WELLCO TO THE ASSEMBLY INSURANCE
COMMITTEE OVERSIGHT HEARING OF
THE CALIFORNIA DEPARTMENT OF
INSURANCE. THIS HEARING IS
FOCUSED ON THE SUSTAINABLE
INSURANCE STRATEGY ANNOUNCED IN
SEPTEMBER BY INSURANCE
COMMISSIONER LOTTA TODAY, WE
HAVE THE OPPORTUNITY TO HEAR
FROM THE COMMISSIONER ABOUT HIS
STRATEGY. AS WE KNOW THE STATUS
QUO FOR OUR CONSTITUENTS IS NOT
SUSTAINABLE. THE CALIFORNIA
INSURANCE MARKET WAS BUILT ON
KEEPING INSURANCE RATES FAIR AND
AFFORDABLE WHILE ALSO ENSURING
AND COMPETITIVE MARKET. WHEN
THESE GOALS WERE SOLIDIFIED
DECADES AGO, IT DID NOT ACCOUNT
FOR THE ENVIRONMENT WE ARE IN
TODAY. CONSTITUENTS NEED OPTIONS
, THE MORE INSURANCE COMPANIES
ISSUING INSURANCE POLICIES, THE
BETTER. OPTIONS ARE NO LONGER
AVAILABLE. OUR CONSTITUENTS ALSO
NEEDS STABILITY. THEY DON'T WANT
TO LIVE IN FEAR OF BEING NON
RENEWED. LASTLY OUR CONSTITUENTS
SHOULD NOT BE UTILIZING THE FAIR
PLAN AS THE INSURER OF FIRST
RESORT YET IT SEEMS OUR CURRENT
MARKET HAS ALTERED THE PURPOSE
OF THE SAFETY NET. THIS COULD
HAVE GRAVE CONSEQUENCES IF A
NATURAL DISASTER OCCURS. IT
TAKES A LOT OF COURAGE TO MAKE
DIFFICULT DECISIONS. I COMMEND
THE COMMISSIONER FOR USING HIS
AUTHORITY TO ANALYZE THE CURRENT
INSURANCE MARKET. AND FOR COMING
TO THE CONCLUSION THAT
MODERNIZATION IS MUCH NEEDED.
I'M INTERESTED TO HEAR TODAY HOW
AND WHEN THE SUSTAINABLE
INSURANCE STRATEGY WILL BE
IMPLEMENTED. I ALSO WANT TO KNOW
WHAT OUR CONSTITUENTS CAN EXPECT
MORE INSURANCE OPTIONS,
STABILITY AND WHEN THEY CAN STOP
RESORTING TO THE FAIR PLAN AT
THIS TIME, I WOULD LIKE TO
PROVIDE MY COMMITTEE MEMBERS THE
OPPORTUNITY TO MAKE BRIEF
OPENING REMARKS. OKAY WE STILL
HAVE TWO OTHER MEMBERS THAT WILL
PROBABLY COME IN. THEY'RE
PROBABLY PARKING. SO WELCOME.
INSURANCE COMMISSIONER LARA.
IT'S GREAT TO BE HERE AND
BEAUTIFUL PASADENA CITY HALL. UM
GOOD AFTERNOON CHAIR. WOMAN.
CALDERON DECEMBER WHAT STAFF AND
HOPEFULLY WE SEE VICE CHAIR
ASSAILING COMING IN. UM, THANK
YOU FOR INVITING ME TO SPEAK
WITH YOU TODAY. UH AS YOU KNOW,
CALIFORNIA IS THAT AN INSURANCE
CROSSROADS AND FOR MANY
CALIFORNIANS, THIS IS AN
INSURANCE EMERGENCY. CONSUMERS
ARE EXPERIENCING THE IMPACT OF
GROWING CLIMATE THREATS,
HISTORIC INFLATION AND OUTDATED
REGULATIONS. AS A STATE
INSURANCE REGULATOR. MY FOCUS IS
SAFEGUARDING THE INTEGRITY OF
THE INSURANCE MARKET, WHICH
INCLUDES PROTECTING CONSUMERS
AND BUSINESSES. IN SEPTEMBER, I
ANNOUNCED MY SUSTAINABLE
INSURANCE STRATEGY, WHICH IS THE
LARGEST INSURANCE REFORM SINCE
VOTERS PASSED PROPOSITION 103
NEARLY 35 YEARS AGO. THERE IS NO
QUESTION THAT THIS RISK THAT
EXISTED THAT THE RISK THAT
EXISTED WHEN VOTERS PASSED PROP.
ONE OR THREE ARE NOT THE SAME
RISKS WE ARE FACING TODAY. THE
INSURANCE MARKET WE ARE DEALING
WITH TODAY NECESSITATES URGENT
MEASURES THAT EVEN THE GOVERNOR
RECOGNIZES AS SET FORTH IN HIS
EXECUTIVE ORDER ISSUED ON
SEPTEMBER 21ST. MY STRATEGY IS
BASED ON A THOROUGH ASSESSMENT
OF TODAY'S INSURANCE LANDSCAPE
WITH INPUT FROM WILDFIRE
SURVIVORS, RANCHERS AND FARMERS
SUPPORTIVE HOUSING GROUPS,
REALTORS HOMEOWNERS, CONDO
ASSOCIATIONS, NEW HOME BUILDERS
AND OTHER INSURANCE CONSUMERS
THAT ARE MOST AFFECTED. WE ARE
MOVING WITH URGENCY AND
DELIBERATELY BASED ON FACTS, AND
WE WON'T BE PRESSURED BY
ENTRENCHED GROUPS SEEKING TO
DEFEND A BROKEN STATUS QUO THAT
PUTS THEIR INTERESTS AHEAD OF
THE PUBLIC'S BENEFIT. IT IS
CLEAR THAT INSURANCE REFORMS ARE
LONG OVERDUE, AND THE CURRENT
SYSTEM DOES NOT ADDRESS THE
INSURANCE CHALLENGES OF TODAY. I
AM TAKING ACTION TO IMPLEMENT
LASTING CHANGES THAT WILL MAKE
CALIFORNIANS SAFER THROUGH A
STRONGER, MORE SUSTAINABLE
INSURANCE MARKET. AS I WILL
DISCUSS IN GREATER DETAIL IN MY
TESTIMONY. MY STRATEGY CONSISTS
OF THE FOLLOWING COMPONENTS
STREAMLINING THE RATE
APPLICATION PROCESS, INTRODUCING
RISK MANAGEMENT TOOLS SUCH AS
CATASTROPHIC MODELING AND NET
COST OF REINSURANCE, WITH THE
COMMITMENT FROM INSURANCE
COMPANIES TO WRITE AT LEAST 85%
OF HOMES AND BUSINESSES IN
DISTRESSED AREAS. AND, OF
COURSE, STRENGTHENING THE FAIR
PLAN. CURRENTLY IN THE PROPERTY
INSURANCE MARKET IN CALIFORNIA,
SEVEN OF THE TOP 12 INSURANCE
GROUPS HAVE PASSED OR RESTRICTED
NEW BUSINESS IN THE PAST YEAR.
INSURANCE COMPANIES ACTIONS
AFTER MULTIPLE YEARS OF FIVE OF
MAJOR WILD FIGHTERS AND WINTER
STORMS HAVE PUSHED MORE PEOPLE
TO THE FAIR PLAN. AS YOU
NOTICED, AS YOU KNOW, NOTIFIED
AS CHAIRWOMAN, WHICH HAS BECOME
THE ONLY OPTION INSTEAD OF THE
LAST OPTION FOR MANY
CALIFORNIANS. FOR MANY PEOPLE
WHO CANNOT OBTAIN INSURANCE AT
ANY PRICE, EXCEPT FROM THE
CALIFORNIA FAIR PLAN. THIS IS
TRULY AN INSURANCE EMERGENCY.
THE NEXT SLIDE, YOU'LL SEE THE
FAIR PLAN HAS GROWN 20% THIS
YEAR ALONE. NOW UM, NOW MORE
THAN 330,000 RESIDENTIAL
POLICIES. SO WHY DOES THIS
MATTER? WHY IS THIS A PROBLEM?
TO PUT IT SIMPLY INCREASING THE
NUMBER OF POLICYHOLDERS IN THE
FAIR PLAN THREATENS THE SOLVENCY
OF INSURANCE COMPANIES IN A
VOLUNTARY MARKET. IF THE FAIR
PLAN EXPERIENCES A MASSIVE LOSS
AND CANNOT PAY ITS CLAIMS BY LAW
, INSURANCE COMPANIES ARE THE
ONES ON THE HOOK FOR THE UNPAID,
FAIR PLAN LOSSES. WHILE THIS
ASSESSMENT ON INSURANCE
COMPANIES HASN'T HAPPENED IN
NEARLY 30 YEARS, IT'S THE
UNCERTAINTY THAT IS DRIVING
INSURANCE COMPANIES COMPANIES TO
FURTHER LIMIT COVERAGE. TWO AT
RISK CALIFORNIANS. THIS IS WHY
MY STRATEGY SEEKS TO INCREASE
INSURANCE AVAILABILITY WHILE
REDUCING THE PRESSURE ON AN EVER
GROWING FAIR PLAN AND ON
CALIFORNIA CONSUMERS. WE MUST
REVERSE THIS TREND OF A GROWING
FAIR PLAN IF WE'RE GOING TO
SAFEGUARD THE STATE'S INSURANCE
MARKET AS A WHOLE. WE ARE ALSO
STABILIZING THE CURRENT
INSURANCE MARKET. WE ALSO CANNOT
STABILIZE THE CURRENT INSURANCE
MARKET WITHOUT RECOGNIZING THE
IMPACT OF CLIMATE CHANGE.
CONSUMERS ARE EXPERIENCING THE
IMPACT OF GROWING CLIMATE
THREATS AND OUTDATED
REGULATIONS. CALIFORNIA IS
LEADING NATIONALLY AND GLOBALLY
IN PREPARING INSURANCE MARKETS
FOREVER CHANGING CLIMATE. OUR
DEPARTMENT OF INSURANCE IS THE
FIRST IN THE NATION TO HAVE A
BRANCH FOCUSED ON CLIMATE CHANGE
THAT I CREATED WHEN I FIRST TOOK
OFFICE IN 2019, AND WE ARE
WORKING COLLABORATIVELY WITH
OTHER STATE INSURANCE
DEPARTMENTS THROUGH THE NATIONAL
ASSOCIATION OF INSURANCE
COMMISSIONERS, WHERE I CO CHAIR,
ITS FIRST CLIMATE RISK AND
RESILIENCY TASK FORCE. THOSE ARE
THROUGH THOSE NATIONAL EFFORTS.
WE HAVE MOVED FORWARD ON A
BIPARTISAN WAY TO STRENGTHEN NOT
ONLY OUR OVERSIGHT, BUT ADDRESS
CLIMATE CHANGE THROUGHOUT OUR
COUNTRY. WE ARE ALSO WORKING
DIRECTLY WITH THE UNITED NATIONS
AND IN RECENT CLIMATE MEETINGS
IN DUBAI, I MET DIRECTLY WITH
OTHER NATIONAL INSURANCE LEADERS
WHO ARE PRESSING THE AGENDA. UH
ON REDUCING CLIMATE EMISSIONS
AND IMPROVING COMMUNITY
RESILIENCE. I WAS ONE OF ONLY
THREE DEPARTMENT LEADERS IN
CALIFORNIA, ALONG WITH THE
NATIONAL REACH RESOURCE AGENCY
AND THE AIR RESOURCES BOARD. TO
BE CREDENTIAL TO ATTEND THE
RECENT CLIMATE CONFERENCE IN
DUBAI, WHERE WE ANNOUNCED THAT
THIS SPRING, CALIFORNIA WILL BE
HOSTING THE UNITED NATIONS
PRINCIPLES, SUSTAINABLE
INSURANCE EVER SUMMIT HERE IN
LOS ANGELES. INSURANCE IS NOW
SQUARELY ON THE AGENDA FOR
GLOBAL CLIMATE ACTION, WHICH WAS
NOT THE CASE WHEN I TOOK OFFICE
MORE THAN FOUR YEARS AGO. ALL OF
THESE EFFORTS INFORM THE WORK
THAT WE ARE DOING HERE IN
CALIFORNIA TO CREATE A MORE
SUSTAINABLE INSURANCE STRATEGY.
NOW. I WANT TO DISCUSS THE
COMPONENTS OF MY STRATEGY AND
MORE DETAIL, STARTING WITH THE
RATE APPLICATION REVIEW PROCESS,
WHICH MANY OF YOU HAVE ASKED ME
OVER THE LAST COUPLE OF MONTHS.
SO MY DEPARTMENT IS EXPERIENCING
THE SAME SHORTAGE OF ACTUARIES
AND ANALYST THAT OTHER COMPANIES
AND GOVERNMENT AGENCIES ARE
EXPERIENCING SINCE THE PANDEMIC.
