF
THREE. I'M ALL FOR IT. UH UM.
UH, WE'VE TALKED ABOUT A UM. IF
YOU CAN MAYBE WRAP UP PUBLIC
MODELS. I'M ALL FOR PUBLIC
MODELS, BUT HOW DO THEY FIT IN
THE PROP? ONE OR THREE
FRAMEWORK? YOU'VE GOT PROBLEMS.
UM FINALLY, ONE SPECIFIC
SOLUTION THAT MAY SEEM A LITTLE
WEIRD. UM THE RIGHT NOW. THE UM
THE FAIR PLAN. UH ASSESSMENTS GO
TO PROPERTY INSURANCE WRITERS.
WHICH CREATES A VICIOUS CYCLE AS
THE MARKET SHRINKS THEIR
EXPOSURE. THEIR FAIR PLAN
EXPOSURE GROWTH. YOU COULD UM,
DISCONNECT THAT. BREAK THAT
CYCLE BY. REWRITING THE FAIR
PLAN LEGISLATION TO ASSIGN THAT
RISK TO AUTO INSURERS. THAT
WOULD BREAK THE DISINCENTIVE AND
ALLOW PEOPLE TO WRITE. THANK
YOU. THANK YOU. OTHER MEMBERS OF
THE PUBLIC. OKAY, LOOKS LIKE
THAT. RAPPED OUT ALL RIGHT. WELL
THANK YOU AGAIN. EVERYONE REALLY
APPRECIATE EVERYONE COMING OUT
THOSE TUNING IN GREAT DISCUSSION
TODAY IS ASSEMBLYMEMBER'S WOULD
NOTED THIS WILL BE THE FIRST
AMONGST MANY OBVIOUSLY A CRUCIAL
TOPIC AND A COMPLEX ONE AS WE
GOT A TASTE OF TODAY, BUT I
THINK WE GOT A LOT OF GREAT
INFORMATION, SO THANK YOU AGAIN.