WE ARE FOCUSED ON STRENGTHENING
OUR RATE RELATE RATE REGULATION
BRANCH SO THAT WE CAN MEET THE
CURRENT DEMANDS ON RATE
APPLICATIONS THAT ARE BEFORE THE
DEPARTMENT. AND TO IMPLEMENT
REGULATORY CHANGES TO IMPROVE
RATE FILING PROCEDURES. TO PUT
THIS IN PERSPECTIVE. MY
DEPARTMENT IS CURRENTLY
REVIEWING 95 AND RAW RULE. RATE
AND RULE FILINGS FOR HOMEOWNERS
AND COMMERCIAL PROPERTY
INSURANCE. SO MY STRATEGY IS
REALLY AIMED AT IMPROVING OUR
AREAS OF THE RATE REVIEW PROCESS
, INCLUDING TIGHTENING, TURNING
UP THE PROCESS THE PROCEDURES TO
EXPEDITE RATE APPLICATIONS. THIS
PROCESS EXPANDS BEYOND THE
DEPARTMENT. WE EXPECT OUR
PARTICIPANTS IN THIS PROCESS,
INCLUDING INSURANCE COMPANIES
AND INTERVENERS TO WORK WITH US
TOWARDS IMPROVING OUR REVIEW AND
APPROVAL OF RATES, WHICH IS AN
ESSENTIAL PART OF HOW WE KEEP
INSURANCE AVAILABLE FOR OUR
STATE. FOR INSURANCE COMPANIES.
WE INTEND TO ENFORCE THE
REQUIREMENTS THAT ARE COMPLETE
RATE APPLICATION MUST BE
SUBMITTED TO THE DEPARTMENT
BEFORE THE CLOCK ON REVIEWING
THE APPLICATION BEGINS. LET ME
TELL YOU. IN THE PAST WE HAVE
ALLOWED INSURANCE COMPANIES TO
SUBMIT THEIR APPLICATION WITHOUT
THE COMPLETE DATA NEEDED. WHEN
THE MARKET CONDITIONS ARE
CHANGING RAPIDLY, AS YOU ALL
KNOW, WE DON'T HAVE THE LUXURY
OF THE TIME FOR A LENGTHY BACK
AND FORTH ABOUT INCOMPLETE
APPLICATIONS. WE EXPECT
INSURANCE COMPANIES TO PROVIDE
THE DEPARTMENT WITH THE COMPLETE
INFORMATION UPFRONT NEEDED TO
MAKE A DETERMINATION ON THE
REQUESTED RATE, AND OUR
DEPARTMENT WILL PROVIDE THE
RIGHT RECONCILIATION TOUR. TO
ASSIST THEM. SIMILARLY WE'RE
GOING TO ALLOW WE WILL ALLOW
THIRD PARTY INTERVENERS IN A
RATE APPLICATION TO ONLY RAISE
ISSUES THAT ARE RELEVANT IN THE
APPLICATION. RAISING UNRELATED
OR IRRELEVANT ISSUES ONLY SERVED
TO SLOW DOWN THE PROCESS, WHICH
HAS A DIRECT IMPACT ON CONSUMERS
AND INSURANCE AVAILABILITY,
ESPECIALLY WHEN THERE ARE OTHER
AVENUES TO RAISE THESE ISSUES.
OVERALL I BELIEVE THE GOLD, MORE
STREAMLINED, EFFICIENT AND
TRANSPARENT APPROACH WILL BE
BETTER REPRESENTING THE INTEREST
OF CALIFORNIA CONSUMERS. ANOTHER
COMPONENT OF OUR STRATEGY IS TO
ALLOW A NEW RISK ASSESSMENT
TOOLS THAT CAN SUPPORT GREATER
OF AVAILABILITY OF INSURANCE.
FOR THE PAST 30 YEARS THE
DEPARTMENT HAS RAISED HIS STORE
HAS USED HISTORIC LOSSES AS A
METHOD FOR ESTIMATING
CATASTROPHIC ADJUSTMENTS IN
CALIFORNIA'S GREAT APPROVAL
PROCESS. HOWEVER, HISTORIC
CLASSES, AS YOU KNOW, DO NOT
ACCOUNT FOR THE GROWING RISK
CAUSED BY CLIMATE CHANGE, NOR
DOES IT TAKE INTO ACCOUNT RISK
MITIGATION MEASURES, SUCH AS
HOME HARDENING, PRESCRIBED FIRES
OR HEALTHY FOREST PROJECTS. MY
DEPARTMENT HAS BEEN ENGAGED IN
ONGOING CONVERSATIONS AND PUBLIC
WORKSHOPS WITH THE PUBLIC.
ACADEMIA INSURANCE COMPANIES AND
CONSUMER GROUPS REGARDING THE
USE OF CATASTROPHIC MODELS IN
THE RATE APPROVAL PROCESS.
ALLOWING INSURANCE COMPANIES TO
USE CATASTROPHIC MODELING IN THE
RATE CALCULATIONS WILL GIVE THEM
THE ABILITY TO BETTER ANTICIPATE
FUTURE POTENTIAL CATASTROPHIC
CLASSES. THE USE OF CATASTROPHIC
MODELS WILL BE INFORMED BY
CALIFORNIA'S GOALS OF FAIRNESS,
AVAILABILITY AND AFFORDABILITY.
AND I RECOGNIZE THAT TIME IS OF
THE ESSENCE AS YOU AND I HAVE
TALKED ABOUT MANY TIMES
CHAIRWOMAN, BUT THIS IS NOT
SOMETHING THAT WE CAN THAT CAN
HAPPEN OVERNIGHT. THE PROCESS OF
INCORPORATING CATASTROPHIC
MODELS INTO CALIFORNIA'S RATE
APPROVAL PROCESS. IT'S REALLY A
COMPLICATED ONE, QUICKLY FINDING
OUT AND INVOLVES MULTIPLE
BRANCHES OF MY DEPARTMENT TO
WORK TOGETHER ON A SOLUTION. MY
LEGAL TEAM IS WORKING AND HOW TO
INTO HOW THE INTRODUCTION OF
CATASTROPHIC MODELS TO THE RATE
APPROVAL PROCESS WILL MEET THE
PUBLIC INSPECTION REQUIREMENT
SET FORTH IN THE INSURANCE CODE
SECTION 1861.07. IT IS IMPORTANT
TO CONSIDER THAT CALIFORNIA'S
PUBLIC INSPECTION REQUIREMENT
AND THE EXTENT TO WHICH THE
INNER WORKINGS OF CATASTROPHIC
MODELS CAN BE PUBLICLY
DISCLOSED. MY CLIMATE TEAM IS
WORKING ON HOW THE DEPARTMENT
WILL ENGAGE WITH EXPERTS TO
STRENGTHEN OUR UNDERSTANDING OF
WILDFIRE MODELING FACTORS AND
APPROACHES. MY CLIMATE TEAM IS
ALSO USING A DATA DRIVEN PROCESS
TO DEFINE WHAT WILL CONSTITUTE A
DISTRESSED AREA. FOR THE PURPOSE
OF THE MEETING AND INSURANCE
COMPANIES COMMITMENT TO
INCREASING THEIR MARKET SHARE IN
THESE DISTRESSED AREAS, AS WE'VE
TALKED ABOUT REGULATION TEAM IS
WORKING ON THE REGULATORY TAX,
WHICH WILL SET FORTH THE MODELS
THAT WILL BE USED IN THE RATE
CALCULATIONS IN THE RATE
APPLICATION. THE CURRENT RULE
MAKING PROCESS FORMULA IS NOT
STRUCTURALLY SET UP TO ACCEPT
THE MODELED LOSSES. IN ADDITION,
THE ABOVE WORK MY DEPARTMENT TO
THE ABOVE WORK. MY DEPARTMENT'S
EXAMINING THE USE OF BOTH PUBLIC
AND PRIVATE MODELS BASED ON
CONVERSATIONS AND WORKSHOPS WITH
THE PUBLIC. WE RECOGNIZE THE
BENEFITS OF BOTH PRIVATE AND
PUBLIC MODELS THAT ARE PURSUED
THAT WE ARE GOING TO BE PURSUING
BOTH TRACKS. I LOOK FORWARD TO
IT INTRODUCING THIS REGULATION.
FOR PUBLIC INPUT AND ADOPTION IN
2024. LET'S TALK ABOUT
REINSURANCE. REINSURANCE IS AN
INCREASING EXPENSE INCURRED BY
INSURANCE COMPANIES AS PART OF
THE COST FOR RIDING HOME AND
BUSINESS POLICIES ENSURED
NATURAL DISASTER LOSSES HAVE
INCREASED FROM SEVEN FROM 5 TO
7% ANNUALLY FOR THE LAST 30
YEARS, AND THE INSURANCE
COMPANIES ARE TAKING ON MORE RE
INSURANCE TO COVER THEIR
INCREASES. CALIFORNIA IS ONE OF
FEW STATES IN THE NATION THAT
DOES NOT ALLOW INSURANCE
COMPANIES TO RECOVER THIS
EXPENSE, WHICH CONTRIBUTES TO
THEIR DECISION TO REDUCE NEW
POLICIES OR TO RESTRICT WRITING
IN THE LOWEST RISK POLICY TO THE
LOWEST REX POLICIES. WE RECENTLY
REVIEWED INSURANCE COMPANIES.
ANNUAL CLIMATE RISK DISCLOSURES
MADE THROUGH THE NATIONAL
ASSOCIATION OF INSURANCE
COMMISSIONERS. R 2023. ANALYSIS
SHOWS THAT REINSURANCE IS AN
IMPORTANT COMPONENT OF HOW
INSURANCE COMPANIES MANAGE THAT
RISK, ENABLING THEM TO WRITE
POLICIES DESPITE THE GROWING
THREAT. THIS IS WHY MY
DEPARTMENT IS EXAMINING HOW TO
ALLOW INSURANCE COMPANIES TO
RECOVER THEIR CALIFORNIA ONLY
NET COST OF REINSURANCE. OUR
GOAL HERE IS FOR CONSUMERS TO
HAVE INSURANCE OPTIONS BY
ALLOWING INSURANCE COMPANIES TO
RECOGNIZE AND RECOVER THEIR
CALIFORNIA ONLY NET COST OF
REINSURANCE AND LETTING THEM
REFLECT IN THE RATES. THIS WILL
ENCOURAGE CARRIERS TO ONCE AGAIN
RE ENTER AND EXPAND THEIR
BUSINESS IN THE CALIFORNIA
PROPERTY MARKET. RATES THAT ARE
MORE ACCURATELY REFLECTED,
REFLECTING THE COST OF DOING
BUSINESS IN CALIFORNIA. OUR
CURRENT REGULATORY STRUCTURE
DOES NOT ALLOW INSURANCE
COMPANIES TO REFLECT THE TRUE
COST OF WRITING BUSINESS HERE IN
CALIFORNIA, AND THAT IS HELPING
CONTRIBUTE TO THE CURRENT
INSURANCE AVAILABILITY ISSUE.
INSURANCE COMPANIES WILL NOT
RETURN TO CALIFORNIA UNLESS
THEY'RE ABLE TO CHARGE RATES
THAT ARE JUSTIFIED TO COVER THE
RISKS AND PROVIDE THE
OPPORTUNITY TO EARN A FAIR
RETURN. WELL, CALIFORNIA SEE
INCREASED INSURANCE CAST IN THE
FUTURE. THE ONLY REALISTIC
ANSWER IS YES. I HAVE BEEN CLEAR
THAT INCREASING AVAILABILITY OF
INSURANCE IS HOW WE ARE GOING TO
PROTECT AFFORDABILITY. WE NEED
TO FOCUS ON GETTING INSURANCE
COMPANIES BACK TO WRITING
POLICIES IN CALIFORNIA AND TWO
POINT WHERE THEY ARE COMPETING
TO A POINT WHERE THEY'RE
COMPETING AGAIN FOR CALIFORNIA'S
CALIFORNIA'S BUSINESS. AS THE
LARGEST INSURANCE MARKET IN THE
NATION. CALIFORNIA'S INSURANCE
RATES ARE FAR LOWER ON AVERAGE
THAN MANY LARGE STATES THAT FACE
GROWING RISK FROM CLIMATE
CHANGE, PARTICULARLY IN
HURRICANES ON THE EAST COAST AND
ON THE GULF COAST. BUT IF YOU
ASK PEOPLE IN SOUTH LAKE TAHOE
IN PARADISE AND LAKE ARROWHEAD
OR ALL AND OTHER PLACES WHERE
THE FAIR PLAN IS GOING UP, THEY
ARE ALREADY PAYING MORE AND NOT
GETTING ANYTHING IN RETURN.
THOSE PREMIUMS INCREASES ARE
HAPPENING UNDER THE CURRENT
REGULATION, WHICH CLEARLY IS NOT
WORKING IN THOSE AREAS. MOST
IMPORTANTLY, THE TO RISK
ASSESSMENT TOOLS. I HAVE JUST
DISCUSSED CATASTROPHIC MODELING
AND CALIFORNIA ONLY REINSURANCE
ARE SIGNIFICANT BECAUSE TO USE
THEM TO SET FUTURE RATES,
INSURANCE COMPANIES MUST SATISFY
TWO COMMITMENTS, AND THAT IS THE
IMPORTANT PART OF THIS
UNDERSTANDING. THE FIRST IS THAT
THEY MUST INCREASE WRITING AND
AT LEAST 85% OF HOMES AND
BUSINESSES. IN WILDFIRE
DISTRESSED AREAS. THE SECOND IS
THAT THEY MUST HELP THE POPULATE
THE FAIR PLAN. INSURANCE
COMPANIES THAT CANNOT MEET THIS
COMMITMENT WILL NOT BE ABLE TO
USE EITHER CATASTROPHIC MODELING
OR CALIFORNIA ONLY REINSURANCE
AS PART OF THE RATE APPLICATION.
INSURANCE COMPANIES HAVE FAILED
TO FOLLOW THROUGH ON THEIR
COMMITMENT WILL HAVE THE RATE
REASSESSED BY MY DEPARTMENT.
LET'S TALK ABOUT THE FAIR PLAN.
WHAT THE FOLKS WHAT WE FOCUS ON
SHRINKING THE FAIR PLAN. IT'S
STILL WILL BE A TEMPORARY OPTION
IN THE SHORT TERM FOR MANY
CALIFORNIANS, UNFORTUNATELY, WE
NEED TO MAKE IMPROVEMENTS TO THE
FAIR PLAN SO THAT IT CAN SERVE
ITS LEGISLATIVE INTENDED PURPOSE
OF CREATING STABILITY IN THE IN
THE PROPERTY INSURANCE MARKET
WHILE PROVIDING CONSUMERS WITH
THE BEST POSSIBLE CONSUMERS
CUSTOMER SERVICE. WHEN I TOOK
OFFICE, ONE OF MY FIRST ACTIONS
WAS TO UNDERTAKE REFORMS TO THE
FAIR PLAN. THE FAIR PLAN HAD
BEEN NEGLECTED FOR MANY YEARS
UNDER MULTIPLE INSURANCE
COMMISSIONERS. MANY PEOPLE DID
NOT UNDERSTAND WHY WE PUSHED FOR
THESE REFORMS. SO ARGENT LI IN
2019, BUT NOW IT IS CLEAR WHY WE
DID THAT. AND HOW NECESSARY
THESE REFORMS ARE FOR
CALIFORNIANS, ESPECIALLY NOW.
LET ME TALK ABOUT A FEW OF THOSE
. WE INCREASED COVERAGE LIMITS
FOR THE FIRST TIME IN TWO
DECADES, GOING FROM 1.5 MILLION
TO 3 MILLION FOR RESIDENTIAL
POLICIES AND FOR AND FROM 3.6
MILLION FOR ITS BUSINESS OWNERS
POLICY TO 4.5 MILLION FOR ITS
COMMERCIAL PROPERTY POLICY TO 20
MILLION FOR BOTH OPTIONS. WE
ORDERED A FAIR PLAN TO ACCEPT
MONTHLY PAYMENTS AND TO TAKE
CREDIT CARD PAYMENTS. WE WORKED
WITH THE LEGISLATURE AND THE
GOVERNOR'S ADMINISTRATION TO
ALLOW FOR COVERAGE FOR FARM
BUILDINGS. WITHOUT THOSE
CHANGES, THE PROBLEMS WOULD BE
WORSE TODAY. HOMEOWNERS AND
BUSINESSES WOULD BE UNDER
INSURED FOR HUNDREDS OF
THOUSANDS, IF NOT MILLIONS OF
DOLLARS MORE RETIREES WOULD BE
UNABLE TO AFFORD A SIX MONTH
PREMIUMS THAT HAVE ONLY GONE UP
AND MORE FARMS WOULD BE
UNINSURED, FACING CATASTROPHIC
LOSSES. THERE ARE MORE CHANGES
TO THE FAIR PLAN THAT ARE
DEFINITELY NEEDED. AS PART OF
THE STRATEGY WILL BE WORKING TO
INCREASE COVERAGE TO 20 MILLION
PER BUILDING FOR OUR LARGE
HOMEOWNERS ASSOCIATIONS. CONDO
ASSOCIATIONS FARMS, ANOTHER
BUSINESS BUSINESSES. LAST MONTH,
THE COURT UPHELD MY ORDER TO
THAT THE FAIR PLAN OFFER A MORE
COMPREHENSIVE HOMEOWNER'S POLICY
INSTEAD OF FORCING CONSUMERS TO
PURCHASE A SEPARATE POLICY. UH I
DIDN'T ADDITIONAL COST ONLY
EXACERBATING THE COST FOR THE
CONSUMER. IT'S TIME AT THE FAIR
PLAN NOW END THEIR CHALLENGE AND
, UH, CHALLENGE OF MY ORDER AND
WORK TO IMPLEMENT IT. WE DON'T
HAVE TIME TO WASTE. THESE
ACTIONS ARE ALSO INCLUDED IN OUR
STRATEGY. MY DEPARTMENT ALSO HAS
A GOAL OF SUBMITTING EACH OF THE
DIFFERENT REGULATORY EFFORTS
ASSOCIATED WITH THE DIFFERENT
COMPONENTS OF THE STRATEGY BY
THE END OF 2024, AND WE'VE
DISCUSSED EACH COMPONENT
REQUIRES CAREFUL ANALYSIS BY ALL
PARTS OF MY DEPARTMENT,
INCLUDING MY LEGAL CLIMATE
REGULATION BRANCH AND THE
SPECIAL COUNSEL'S OFFICE. DO NOT
WANT ANOTHER INSURANCE
COMMISSIONER TO BE BACK IN FRONT
OF YOU IN THE NEXT FIVE OR 10
YEARS BECAUSE THESE REGULATIONS
ARE NOT STAND THE TEST OF TIME.
SO LET'S TALK ABOUT HOW THIS
BENEFITS THE CONSUMER AS YOU
ARE. MANY OF YOU HAVE CONTINUED
TO DISCUSS WITH ME. UNDER THE
STRATEGY. THERE IS A CLEAR
BENEFIT FOR CONSUMERS AND AREAS
WHERE THE FAIR PLAN HAS BECOME
THE ONLY OPTION. CONSUMERS GET
GREATER INSURANCE AVAILABILITY
AND TO REACH THE 85% TARGET.
INSURANCE COMPANIES MUST TAKE
POLICIES FROM THE FAIR PLAN,
USING THE CLEARINGHOUSE PROGRAMS
CREATED BY BILLS I'VE AUTHORED
AND PASSED BY THE LEGISLATURE
AND SIGNED BY THE GOVERNOR.
THANK YOU FOR YOUR SUPPORT OF
THESE BILLS. THIS IS
GROUNDBREAKING BECAUSE CURRENTLY
THERE ARE NO REQUIREMENT. UNDER
PROP ONE OR THREE OR ANY LAW FOR
INSURANCE COMPANIES TO WRITE
POLICIES IN AN AREA A LIMIT THAT
WAS ENFORCED IN COURT UNDER
FORMER INSURANCE COMMISSIONER
GARAMENDI. IN THE NEXT SLIDE.
THE LEGISLATURE'S SUPPORT IS
ESSENTIAL FOR OUR ONGOING
EFFORTS. YOUR GROUNDBREAKING
BUDGET INVESTMENTS ALONG WITH
GOVERNOR NUISANCE ADMINISTRATION
IN WILD FIRE SAFETY ARE
TRANSFORMING OUR EXISTING
COMMUNITIES. MY DEPARTMENT IS
FINALIZING MY SAFER FROM
WILDFIRES REGULATION DISCOUNTS,
WHICH WILL APPLY THE BENEFITS OF
WILD FIRE SAFETY SPENDING. YOUR
SUPPORT FOR ADDITIONAL STAFF AND
SUPPORT FOR OUR DEPARTMENT. IN
THE RECENTLY SIGNED BUDGET WILL
BE CRITICAL AND IMPLEMENTING
THESE CRUCIAL REGULATORY
CHANGES. YOUR CONTINUED
INVOLVEMENT AND BUY IN
PARTNERSHIP OR ESSENTIAL
ESSENTIAL TO SUPPORT INVESTMENTS
IN WILD FIRE SAFETY TO WORK WITH
OUR FEDERAL PARTNERS TO BETTER
MANAGE OUR FEDERAL LANDS AND
INCREASED FUNDING FOR HOME,
HARDENING AND COMMUNITY GRANTS
AND MINISTERED BY THE STATE OF
CALIFORNIA. RISK REDUCTION IS
CENTRAL TO THE SAFETY AND LONG
TERM SUSTAINABILITY OF OUR
INSURANCE MARKET. THE
CONVERSATIONS WE'VE HAD WITH
RECENT LEGISLATIVE SESSION AS WE
DEVELOPED THIS STRATEGY SHOW
THAT WE ARE SEEING THE PROBLEM
VERY CLEARLY. AND YOU SHARE IN
MY NEED FOR URGENCY. THAT WILL
CONTINUE TO PARTNER WITH ALL
THOSE WHO WANT TO WORK
CONSTRUCTIVELY WITH US TOWARDS
REAL SOLUTIONS, AND I LOOK
FORWARD TO CONTINUE TO WORK WITH
YOU TO IDENTIFY INNOVATIVE WAYS
TO CREATE MORE AND MORE
RESILIENT MARKET FOR OUR STATE,
MORE RESILIENT COMMUNITIES TO
WITHSTAND CLIMATE CHANGE. THANK
YOU, AND I APPRECIATE YOUR TIME.
THANK YOU. INSURANCE
COMMISSIONER. LADA UM AT THIS
POINT, I'D LIKE TO SEE IF ANY OF
MY COLLEAGUES WOULD LIKE TO MAKE
A STATEMENT BEFORE WE GO INTO Q
AND A OKAY. ALL RIGHT. DO YOU
WANT TO START A QUESTION? MY
BOYS. THANK YOU, MADAM CHAIR.
GOOD AFTERNOON, COMMISSIONER
LARA. THE FIRST THING I WANT TO
SAY IS REALLY I WANT TO COMMEND
YOU FOR HAVING THE RIGHT TONE
AND STRATEGY FOR THE SERIOUSNESS
OF THE ISSUES WE'RE FACING. UM
THESE CHANGES PROBABLY SHOULD
HAVE BEEN DONE SOONER, BUT
BETTER LATE THAN NEVER. I GUESS
I WOULD SAY, UM MY QUESTION SOME
OF MY QUESTIONS FOR YOU. I AGREE
WITH THE STRATEGY IS JUST MORE
ON THE TIMELINE. SO JUST SO I
UNDERSTAND BETTER. WHY UM, I
THINK YOU SAID YOU HOPE TO HAVE
THESE ELEMENTS IN PLACE BY
DECEMBER OF 24. CAN YOU JUST
WALK ME THROUGH? WHY DOES IT
TAKE THAT LONG? ARE WE TALKING
ABOUT ISSUING RULES REGULATIONS?
AND IS THERE ANYTHING THE
LEGISLATURE CAN DO TO ASSIST AN
EXPEDITING THAT PROCESS? THANK
YOU. THE LEGISLATURE HAS ALREADY
TAKEN A VERY BOLD STEP AND
GIVING US THE BUDGET. WE NEED TO
HIRE THE ANALYST THAT WE NEED IN
OUR DEPARTMENT. WE'VE HAD RECORD
AMOUNTS OF FOLKS SINCE THE
PANDEMIC RETIRE. AND LIKE I SAID
EARLIER IN MY STATEMENT BEFORE
YOU WALKED IN, WE'RE STILL
DEALING WITH OVER 95 DIFFERENT
RATE FILINGS THAT A LIMITED
GROUP OF ANALYSTS ARE WORKING ON
AND ACTUARIES, SO THIS IS
ALLOWING US TO MOVE QUICKLY AND
HIRE FOLKS AND THE FACT IS THAT
IT TAKES THREE BRANCHES WITHIN
OUR DEPARTMENT TO REALLY LOOK AT
THESE REGULATIONS, AND I KNOW
THIS WAS A POINT OF AND
RIGHTFULLY SO, A POINT OF
CONVERSATION WITH THE
LEGISLATURE. WE NEED TO GET
THESE DONE AS QUICKLY AS
POSSIBLE. UH SO, LIKE I SAID,
OUR LEGAL TEAM IS WORKING ON THE
INTRODUCTION OF THESE
CATASTROPHIC MODELS ARE CLIMATE
TEAM IS LOOKING AT HOW WE'RE
GOING TO ENGAGE WITH EXPERTS OF
HOW WE'RE GONNA USE THESE MODELS
, MAKING SURE THAT WE HAVE
PRIVATE PUBLIC OPTIONS FOR FOLKS
AND MY RAPE BRANCH. IS WORKING
ON THE REGULATORY TEXT THAT WILL
SET FORTH HOW THE MODELS ARE
GOING TO BE USED. AND ONCE WE
FINISH WORKING ON THOSE RAGS,
THEN WE HAVE TO SEND THEM TO THE
OFFICE OF ADMINISTRATIVE LAW SO
THAT THEY CAN REVIEW THEM AND
THEN HOPEFULLY APPROVE THEM
TIMELY. WE'VE BEEN WORKING WITH
THE GOVERNOR'S OFFICE TO MAKE
SURE THAT, UM ONCE WE GET THESE
DONE BY 2024, OR HOPEFULLY
BEFORE THAT THEY'RE QUICKLY
IMPLEMENTED SO THAT WE CAN START
WORKING ON THE RATE FILES THAT
THEN THE COMPANIES HAVE TO COME
IN, SUBMIT WITH ALL THE NEW
REGULATION SO THAT WE CAN TRY TO
GET THOSE AS QUICKLY AS
POSSIBLE. SO WE NEED TO HIRE. WE
NEED TO FINISH THESE REGULATIONS
BEFORE 2024 HAVE THE OFFICE OF
THE MINISTRY OF LAW APPROVED
THEM. AND THEN INSURANCE
COMPANIES COME IN WITH THE NEW
UPDATED RAY FILES. HOPEFULLY, I
HAVE FULLY STAFFED FOLKS. BY
THAT TIME AS WE'RE QUICKLY WE
JUST HAD A, UH, A JOB FAIR HERE
IN PASADENA AND, UH AND APPROVE
THOSE AS QUICKLY AS POSSIBLE SO
THAT WE CAN START SEEING THE
RELIEF. OKAY I JUST HOPE THAT WE
CAN GET THE RAGS DRAFTED SOONER
THAN LATER. BECAUSE I DON'T
THINK THERE WOULD BE THAT HARD.
I THINK THEY'RE SIMPLE AND I
THINK PEOPLE NEED TO UNDERSTAND.
ALL THE REGS DO IS ALLOW. THE
INSURERS TO SEEK REIMBURSEMENT
FOR REINSURANCE AND TO USE
MODELING. IT DOESN'T APPROVE IT.
YOU STILL GET TO REVIEW YOU'RE
STILL GOING TO REVIEW AND
APPROVE THAT THE REGS SIMPLY
ALLOW THEM TO CONSIDER THESE
ADDITIONAL THINGS. SO I'M HOPING
WE CAN GET THE REGS OUT SOONER
OR LATER. I DON'T THINK THEY
NEED TO BE. YOU KNOW THAT
COMPLICATED. UM AND YOU KNOW, I
REALLY JUST I HOPE PEOPLE
UNDERSTAND THAT WE'RE TALKING
ABOUT HERE IS NOT JUST HELPING
THE INSURANCE MARKET IS TO HELP
THE CONSUMER. BECAUSE THE ONLY
THING WORSE THAN HIGH INSURANCE
RATES IS HAVING NO INSURANCE,
AND I'M HEARING THAT FROM A LOT
OF PEOPLE. IT'S DEVASTATING TO
BUILDERS INSTEAD OF SAYING ALL
KINDS OF STUFF. UM SO, UM, I
THINK WE HAVE THE RIGHT
DESTINATION. YOU'VE GOT IT
LOCKED IN. I JUST WANT TO PUT
THE PEDAL TO THE METAL. AND GET
THERE FASTER. IF YOU HAVE TO
SPEED AND BREAK SOME TRAFFIC
CODES. I'M OKAY WITH THAT. JUST
GET THEIR, UH IT'S FOR A GOOD
CAUSE. AND THEN MY OTHER BIG
QUESTION AND I CAN I'LL GIVE IT
BACK TO THE CHAIRWOMAN AND SEE
IF THERE'S ANYTHING ELSE COMES
UP. UNDER PROP 103. ARE THERE
DIFFERENT TOPICS? WE'RE DOING
ALL THE QUESTIONS RIGHT NOW.
WHATEVER OKAY, ALRIGHT. JUST
MAKING SURE UNDER POP, ONE OF
THREE. I THINK THERE'S A HUGE
FLAW IN THE WAY IT WAS WRITTEN.
THE CREATION OF THIS CONSUMER
WATCHDOG GROUP THAT IS ALLOWED
TO INTERVENE AND DELAY. OBSTRUCT
AT COST TO THE PROCESS DOESN'T
MAKE SENSE TO ME. YOU ARE THE
CONSUMER WATCHDOG. YOU ARE
ELECTED BY THE MAJORITY OF
VOTERS IN THE STATE. YOU LOOK
OUT FOR THE CONSUMER, SO I KNOW
YOU HAVE SUGGESTED A DESIRE TO
IMPROVE TRANSPARENCY OF THE
INTERVENER PROCESS. BUT MY
QUESTION IS WHY NOT? SUPPORT
ELIMINATING THE INTERVENER
PROCESS, AND I KNOW THAT I HAVE
TO GO TO THE VOTERS, BUT THAT'S
SOMETHING THAT YOUR AGENCY IS
CONSIDERED. IS THAT SOMETHING
YOU WOULD TAKE A LOOK AT? YOU
KNOW, INTERVENERS ARE VERY
UNIQUE TO CALIFORNIA AND I'LL
TELL YOU PLAY A VERY IMPORTANT
ROLE. WHAT WE NEED TO DO IS MAKE
SURE THAT IT'S NOT JUST ONE. UH
ORGANIZATION THAT'S DOING THE
INTERVENING THAT WE ACTUALLY
ALLOW FOR DIVERSE INTERVENERS.
PEOPLE THAT COME FROM THESE
COMMUNITIES THAT WANT TO
UNDERSTAND THE RATE PROCESS, AND
THIS IS WHY I THINK WE NEED TO
BE MUCH MORE TRANSPARENT WITH
NOT ONLY WHO THESE INTERVENERS
ARE BUT ALSO IN THE REGULATORY
PROCESS IS ALLOWING THEM.
ALLOWING THE DEPARTMENT TO
FORBID THESE INTERVENERS FROM
HOLDING US HOSTAGE FROM NOT NOT
CUTTING AND PASTING THE CONCERNS
THAT THE DEPARTMENTS BROUGHT AND
THEN SAY THEY'RE INTERVENING
WITH THE SAME ISSUES, SO THAT IS
NO LONGER GOING TO BE THE CASE.
WE'RE GOING TO MAKE SURE THAT IF
YOU'RE GOING TO INTERVENE ONE
YOU'RE READY TO INTERVENE AS
PROPAGANDA THREE SAYS. THEY WON
AND THAT YOU HAVE TO BRING YOUR
GOING TO HAVE TO BRING ISSUES
THAT ARE RELATED TO THE RATE
FILE, NOT THESE OTHER ISSUES
THAT THERE'S OTHER VENUES TO BE
ABLE TO ADJUDICATE THOSE AND YOU
CAN NO LONGER JUST BRING UP THE
SAME ISSUES AT THE DEPARTMENT
THAT OUR INSURANCE EXPERTS HAVE
BROUGHT IN TO BE ABLE TO DELAY
THE PROCESS. WE CAN'T DELAY THIS
PROCESS AND FURTHER BUT I HAVE
TO TELL YOU INSURERS AND THAT
THE INTERVENERS PLAY AN
IMPORTANT PROCESS, BUT WE NEED
TO DIVERSIFY AND MAKE SURE THAT
THOSE INTERVENERS COME FROM THE
ACTUAL COMMUNITIES THAT ARE
SUFFERING THAT ARE DIVERSE AND
THAT THEY ALSO FEEL THAT THEY
CAN ENGAGE WITH THE DEPARTMENT.
BACK IN THE DAY WE HAD OTHER
INTERVENERS. UH THAT WERE ALSO
ENGAGING. UH SO WE'RE LOOKING AT
OTHER WAYS TO STREAMLINE THAT TO
MAKE SURE THAT WILL NOT HELP.
THE DEPARTMENT IS LONGER HELD
HOSTAGE AND THAT WE BRING THE
POWER BACK TO THE ACTUAL AS YOU
SAY, THE INSURANCE EXPERTS WITH
WHICH WHICH ARE THE MEN AND
WOMEN WHO WORK FOR THE
DEPARTMENT OF INSURANCE. YEAH
AND I LIKE I SAID, I SEE YOU AS
THE CONSUMER WATCHDOG. THAT'S
YOUR JOB, SO ALL RIGHT. THANK
YOU, MADAM CHAIR. SOME OF THEM
WOULD. CHAIR AND THANK YOU VERY
MUCH. COMMISSIONER LARA FOR
BEING HERE TODAY. I APPRECIATE
THAT APPRECIATE THE STEPS YOU'RE
TAKING TRULY, TRULY DO SO, UM, I
HAVE SOME QUESTIONS, QUESTIONS.
I LIVE IN AN AREA RIGHT NOW.
THAT IS VERY DIFFICULT TO GET
INSURANCE. THE ENTIRE ZIP CODE
IS ALMOST IMPOSSIBLE TO GET
HOMEOWNERS INSURANCE. AN ENTIRE
ZIP CODE, WHICH IS THE CITY THAT
I LIVE IN AND THE SURROUNDING
AREAS. UM SO I'M VERY INTERESTED
IN WHEN YOU TALK ABOUT ENSURING
85% OF HOMES AND BUSINESSES AND
DISTRESSED AREAS. WHAT IS THAT
GOING TO LOOK LIKE? BECAUSE MY
DISTRICT. MY AREA, RIGHT? THERE
IS A DISTRESSED AREA. WHAT I
WORRY ABOUT IS THAT I THINK
ABOUT THIS FROM ANOTHER
PERSPECTIVE. SOMETIMES WE USED
TO HEAR FOR YEARS THAT WELL, YOU
KNOW, WE'VE GOT 95% ADOPTION OF
BROADBAND. BUT NOT 95% ADOPTION
IN EVERY REGION. AND
CONSEQUENTLY MY AREA HAS THE
LOWEST ADOPTION OF BROADBAND IN
ANY AREA OF THE STATE. YET THAT
95% NUMBER SOUNDS GREAT UNLESS
YOU LIVE IN MY AREA, AND IT'S
CLOSER TO 80. SO HOW DO WE
ENSURE THAT COMPANIES ARE NOT
CHERRY PICKING? UM AND NOT
ENSURING PROPERTIES BECAUSE, UM,
IT'S EASIER TO DO THAN THAN IT
IS TO ACTUALLY ENSURE IN SOME
AREAS. UM THAT'S THAT'S I GUESS
THAT'S MY FIRST QUESTION. HOW DO
WE WHAT IS THAT GOING TO LOOK
LIKE BECAUSE IT WAS SO EASY TO
PICK 85% AND THEN LEAVE ENTIRE
COMMUNITIES OUT OF THE PROCESS,
AND THEY'RE NO BETTER OFF. YOU
AND I KNOW WE'VE HAD THIS
CONVERSATION. ASSUMING IT WOULD.
YOUR AREA IS EXACTLY THE AREA
THAT WE'RE THINKING ABOUT AS
BEING PRIORITIZED AS A WILDFIRE,
DISTRESSED AREA, AND THAT IS
WHERE WE'RE SEEING THAT WE NEED
RAPID, UM, NEED AND WHAT WE'VE
DONE IS ESPECIALLY NOW THAT WE
HAVE THIS CLEARINGHOUSE OF HOMES
THAT AS IN YOUR COMMUNITY HAVE
DONE SO MUCH WORK TO MITIGATE
THOSE PROPERTIES TO HARDEN THOSE
PROPERTIES. THERE IS A LIST NOW
THAT WE ARE GOING TO BE THE
FIRST TO BE DEPOPULATED AFTER
FAIR PLAN, AND THIS IS WHY THE
DISAGREEMENT IS HISTORIC BECAUSE
WHEN, AT FIRST WE APPROACHED THE
COMPANIES TO SAY HEY, WHAT ABOUT
YOU COMMIT TO 85% OF YOUR NEW
BUSINESSES OF EXPANDING YOUR
BUSINESS AND THESE DISTRESSED
AREAS. THEY WERE LIKE NO AND SO
WE ENGAGE WITH THEM ABOUT IF YOU
WANT TO USE THESE TOOLS YOU HAVE
TO COMMIT AND WE FINALLY AFTER
NEGOTIATING, THEY AGREED. AND
THIS IS WHY THIS IS SUCH AN
IMPORTANT. UM UH, AGREEMENT NOW
THE DEFINITION OF WILDFIRE,
DISTRESSED AREAS. IT'S GOING TO
GO THROUGH THE PUBLIC PROCESS TO
MAKE SURE THAT WE'RE BEING AS
EXPANSIVE AS WE CAN. BECAUSE THE
OTHER ISSUE IS IT'S NOT JUST THE
POLICIES ARE AT THE FAIR PLAN
BECAUSE THERE'S OTHER
COMMUNITIES THAT ARE ALSO WITHIN
THE FAIR PLAN. THAT ARE
CONSIDERED DISTRESS. BUT I
COMMIT TO YOU THAT THE WHOLE
REASON WE WERE PUSHING THE
INSURANCE COMPANIES TO
PRIORITIZE THESE AREAS. IS YOUR
DISTRICT IN MIND. BENDER MARRIED
MANY TIMES AND I'VE AND I KNOW
HOW DEVASTATING IT IS TO YOUR
COMMUNITIES TO YOUR LOCAL
ECONOMY AS A FAIR PLANT GROWS.
IT JUST INCREASES THAT
UNCERTAINTY FOR YOUR COMMUNITIES
, AND SO I'M PUTTING MYSELF ON
THE RECORD THAT IT IS YOUR
COMMUNITIES THAT WE SEEK TO
PRIORITIZE TO MAKE SURE THAT WE
GET THEM AFTER PER FARE PLAN AS
QUICKLY AS POSSIBLE, GET THEM IN
THE EMITTED MARKET AND GET THEM
TO GET INSURANCE COMPANIES TO
ONCE AGAIN COMPETE FOR THE
BUSINESS OF FOLKS IN YOUR
DISTRICT AND THROUGHOUT NORTHERN
CALIFORNIA, WHERE WE'RE SEEING
THIS BEING REALLY A BIG ISSUE.
WHY I KNOW THAT. I KNOW THAT MY
CONSTITUENTS. I WON'T SPEAK FOR
EVERY ONE OF THEM. BUT I'LL
SPEAK, YOU KNOW, FOR MYSELF AND
SOME OTHERS THAT I KNOW. THEY
WOULD NO ONE WANTS TO PAY MORE
FOR ANYTHING, RIGHT? BUTTER,
EGGS, MILK, WHATEVER. NOBODY
WANTS TO PAY MORE. BUT PEOPLE
WILL PAY MORE. FOR THE CERTAINTY
OF HAVING INSURANCE VERSUS NOT
HAVING INSURANCE, AND THAT'S WHY
IT IS STILL BAFFLING TO ME THAT
COMPANIES WILL TAKE AN URBAN
CORE OF A SMALL CITY AND DEEMED
THAT UNINSURABLE. I DON'T
UNDERSTAND WHY THAT IS AT A
WILDFIRE RISK. YOU KNOW, I
RECOGNIZE WHAT HAPPENED TO TUBBS
FIRE. THAT WAS A VERY DIFFERENT
ANIMAL. BUT BUT IT IS REALLY
DISTURBING TO ME THAT THIS ONE
SIZE PAINTBRUSH APPROACH BY SOME
COMPANIES IS REALLY AFFECTING
PEOPLE'S LIVES. IT'S AFFECTING
REAL ESTATE MARKET, EXPECTING
PEOPLE'S ABILITY TO MOVE ON IN
THEIR LIFE. UM AND IT IS IT IS,
IT IS. IT IS AN EMERGENCY FOR
SOME OF US, AND I KNOW IT'S FOR
OTHERS AS WELL. SO THANK YOU. I
APPRECIATE THAT. UM YOU
MENTIONED UM AND THIS IS KIND OF
BAFFLING TO ME INCOMPLETE
APPLICATIONS. WHY WOULD AN
INSURANCE COMPANY NOT GIVE YOU A
COMPLETE APPLICATION, KNOWING
THAT THERE'S ALWAYS BACK AND
FORTH? WHY WOULD EXPLAIN WHAT
EXPLAIN THAT TO ME BECAUSE I
DON'T UNDERSTAND. I WOULD NEVER
GIVE YOU AN INCOMPLETE
APPLICATION BECAUSE I WANT THE
PROCESS TO GO FASTER. AND SO
WHAT WE DISCOVERED WHEN I CAME
IN WAS THAT THIS WAS JUST PART
OF THE COURSE IN, YOU KNOW,
SUBMITTED INCOMPLETE APPLICATION
, HAVE IT START WITH THE ANALYST
AND THEN YOU'RE WORKING BACK AND
FORTH, WHICH ALSO CREATES THIS
BACKLOG AND REALLY JUST
EXACERBATES THE TIME THAT YOU
NEED AND SO THEN WE STARTED
HEARING FROM INSURANCE COMPANIES
WILL WHAT IS HAPPENING WITH MY
RATE APPLICATION? I COULD TELL
YOU 80% OF THE TIME TALKING TO
THE ANALYST WAS WHILE WE STILL
HAVEN'T RECEIVED INFORMATION,
WE'RE WAITING ON THEM TO RESPOND
TO THE INFORMATION THAT WE NEED.
AND SO PART OF THE NEGOTIATION
WAS WELL, WE'RE NO LONGER GOING
TO ALLOW YOU TO SUBMIT AN
INCOMPLETE APPLICATION BECAUSE,
AS YOU KNOW, AND I'LL TELL YOU
AS A NEW INSURANCE COMMISSIONER
BACK IN 2019, I'M LIKE, OKAY, SO
WE'RE APPROVED THIS RATES.
THAT'S IT. WE'RE GOOD. NO THE
IMMEDIATE TIME. THE IMMEDIATE
TIME THAT INSURANCE COMPANY
THERE ARE APPLICATIONS APPROVED.
THEY SUBMITTED ANOTHER ONE
IMMEDIATELY AND MORE THAN OFTEN,
IT WAS INCOMPLETE. CREATING THIS
ANIMOSITY ONCE AGAIN, UH, WITH
OUR DEPARTMENT, WHICH REALLY HAS
NO TIME TO START, YOU KNOW,
SECOND GUESSING THESE NUMBERS,
AND SO THIS IS WHY THIS IS ALSO
A KEY COMPONENT THAT BOTH
PARTIES CAME TOGETHER AND SAID,
WE'RE NO LONGER DOING THE
PLAYING THIS GAME. WE'RE GOING
TO ONLY ACCEPT COMPLETE
APPLICATIONS SO THAT WE CAN MOVE
QUICKLY BECAUSE WHAT'S HAPPENING
? REMEMBER AS YOU KNOW REALLY?
WHAT? YOUR DISTRICT AS YOU
REALLY, UM, POINTEDLY TALKED
ABOUT THE DOMINO EFFECT THAT
HAPPENS. YOU CAN FIND INSURANCE.
YOU CANCEL YOUR HOME LOWER
PROPERTY VALUES, THEN GUESS WHAT
. THE LOCAL GOVERNMENT DOESN'T
HAVE THE RESOURCES TO ACTUALLY
PAY FOR FIREFIGHTERS, RIGHT? AND
SO IT'S JUST IT'S JUST EVIL
CYCLE THAT HAPPENS SO WHAT WE'RE
DOING NOW IN IS MAKING SURE THAT
THESE COMPLETE APPLICATIONS ARE
DONE BECAUSE ALSO THE TIME IT
TAKES TO APPROVE. BY THE TIME
WE'RE, YOU KNOW, FINISHING THIS
BACK AND FORTH, THE RISK IS
GOING UP. BUT THE RATE IS STILL
STAYING FLAT BECAUSE WE'RE STILL
NEGOTIATING OF COMPLETE
APPLICATION, SO WE'RE NEVER
GOING TO CLOSE THAT PROTECTION
GAP AND WE'RE NEVER GOING TO GET
TO BE ABLE TO HAVE THE ADEQUATE
RISK BEING REFLECTED IN THESE
RATES. AND THAT'S WHY WE'RE
SEEING INSURANCE COMPANIES COME
OVER AND OVER AND OVER AGAIN
ASKING FOR A RATE APPLICATION
RATE FILING BECAUSE THE RISK
KEEPS GOING HIGH. AND WE'RE NOT
CLOSING THAT AS QUICKLY AS
POSSIBLE. SO THIS IS ONE WAY
THAT OUR DEPARTMENT CAME IN AND
SAID, WE CAN'T BE PLAYING THESE
GAMES ANYMORE. THE RISK IS
HAPPENING QUICKLY. WE NEED TO
GET THROUGH THESE FILES, SO
UNION YOU ALSO NEED TO COMMIT TO
GIVING US A COMPLETE FILE. SO
THAT'S THE HISTORY AROUND WHERE
WE DECIDED THIS WAS SUCH AN
IMPORTANT COMPONENT. TO OUR
STRATEGY. THANK YOU A COUPLE
MORE QUESTIONS. IF THAT'S OKAY,
MADAM CHAIR, OKAY? UM REGARDING
THE CAT MODELS, UM UM, OBVIOUSLY
THIS IS DONE IN OTHER STATES,
AND SURELY SOME ARE DOING THIS
PRETTY WELL. ARE WE RE INVENTING
THE WHEEL? ARE WE LOOKING AT
OTHER STATES AND TRYING TO
INCORPORATE WHAT'S WORKING WITH
THEM RATHER THAN STARTING FROM
SCRATCH AND CREATING OUR OWN CAP
CAP MODEL PROGRAM? AS YOU KNOW,
KEPT MODELS HAVE, UM, HAVE BEEN
AROUND FOR A WHILE, AND THEY'RE
VERY DIFFERENT THAN YOU KNOW,
THEY'RE MORE RELIABLE AROUND
FLOODING. YOU KNOW, YOU COULD
TELL WHEN THEY'RE JUST
ATMOSPHERIC RIVER COMING. YOU
KNOW HOW MUCH WATER IS GOING TO
GET DUMPED AND SO FORTH? IT'S
VERY NEW AROUND WILDFIRE. AS YOU
KNOW, UH, SHIFT IN THE WIND CAN
DETERMINE WHERE THE OUTCOME OF
THE FIRE AND SO THERE IS SCIENCE
OUT THERE THAT'S TRYING TO
FIGURE OUT HOW DO WE PREDICT
THESE FIRES AND WHERE WE DO THIS
MODELING NOW. YOU KNOW, FOR US
AND THE DEPARTMENT. OF COURSE,
WE HAVE A VERY THOROUGH CONSUMER
PROTECTIONS. AND OF COURSE, PROP
. ONE OF THREE ALLOWS TO MAKE,
YOU KNOW ALLOWS US TO REALLY
MAKE SURE THAT WE'RE PROTECTING
THE CONSUMER. SOME OF THE
THOUGHT BACK IN THE DAY WAS
WHILE IF WE ALLOW THESE MODELS
WITHOUT US BEING ABLE TO REALLY
UNDERSTAND HOW THEY'RE GONNA
REFLECT THE RISK ARE THEY JUST
GOING TO BE USED TO
DISCRIMINATE? WHO GETS
INSURANCE? AND WHO DOESN'T? SO
HOW DO WE CREATE NOT ONLY
REGULATION BUT THE EXPERTISE
WITHIN THE DEPARTMENT TO BE ABLE
TO VERIFY THESE MODELS AND WHAT
YOU KNOW WHAT THEY'RE DOING AND
HOW THEY'RE INTERACTING WITH THE
SPECIFIC CALIFORNIA LANDSCAPE.
SO ONE THING IS CLEAR. WE CAN NO
LONGER RELY ON HISTORICAL DATA
TO DETERMINE THE RISK RIGHT, SO
WE ELIMINATED THAT IMMEDIATELY.
AND NOW WE'RE LOOKING AND
WORKING WITH OUR COUNTERPARTS
THROUGHOUT OTHER STATES,
PARTICULAR THE WESTERN HALF OF
THE COUNTRY WHO ALLOW FOR SOME
OF THESE MODELS TO GET IN
PLACES. HOW ARE THEY USING THEM?
HOW ARE THEY PROTECTING
CONSUMERS? HOW TO MAKE SURE THAT
WE ARE CREATING SOME SORT OF
PUBLIC, UH, MODEL SO THAT WE CAN
USE THAT AS A BENCHMARK. RIGHT
THAT'S A GOAL FOR US TO AND SO
THESE ARE ALL NEW TECHNIQUES
THAT WE'RE USING, AND THAT WE'RE
GOING TO INCORPORATE WITHIN OUR
DEPARTMENT TO MAKE SURE THAT
WE'RE VERIFYING THESE MODELS
THAT WERE UNDERSTANDING. WHAT
KIND? WHAT TYPE OF, UM DATA IS
BEING FED IN THE MODELS SO THAT
WE'RE NOT INADVERTENTLY HURTING
CONSUMERS, BUT THAT WE'RE ALSO
USING TECHNOLOGY ALSO, AS YOU
KNOW, TO DETERMINE AND REALLY
BOILED DOWN TO THE HOME TO HAVE
THEM. PEOPLE TAKE HALF PEOPLE
TAKE CREDIT OR GIVE THE HAVE THE
INSURANCE COMPANY GIVE PEOPLE
CREDIT FOR THE HOME HARDING,
WHICH CURRENTLY DOES NOT EXIST,
SO YOU'RE A HOMEOWNER THAT HAS
BEEN THOUSANDS OF DOLLARS
HARDENING YOUR HOME RIGHT NOW.
YOU'RE NOT GETTING ANY CREDIT
FOR THAT. AND YOUR RATE REALLY
DOESN'T REFLECT THE WORK THAT
YOU'VE DONE ON YOUR PROPERTY. SO
THAT WAS ANOTHER WIN FOR US IN
FOR CONSUMERS IN THESE
NEGOTIATIONS, AND THAT INSURANCE
COMPANIES ARE NOT GOING TO HAVE
TO TAKE INTO ACCOUNT THEIR HOME
HARDENING, COUPLED WITH ARE
SAFER FROM WILDFIRES. REGULATION
IS GOING TO GIVE THEM A DISCOUNT
FOR DOING THAT WORK, AND SO
WE'RE STARTING TO USE INSURANCE.
TO PERPETUATE GOOD BEHAVIOR AND
REALLY RECOGNIZING THAT AND
GIVING CONSUMERS A DISCOUNT FOR
THAT, RIGHTFULLY SO, SO AGAIN,
IT'S ALL ABOUT BRINGING DOWN THE
RISK. YOU BRING DOWN THE RISK.
YOU GET INSURERS WRITING IN
THESE COMMUNITIES, AND ONCE
AGAIN I STARTED WENT AROUND IN A
MASSIVE CIRCLE, BUT THIS IS WHY
THESE MODELS BECOME IMPORTANT.
AND WE CAN'T SHY AWAY FROM
TECHNOLOGY ANYMORE, SO WE HAVE
TO GET CALIFORNIA BACK TO THE
FOREFRONT OF USING THESE MODELS.
THANK YOU. AND I WILL SAY THAT
YOU KNOW THAT SOME SOME PEOPLE
ARE ACTUALLY DOING A LOT OF WORK
TO REDUCE RISK. AND STILL BEING
CANCELED. YEAH SO THAT'S UM
WHICH IS WHY INCREDIBLY
DISCOURAGING, WHICH IS WHY THESE
MODELS ARE IMPORTANT SO THE
INSURANCE COMPANY CAN ACTUALLY
GO IN AND LOOK AND LOOK AT THE
HOME HARDING. THAT'S TAKEN PLACE
SO THAT THE RECONSIDER THESE
PROPERTIES RIGHT NOW YOU GET
SIFTED THROUGH A SATELLITE IMAGE
THAT REALLY DOESN'T LOOK AT THE
ACTUAL HOME. AND SO THEY'RE JUST
RIGHT NOW ON NON RENEWING SWATHS
OF PEOPLE. NOW THE DEPARTMENT'S
GOING TO BE ABLE TO ACTUALLY GO
IN AS WELL. AND LOOK AT WAIT.
WHY IS THIS HAPPENING? THESE
HOMES ARE HARDENED THESE HOMES,
MEET THE YOU KNOW, MEET THE
THRESHOLD. WHAT IS HAPPENING? SO
NOW WE'RE GOING TO BE ABLE TO
ACTUALLY HAVE THAT DATA
OURSELVES AND ACTUALLY SHARE
THAT DATA WITH LOCAL GOVERNMENTS
AND WITH WITH YOU ALL SO THAT
WE'RE ALL WORKING UNDER THE SAME
KIND OF INFORMATION, WHICH IS
IMPORTANT THAT WE CLEARLY DON'T
HAVE COUPLE MORE. AND THEN THE
LAST ONE IS BRIEF, BUT SO WE'RE
LOOKING AT, UM OBVIOUSLY, AND I
UNDERSTAND THE DYNAMICS OF SORT
OF CALIFORNIA ONLY CATASTROPHIC
MODELING. WE ARE UNIQUE. THERE'S
UNIQUE CHALLENGES HERE. AND JUST
I WON'T BELIEVE IT. LABOR THE
POINT SO MUCH, BUT I'M MORE
INTERESTED IN THE MECHANICS OF
ARE WE NOT ARE WE? WE'RE NOT
GOING TO HAVE TO CREATE OUR OWN
TECHNOLOGY. THERE'S GOT TO BE
OTHER THINGS THAT WE CAN USE AND
PUT OUR OWN DATA INTO. THAT'S
WHAT THAT'S REALLY THE POINT. I
WAS ON THE MODEL PIECE ON THE
MODELS. ABSOLUTELY OUR STAFF ARE
LOOKING AT ALL THE MODELS THAT
ARE AVAILABLE WERE ACTUALLY
PARTNERING WITH AH, DIFFERENT
UCS, ANOTHER AND OTHER MEMBERS
OF ACADEMIA TO MAKE SURE THAT
WE'RE ALL ASSESSING ALL THESE
DIFFERENT MODELS AGAIN, SHOWING
THAT WE KNOW WHAT THE DATA IS
GOING IN. THAT'S REFLECTING. UH
YOU KNOW, THE CALIFORNIA
TOPOGRAPHY LANDSCAPE WHEN YOU
KNOW WHEN THE SINO WINS, FOR
EXAMPLE, SO WE'RE WORKING WITH
WITH EXISTING MODELERS AS WE'RE
WORKING ON GETTING TO DO A
PUBLIC, UH, MODEL ONE DAY SO
THAT WE CAN USE AS A BENCHMARK.
SO AND WITH REGARDS TO
REINSURANCE. NOW MY
UNDERSTANDING IS THAT
REINSURANCE MARKET IN GENERAL IS
MORE GLOBAL. ABSOLUTELY AND SO
WE'RE LOOKING AT A CALIFORNIA
POTENTIAL CALIFORNIA ONLY
REINSURANCE, UM IS HOW IS THAT
POTENTIALLY. MORE EXPENSIVE
INITIALLY, OR IS IT GOING TO
LEVEL OUT OF OUR TIME? WHAT IS
WHAT IS THE POTENTIAL OR DO WE
EVEN KNOW AT THIS POINT BECAUSE
IT'S A GREAT QUESTION. IT'S UH
SO AS YOU KNOW, REINSURANCE IS
WHAT, UM, INSURANCE COMPANIES
BUY TO COVER THEIR RISK AND IT
WITH CLIMATE CHANGE ALL OVER THE
WORLD REINSURERS. IT'S GETTING
MUCH MORE EXPENSIVE. SO AS WE
MET WITH INSURANCE COMPANIES AND
INSURANCE GROUPS, THAT WAS ONE
OF THE FIRST THINGS THEY POINTED
OUT, ONE IS THE INFLATION. AND
TWO IS REINSURANCE COST. AND AS
AS I MENTIONED BEFORE I AM BEST
HAVE DOWNGRADED 10 OF OUR 12
INSURANCE COMPANIES. NOT BECAUSE
OF THE RISK IN AROUND THE
COUNTRY JUST IN THE RISK THAT
THEY HAVE IN CALIFORNIA. AND SO,
UM, AGAIN, POINTING OUT TO THE
AMOUNT OF REINSURANCE THAT THEY
NEED TO TAKE AND THE COST
REASSURANCES WE CALCULATED EVERY
YEAR. AND IT IS TIED TO THE
GLOBAL MARKET. SO NOT ONLY AM I
NOW TRACKING FIRES AND FLOODS
AND CALIFORNIA NOW I'M LOOKING
AT WHAT'S HAPPENING IN EUROPE,
ASIA AND AFRICA, AUSTRALIA
BECAUSE IT'S ALL TIED TO THIS
MARKET NOW. THE CONVERSATION
I'VE HAD WITH REINSURERS IS LOOK
AS CALIFORNIANS AND THE
CONVERSATIONS I'VE HAD WITH
CONSUMERS ARE OKAY, PAYING FOR
OUR RESCUE. WE KNOW THAT
CALIFORNIA. UM HAS MULTIPLE
CLIMATE CATASTROPHES AND THE
POTENTIAL FOR MORE AS WE'RE NOW
WE'RE LOOKING AT EXTREME HEAT.
SEE LEVEL RISE AND OF COURSE,
INLAND AND COASTAL FLOODING. UM
SO ONE OF THE THINGS WE'VE BEEN
HAVING CONVERSATIONS IS AN AND I
HAVE TO LET ME JUST PACK UP THE
REASON WHY WE HAVEN'T ALLOWED.
UH AS I UNDERSTAND FOR
REINSURANCE IN THE PAST, BECAUSE
WE DIDN'T WANT TO PAY FOR WHAT'S
HAPPENING IN FLORIDA AND TEXAS
AND ILLINOIS AND NEW YORK. BUT
THAT IS NO LONGER SUSTAINABLE
FOR THE LARGEST INSURANCE MARKET
IN THE COUNTRY. WHERE YOU KNOW I
HAVE MY COUNTERPARTS IN OTHER
KIND IN OTHER STATES, SAYING YOU
WERE ESSENTIALLY SUBSIDIZING
CALIFORNIA BY NOT ALLOWING YOU
ARE TO ALSO INCLUDE YOUR RATES,
SO I MET THEM HALFWAY. I TALKED
TO INSURANCE REINSURANCE AND
SAID GIVEN THAT WERE THE LARGEST
MARKET IN THE COUNTRY, FOURTH IN
THE WORLD. IS THERE A FORMULA
THAT WE CAN WORK ON? THAT IS
CALIFORNIA. ONLY REINSURANCE IS
GONNA BE THE TOUGHEST PART FOR
US AS PART OF THIS THIS
AGREEMENT THEY'VE ALL COME BACK
AND SAID THERE'S ABSOLUTELY
SOMETHING WE CAN DO THAT WE'RE
GONNA TEST OUT AND WE'RE GONNA
AGAIN. THIS IS GOING TO BE DONE
THROUGH A PUBLIC FORUM TO MAKE
SURE THAT WE'RE HAVING THESE
DISCUSSIONS AND WHAT FORMULA
WOULD LOOK LIKE THAT TAKES INTO
ACCOUNT CALIFORNIA ONLY
REINSURANCE BECAUSE YOU KNOW, WE
NEED TO TAKE RESPONSIBILITY FOR
WHAT'S HAPPENING FOR US TO US IN
CALIFORNIA AND PAY FOR THAT
APPROPRIATE PRICE. THAT IS GOING
TO BE I GUARANTEE YOU THAT ONE
OF THE TOUGHEST THINGS THAT WE
DO, AND WE'RE COMMITTED TO
GETTING IT DONE BY 2024 IN
DECEMBER, AND SO IT'S ALL HANDS
ON DECK FOR US. THANK YOU.
ANOTHER FINAL 1 MAY BE THE
HARDEST QUESTION OF ALL, AND I
APOLOGIZE FOR THAT. BUT NOT
REALLY. UH WHAT DO I TELL? WHAT
DO WE TELL OUR CONSTITUENTS THE
PEOPLE THAT ARE BEING CANCELED
NOW BEING FORCED ONTO THE FAIR
PLAN. I KNOW WHAT I CAN TELL
THEM. I HAVE MORE KNOWLEDGE TO
DO THIS. COMMITTEE MEMBERS HAVE
MORE KNOWLEDGE THAN THE AVERAGE
PERSON, OBVIOUSLY, UM, BUT
THEY'RE FEELING THIS. THEY WANT
TO KNOW. WHEN WILL ARE WE
POTENTIALLY GOING TO SEE SOME
RELIEF. A RANGE OF PERIOD IS
THAT A YEAR IS THAT TWO YEARS IS
A FIVE YEARS. AH, BECAUSE THEY
HAVE TO PLAN THEIR LIVES OUT TO.
ABSOLUTELY AND THIS IS THIS IS
THE NUMBER ONE QUESTION I GET
FROM EVERY SINGLE TOWN HALL THAT
I'VE HAD AND EVERY COUNTY IN
CALIFORNIA. AH IT'S ONE. I WANT
CERTAINTY. SO IF I'M GONNA PAY
MORE, I WANT TO BE ABLE TO
BUDGET THAT AND MAKE SURE THAT I
CAN HAVE MY BUSINESS AND MY HOME
COVERED. TWO IN THE FAIR PLAN.
I'M PAYING MORE AND GETTING
LESS, SO I NEED TO GET OUT AS
QUICKLY AS POSSIBLE AND 31. ARE
WE GOING TO SEE RATES STABILIZE?
SO I SAY TWO THINGS. ONE YOU'RE
GOING TO START SEEING. HOPEFULLY
BY THE BEGINNING OF NEXT YEAR,
SOME OF THESE INSURANCE
COMPANIES, HOPEFULLY STARTING TO
WRITE NEW BUSINESS AS WE'RE
EXPEDITING AND REALLY WORKING
HARD TO FINISH THESE RATES
APPLICATIONS AS MORE PEOPLE ARE
COMING IN IN THE DEPARTMENT TO
HELP US TWO. YOU'RE GOING TO SEE
THAT JUST THE MARKET SIGNAL OF
US WORKING ON THESE TWO
COMPONENTS IS ALREADY, UM,
SENDING THE SIGNAL THAT
CALIFORNIA'S GONNA MODERNIZE
FINALLY THEIR MARKET. NOBODY
WANTS TO LEAVE CALIFORNIA, WHERE
THE LARGEST MARKET BUT IT'S
BECOME TO THE POINT BECAUSE IT'S
SO ARCHAIC WITH THESE RULES THAT
PEOPLE ARE NOW YOU KNOW, BACK IN
THE DAY WHEN, YEAH, IT WAS ONE
CATASTROPHE AND SO FORTH, BUT
NOT WHEN YOU HAVE MULTIPLE
CATASTROPHES, PARTICULARLY SINCE
2017 AND THEN YOU HAVE AN
INCREASING AMOUNT OF REINSURANCE
TO COVER THE CATASTROPHIC
LOSSES. WHAT HAPPENED WERE
HAPPENING AROUND THE WORLD. AND
THE FACT THAT, UM WE WERE. WE
WERE PROHIBITING THESE THINGS
AND, UH, INFLATION RIGHT? THE
COST HAS GONE UP FOR EVERYTHING,
WHICH MANY OF THE INSURANCE
COMPANIES WEREN'T ACCOUNTING
FOR, AND SO I'LL TELL YOU YOUR
CONSTITUENTS THAT HOPEFULLY WE
START SEEING SOME SOME RELIEF BY
NEXT YEAR AS WE LOOK AT THESE
RATES, UH AND THAT I WOULD SAY,
BUT HOPEFULLY 2025 WE START
SEEING SOME SORT OF THE MARKET
FIXING ITSELF. AND SO THAT'S
THAT'S DEFINITELY MY HOPE.
GREAT. WELL, THANK YOU VERY
MUCH. I APPRECIATE APPRECIATE
THIS. AND I, UM I WILL REITERATE
WHAT VICE CHAIR IS, SALIH SAID.
IS THAT AS YOU MOVE FORWARD. IF
THERE ARE THINGS THE LEGISLATURE
CAN DO TO HELP EXPEDITE THIS
PROCESS. I THINK YOU HAVE A YOU
HAVE AN EAGER GROUP HERE THAT
WOULD BE WILLING TO STEP IN AS
MUCH AS WE CAN. WE WILL AND WE
ARE IN CONSTANT CONTACT WITH
CHAIRWOMAN LISA CALDERON TO MAKE
SURE THAT WE IF THERE'S WAYS WE
CAN MOVE QUICKER THAT WE WILL SO
I JUST HAVE A COUPLE OF
QUESTIONS, COMMISSIONER AND
AGAIN THANK YOU FOR BEING HERE
TODAY. WE WERE GREATLY
APPRECIATE IT. SO, UM OKAY. IF
THE CALIFORNIA ONLY UM COST OF
REINSURANCE IS POSSIBLE, UM DO
YOU HAVE ANY IDEA OF THE
TIMELINE OF HOW THAT MIGHT
UNFOLD? THE GOAL IS FOR ALL
THESE CHANGES ASSEMBLYWOMAN AS
WE WERE NEGOTIATING THROUGH THE
LEGISLATURE IS THAT THIS GETS
ALL OF THESE RAGS GET DONE BY
THE END OF DECEMBER. 2024 THAT'S
OUR ULTIMATE DEADLINE. UM, WE'VE
HAD SOME INDICATION FROM OUR
STAFF THAT SOME OF THESE
REGULATIONS CAN GET DONE QUICKER
AND WE CAN SUBMIT THOSE TWO OH,
L AND THEY ALSO KNOW THAT WE'RE
TRYING TO GET THIS DONE BY 2024
IN DECEMBER, SO YOU'RE GONNA SEE
AS SOON AS WE'RE DONE WITH THE
REGULATION WITH THE THAT THE
PUBLIC PROCESS THAT WE GET INPUT
AS WE, YOU KNOW, RIGHTFULLY BY
LAW, WE HAVE TO ADHERE TO ALL
THESE, UH, DIFFERENT, UM, OPEN
PUBLIC MEETINGS, WHICH ARE
GETTING, UM THAT AS THEY BEGIN
AS WE WRAP THIS UP WITH SOME
METALS AS QUICKLY AS POSSIBLE.
EVERYBODY IN MY DEPARTMENT KNOWS
THAT. YOU KNOW, WE'VE COMMITTED
TO THE LEGISLATURE TO THE PUBLIC
TO GET THIS DONE BY DECEMBER
2024. SO THIS COMPONENT ALSO IS
PART OF THAT. OKAY THANK YOU.
AND THEN, UM, YOU MENTIONED, UM,
INTERVENERS PROCESS AND YOU KNOW
THAT IS SUCH AN IMPORTANT PART
OF THIS PROCESS. AND BUT YOU
SAID SOMETHING THAT KIND OF, UM
PIQUED MY INTEREST ABOUT BEING
HELD HOSTAGE. UM. BY INTERVENERS
DURING THE PROCESS. CAN YOU TALK
A LITTLE BIT ABOUT THAT? AND
MAYBE GIVE ME AN EXAMPLE I WOULD
SAY IN THE PAST, I'M VERY PROUD
OF THE FACT THAT OUR SPECIAL
COUNSEL IS WORKING VERY
DILIGENTLY TO MAKE SURE THAT WE
HOLD EVERYBODY ACCOUNTABLE,
RIGHT? BUT IF YOUR INSURANCE
COMPANY AND YOU HAVEN'T, UH, YOU
HAVEN'T, UH, AN UNCOMPLETED RATE
FILING. THAT WE HOLD YOU TO
ACCOUNT. THAT IF YOU'RE
INTERVENER AND YOU WANT TO
INTERVENE, THAT MEANS YOU'RE
READY TO INTERVENE. THEY WON AND
WE'RE NO LONGER GOING TO ALLOW
YOU TO JUST PERPETUALLY HOLD
THIS RATE FILING UNTIL YOU'RE
READY TO NEGOTIATE AND BE PART
OF THE THREE PARTY PROCESS WHICH
IS IMPORTANT RIGHT? BECAUSE WE
WANT INTERVENERS TO BE PART OF
THE PROCESS, BUT WE CAN'T HAVE
THE DEPARTMENT HELD HOSTAGE THE
POINT WHERE THE RATE BY THE TIME
IT'S APPROVED, IT NO LONGER
MEETS THE APPROPRIATE RISK,
WHICH WE'VE SEEN HAPPEN YEAR
AFTER YEAR AFTER YEAR, AND SO WE
NEED TO TIGHTEN UP THAT PROCESS
WHICH WERE COMMITTED TO DOING
AGAIN. THIS WAS ANOTHER PART OF
THE STRATEGY THAT CAME FROM MY
DEPARTMENT SPECIFICALLY. THAT
SAID, WAIT A MINUTE. WE NEED TO
TAKE CONTROL BACK AS A
DEPARTMENT. WE ARE THE EXPERTS
AND IF AN INTERVENER IS READY TO
INTERVENE IN THE FILE THAT
THEY'RE READY, DAY ONE AND THAT
WE START THAT IMPORTANT PROCESS
IF YOU'RE AN INSURANCE COMPANY
THAT SUBMITS A RAY FILE THAT
BETTER BE COMPLETE, BECAUSE
WE'RE NOT GOING TO WASTE OUR
TIME ANYMORE. SO EITHER. YOU
KNOW, IT WAS WE WERE GETTING WE
WERE GETTING ESSENTIALLY HELD
HOSTAGE BY THE INTERVENER AND BY
THE INSURANCE COMPANY WITH THESE
INCOMPLETE RATE FILES, AND THEN
BY THE WAY, WHO WOULD GET BEAT
UP IN THE MEDIA WAS THE
DEPARTMENT OF INSURANCE FOR YOU
KNOW, NOT APPROVING. THESE FILES
ARE FOR TAKING FOREVER. SO NOW
WE ARE CREATING A VERY, VERY
TIGHT AND DELIBERATIVE PROCESS
AND MOST IMPORTANTLY, WHAT YOU
WERE SEEING WITH SOME OF THE
INTERVENERS WAS THEY WERE JUST
SIMPLY COPY AND PASTE ALREADY
OUR OBJECTIONS AND SAYING OKAY,
WELL, NOW THESE ARE OBJECTIONS
AS WELL. NO IF YOU IF WE HAVE,
IF OUR EXPERTS THE DEPARTMENT
HAVE IDENTIFIED THESE OBJECTIONS
, THEN WE'RE GOING TO NEGOTIATE
WITH THE INSURANCE COMPANIES,
AND THE INTERVENER HAS TO BRING
NEW OBJECTIONS SO THAT WE'RE ALL
BEING FAIR IN THE PROCESS. THANK
YOU. UM DO YOU HAVE ANY
QUESTIONS? I JUST MAYBE FOR ALL
OUR EDUCATION. HOW DOES THE
INTERVENER GET PAID? I'M GOING
TO HAVE. STAFF JUMPING ON THIS.
THIS IS THE ONE THING I WOULDN'T
WANT. I DO NOT WANT TO MESS UP.
THINK I THINK IT'S IMPORTANT
THAT THE PUBLIC UNDERSTANDS AND
WE SAY, INTERVENER, IT'S ONE LAW
FIRM. THAT DRAFTED PROP 103
THAT'S CREATED A PERMANENT
SOURCE OF INCOME FOR THEM IN
PERPETUITY. REMEMBER, I'LL HAVE
A LUCY FROM MY SPECIAL COUNSEL
WHO'S OUR INTERVENER EXPERT.
EXPLAIN TO YOU HOW THEY GET
PAID. PLEASE TELL US HOW THEY
GET PAID. SO GOOD AFTERNOON VICE
CHAIR. SO PROPOSITION 103 ALLOWS
THE INTERVENER PROCESS AND WHAT
HAPPENS IS AFTER A PETITION FOR
INTERVENTION IS FILED AND IT
GETS GRANTED. THEY PARTICIPATE
IN THE PROCESS, AND IN THE END
OF IT, THEY FILE A REQUEST FOR
COMPENSATION SO LONG AS THEY'VE
SHOWN. COULD YOU SPEAK THIS A
LITTLE BIT LOUDER? I'M SORRY.
THANK YOU. SO ONCE AN INTERVENER
PARTICIPATES IN THE PROCESS OF
INTERVENTION AND PARTICIPATES IN
A RATE APPLICATION. AT THE END
OF THAT PROCESS, THEY HAVE A
RIGHT TO FILE A REQUEST FOR
COMPENSATION TO THE EXTENT THAT
THEY HAVE SHOWN THAT THEY HAVE
MADE A SUBSTANTIAL CONTRIBUTION
IN THE RATE APPLICATION. THEN
THEY SUBMIT THE REQUEST FOR
COMPENSATION AND THEY'RE PAID
FOR THAT. WHO WHO PAYS THEM?
THAT IS PAID FOR BY THE
INSURANCE COMPANIES, SO IT'S
ANOTHER COST. THAT'S THAT'S
ADDED TO THE INSURANCE COMPANIES
AND WHO DETERMINES IF THEY
PROVIDED VALUES THAT A JUDGE OR
THE ADMINISTRATIVE LAW JUDGE,
THE ADMINISTRATIVE LIKE CHURCH.
OFTEN ARE THESE THINGS SETTLED
OR THEY ALWAYS GO TO A
DETERMINATION. WHAT DO YOU MEAN
BY SETTLE? USUALLY, THE REQUESTS
ARE SUPPORTED TO THE EXTENT THAT
ADDITIONAL INFORMATION IS NEEDED
. THE A O. J WILL REQUEST
ADDITIONAL INFORMATION AND SO
THEY EVENTUALLY REACH. YOU KNOW
A RESOLUTION IN TERMS OF EITHER
THE AMOUNT IS JUST THAT'S
REQUEST IS UPHELD, OR, YOU KNOW,
A SEPARATE AMOUNT IS GIVEN. OKAY
AND WHEN YOU SAY INTERVENERS,
YOU'RE REALLY JUST MEAN
INTERVENER. THERE'S ONE ONLY ONE
LAW FIRM THAT'S ALLOWED TO
INTERVENE. IS THAT CORRECT?
WELL, THERE'S. USUALLY ONLY
THERE'S ONLY BEEN ONE INTERVENER
, YOU KNOW WHO PART WHO IS
PRIMARILY INTERVENES IN RATE
FILINGS BEFORE THE DEPARTMENT.
THEY'RE THE ONLY ONES ALLOWED TO
I GUESS, MY JUST MY LAST
QUESTION TO THE COMMISSION. DO
YOU THINK YOU NEED AN INTERVENER
TO HELP YOU DO YOUR JOB? I THINK
INTERVENERS PAY UP PLAY A VERY,
VERY PIVOTAL, ESPECIALLY WHEN WE
ACTUALLY WORKED TOGETHER TO
ACTUALLY ADDRESS A SPECIFIC RATE
FILE. THAT'S SOME OFTEN WE DO
YOU KNOW, WE WORK WELL WITH THEM
. UM THE PROBLEM IS THAT WE NEED
TO DIVERSIFY. INTERVENERS IT
JUST CAN'T BE 80 OR 90% OF
INTERVENERS. JUST BE ONE ENTITY.
IT IS AN IMPORTANT PROCESS THAT
I PROUDLY DEFEND, BUT I THINK WE
NEED TO DO A BETTER JOB OF WHY
ARE OTHER NONPROFITS NOT BEING
I'M NOT PARTICIPATING IN THE
PROCESS. ESPECIALLY FOR US
PEOPLE THAT LOOK LIKE YOU AND I
PEOPLE THAT COME FROM OUR
WORKING CLASS COMMUNITIES THAT
ARE EXPERIENCING, YOU KNOW THE
HARDSHIP. UM AND SO WE'RE
LOOKING AT ALSO, HOW DO WE
INCENTIVIZE OTHER INTERVENERS TO
BE PART OF THE PROCESS THAT PLAY
AN IMPORTANT ROLE? UM AND SO,
YOU KNOW, IT SHOULDN'T JUST BE
ONE ORGANIZATION. AND IT JUST
HAPPENS TO BE THE ORGANIZATION
THAT WROTE THE RULES THAT YOU
KNOW MAKES MILLIONS OFF OF IT
THAT AS YOU POINT ME, AS YOU
RIGHTFULLY POINT OUT, EVENTUALLY
GETS PASSED ON ALSO TO THE
CONSUMER, RIGHT. SO YOU'RE
LOOKING AT SOME LIKE RAGS TO
ADDRESS THIS, AND WITH THOSE
HAVE TO GO BACK TO THE VOTERS,
OR WE'RE LOOKING AT WHAT THOSE
OPTIONS ARE AS WELL. WELL LET US
KNOW. I KNOW FOR ME. I WOULD
SUPPORT THOSE. SO THANK YOU.
SIMILAR MEMBER VALENCIA. THANK
YOU, MADAM CHAIR AND GOOD
AFTERNOON, COMMISSIONER HOPE ALL
IS WELL WITH YOU AND THE
HOLIDAYS ARE TREATING YOU. WELL,
THANK YOU. I THINK WE ALSO NEED
TO ASK JUST A VERY FRANK
QUESTION ABOUT. THE STATE THAT
WE'RE IN AND WHAT'S TO BE
EXPECTED IN THIS TRANSITION TO A
MUCH BETTER INSURANCE CLIMATE
HERE IN THE STATE OF CALIFORNIA
IN YOUR ASSESSMENT, DO YOU THINK
THAT RATES WILL INCREASE? DO YOU
THINK THE SITUATION WILL WORSEN
MOVING FORWARD? AND IF SO, UH
HAVE WE DISCUSSED OR PLANNED ANY
POTENTIAL? SOFTENING FOR
CONSUMERS, RIGHT WHETHER IT'S
PAYMENT PLAN SYSTEMS OR CHEERED
IMPLEMENTATION OF THESE NEW
RATES. ANYTHING ALONG THOSE
LINES. THANK YOU. ASSEMBLE
VALENCIA. YOUR QUESTIONS. JUST
QUESTIONS WELL TAKEN. I'LL TELL
YOU THAT I CAN. UM UH,
CONFIDENTLY SAY THAT WE'RE NOT
MOVING IN THE DIRECTION OF
FLORIDA, FOR EXAMPLE, AND BY THE
WAY I DON'T LIKE TO COMPARE US
TO OTHER STATES BECAUSE I KNOW
HOW HARD IT IS FOR MY FELLOW
INSURANCE COMMISSIONERS IN THOSE
STATES, FLORIDA, TEXAS, HAWAII
WHO JUST PASSED US AS A LARGE
WITH THE LARGEST FIRES, WE'RE
ALL GOING THROUGH THIS AS A AS A
COUNTRY AND THE TERRITORIES, BUT
I CAN TELL YOU THAT, UM THESE
THIS AGREEMENT, AND YOU KNOW, I
HAVE TO ALSO KNOW THAT I WANT TO
THANK MY STAFF. UH, FOR THE FACT
THAT THE CONVERSATIONS THAT
WE'VE HAD WITH THE INDUSTRY
WOULD HAVE NEVER HAPPENED IN THE
PAST. WE CONTINUE TO BE VILIFIED
BECAUSE WE'RE ACTUALLY HAVING
CONVERSATIONS WITH THE ENTITY
THAT WE REGULATE, WHICH MAKES NO
SENSE TO ME. WE SHOULD BE
TALKING TO THE ENTITY THAT WE
REGULATE. AND SO THIS IS WHY
THIS AGREEMENT CAME ABOUT
BECAUSE LOOK YOU TOLD US WHAT
YOU NEEDED TO STAY IN BUSINESS
IN CALIFORNIA. AGAIN I DON'T
THINK THERE'S ONE INSURANCE
COMPANY THAT WILL TELL YOU THEY
WANT TO LEAVE THE LARGEST
INSURANCE MARKET IN THE COUNTRY,
FOURTH IN THE WORLD. BUT WE ALSO
NEED SOME GUARANTEES FOR THE
CONSUMER THAT WE'RE GOING TO BE
ABLE TO FIND INSURANCE IN OUR
WILDFIRE, DISTRESSED AREAS AND
THAT WE'RE GOING TO PAY FOR OUR
RISK THAT WE TAKE ON FOR LIVING
IN THE STATE AND PROP. ONE OR
THREE GIVES US THE TOOLS AND THE
AUTHORITY TO MAKE SURE THAT WE
GET THAT DONE. THAT IS THE
BEAUTY ABOUT THAT PROPOSITION.
THE OTHER THING IS THAT WE NEED
TO MODERNIZE. WE CAN OPERATE
UNDER OUTDATED REGULATIONS THAT
NO NO LONGER REFLECT THE RISK
THAT WE'RE LIVING IN. AND SO
I'LL TELL YOU THAT JUST EVEN THE
SIGNALS THAT WE'RE SENDING THAT
WE'RE GOING TO MAKE SOME MASSIVE
CHANGES THAT WE NEED TO MAKE IS
ALREADY HAVING A VERY POSITIVE
CHANGES IN THE OUTLOOK OF
INSURANCE COMPANIES, UH, LOOKING
AT US AGAIN. YOU'RE GONNA SEE
NEXT YEAR. HOPEFULLY SOME
BALANCING OUT OF THE MARKET. FOR
THE TIME BEING. AS I SAID
EARLIER. I'M NOT GONNA LIE. YOU
KNOW, IT'S GONNA STILL BE
EXPENSIVE BECAUSE WE'RE NEVER
GOING TO GET TO AFFORDABILITY OF
REMEMBER IF WE DON'T HAVE
AVAILABILITY. IF INSURANCE
COMPANIES KEEP EXITING THE
MARKET OR CONTRACTING THEIR
FOOTPRINT, WE'RE NEVER GOING TO
GET TO AVAILABILITY TO
AFFORDABILITY. SO THAT IS THE
FIRST ACTION OF THIS PLAN IS TO
GET INSURANCE TO WRITE BACK TO
WRITE IN THE IN THESE
COMMUNITIES, AND SO, UM IT'S
GONNA BE TOUGH. I WOULDN'T SAY
FOR THE NEXT COUPLE OF MONTHS,
BUT HOPEFULLY YOU'RE GOING TO
START SEEING THE MARKET. START
STABILIZING ITSELF. I KNOW IT'S
NOT WHAT YOU WANT TO HEAR, BUT I
ALSO DON'T WANNA, YOU KNOW, I
DON'T WANT TO SUGARCOAT THAT WE
ARE LIVING IN UNPRECEDENTED
TIMES ACTUALLY APPRECIATE THAT
CANDID RESPONSE AND TO YOUR
POINT EARLIER ABOUT TRANSPARENCY
AND ENSURING THAT WE'RE HAVING
PUBLIC MEETINGS THROUGHOUT THIS
WHOLE PROCESS. I THINK IT'S OF
THE UTMOST IMPORTANCE THAT WE'RE
AT LEAST FORWARD GOING INTO THIS
NEXT PHASE SO THAT FOLKS
UNDERSTAND THAT IT IS GOING TO
BE DIFFICULT AND THERE IS NO
OTHER WAY AROUND THIS AT LEAST
NOTHING THAT WE'RE AWARE THAT
THIS TIME, SO THANK YOU FOR
THAT. THANK YOU. UM YES, THANK
YOU. I JUST CAN'T LET THEM FALL,
I GUESS. I WOULD EXPECT THAT
THINGS ARE ACTUALLY MAY GET
WORSE BEFORE THEY GET BETTER. I
HOPE NOT. BUT BUT BUT. IF I KNEW
THAT AS AS WE AS WE AS WE GO
FORWARD, AND THAT THERE IS SORT
OF LIGHT AT THE AT THE END OF
THE HORIZON THAT THAT THAT THAT
IT WOULD BE WORTH IT. YOU KNOW,
TO KNOW THAT THERE THERE THERE
MAY BE SOME GROWING PAINS, I
GUESS IS WHAT I'M LOOKING AT
THINKING ABOUT SO UM MEMBER. I
WOULD TELL YOU THAT, UM MY
BIGGEST FEAR IS THAT WE HAVE
ANOTHER 2017 OR 2018 MINE, TOO.
SUNRAIL'S UNRAVELS DISAGREEMENT
AND SO, UM, BUT I'LL TELL YOU, I
DON'T THINK IT'S GOING TO GET. I
DON'T THINK IT'S GONNA GET
WORSE. I THINK JUST BY, YOU KNOW
AS WE KNOW THAT IN BUSINESS, UM
PEOPLE NEED CERTAINTY, AND THEY
NEED TO KNOW THAT WE'RE MOVING
IN THE RIGHT DIRECTION. AND I
CAN'T TELL YOU HOW THAT'S EVEN
THE CONVERSATIONS WE'RE HAVING
HAVE IMPROVED. OUR OUR
OPPORTUNITY TO BE ABLE TO KEEP
AND MAINTAIN INSURANCE GROWING
AND YOU CAN ASK THE INSURANCE
COMPANIES OURSELF, UM, THAT
THESE CHANGES THAT THEY'VE BEEN
REQUESTING FOR YEARS ARE FINALLY
GOING TO HAPPEN. THAT AT LEAST
GIVES THEM AN OPPORTUNITY TO SAY
HARRY INSURANCE COMPANY LOOK AT
WHAT'S HAPPENING IN CALIFORNIA.
HOW YOU HOW YOU, UH, SCHEDULE
THE AMOUNT OF GROWTH GROWTH
YOU'RE GOING TO TAKE. AT LEAST
THAT IS ENOUGH TO START SAYING
OKAY, WE CAN. WE CAN START
LOOKING AGAIN AND HOW WE NOT
ONLY REINVEST IN CALIFORNIA
ABOUT HOW WE GROW, AND SO I'M
NOT THAT PESSIMIST YET. BUT, YOU
KNOW, I ALSO KNOW THAT YOU LIVE
IN THESE COMMUNITIES WHERE YOU
HEAR THIS EVERY SINGLE DAY, AND
SO I APPRECIATE THAT
PERSPECTIVE. AND THEN JUST A
FINAL. UM, AS I DON'T IF I IF I
IF YOU SAID IT, AND I MISSED IT.
I APOLOGIZE BECAUSE MR MR SALEY
ASKED ABOUT, UM, WILL WE HAVE
WELL, YOU HAVE TO. WE HAVE TO GO
BACK TO THE VOTERS TO CHANGE THE
INTERVENER PROCESS. THE IDEA
THAT A SINGLE ENTITY REALLY
CONTROLS THIS. I CAN'T IMAGINE
THEY'RE GOING TO WANT TO GIVE UP
THAT BOOK OF BUSINESS. AH
WILLINGLY AS YOU GO TO REFORM
THE PROCESS TO MAKE IT MORE
FAIR, MORE TRANSPARENT FOR
PEOPLE. SO IF I MISSED IT, I
APOLOGIZE. BUT DO YOU SEE THAT
THE DEPARTMENT CAN ACTUALLY
CREATE REGULATIONS TO OPEN THAT
UP TO A BROADER, BROADER MORE
REPRESENTATIVE, UH, GROUP RATHER
THAN A SINGLE ENTITY. AS WE SEE
NOW, IT'S ALL GOING TO REALLY
DEPEND ON HOW WE MOVE AND WHAT
THE AREAS OF REFORMS THAT WE'RE
LOOKING AT. BUT IN GENERAL HAVE
LUCY WANG, BY THE WAY, JUST FOR
THE RECORD, MY SPECIAL COUNSEL.
I THINK THAT'S AN INTERESTING
QUESTION. I DON'T THINK WE NEED
TO GO BACK TO THE VOTERS WITH
REGARD TO THE INTERVENER PROCESS
. I THINK WHAT THE COMMISSIONER
SPEAKS OF IN TERMS OF, UM
MOTIVATING AND CREATING A MORE
DIVERSE GROUP OF INTERVENERS.
THAT'S SOMETHING THAT THE
DEPARTMENT CAN DO WITHIN ITS
EXISTING AUTHORITY NOW. AND ONE
OF THE REFORMS THAT WE'VE
ALREADY IMPLEMENTED. JUST SO YOU
ALL KNOW IS THAT WE'RE BEING
VERY MUCH, MUCH MORE TRANSPARENT
WITH WHO THESE INTERVENERS ARE.
HOW MUCH MONEY HAVE THEY
COLLECTED? UM WHO ARE THEY
RAISING MONEY FROM, AND THAT'S
ALREADY AVAILABLE, WHICH, BY THE
WAY, WAS NOT AVAILABLE. UM IN,
UH, BEFORE THROUGH OUR WEBSITE,
SO WE ARE. WE ARE MAKING THAT
MUCH MORE AVAILABLE FOR ALL OF
YOU. YOU ALL HAVE ASKED. MANY OF
YOUR COLLEAGUES HAVE ASKED ME TO
MAKE THAT AVAILABLE. AND SO WE
WE'VE MADE THAT AVAILABLE
THROUGH OUR WEBSITE AND A MUCH
EASIER WAY. GOOD AFTERNOON.
MICHAEL MARTINEZ, CHIEF DEPUTY
COMMISSIONER, AND I JUST WANTED
TO ADD TO WHAT THE COMMISSIONER
MY COLLEAGUE HAD STATED. IS THAT
ABSOLUTELY UNDER EXISTING LAW,
WE CAN CONTINUE TO WORK TO
EXPAND THE INTERVIEW PROCESS.
THE DEPARTMENT ACTUALLY HAS
PREVIOUSLY OUTREACH TO A VARIETY
OF NONPROFIT ORGANIZATIONS TO
ENCOURAGE THEM TO BECOME
INTERVENERS. AND WE DO, UH,
INVITE INDIVIDUALS TO WHAT HAS
BEEN ONE MAJOR, UM, CHALLENGE IS
THAT TO BE AN INTERVENER IN IN
THESE RAPE VIOLENCE, AS YOU CAN
IMAGINE, THERE'S A LOT OF
DETAIL. THERE'S A LOT OF WORK
THAT HAS TO BE DONE BY ANALYSTS.
AS WELL AS ACTUARIES. AND A LOT
OF THAT THAT STAFFING IF YOU
WILL DOES ENTAIL A SIGNIFICANT
AMOUNT OF INVESTMENT THAT AN
ORGANIZATION NEEDS TO PUT UP AND
PUT INTO IN ORDER TO THEN, AS WE
TALKED ABOUT EARLIER IN THIS IN
IN OUR RESPONSES, THE BACK AND
FORTH THE COMMITTEE IS THAT THEN
THEY HAVE TO THEN APPLY FOR
COMPENSATION, WHICH THEY RETURN.
IN TURN, GO TO YOU GO THROUGH
THE MAJOR PROCESS OR IN OTHER
WORDS. THEY HAVE TO GO OUT, FIND
THE STAFF WHETHER IN HOUSE OR
CONTRACT EXPEND THE RESOURCES UP
FRONT TO THEN PERHAPS, MAYBE
MAYBE NOT GET THE COMPENSATION
TO IN TURN PAYBACK THOSE STAFF,
SO THERE'S A SIGNIFICANT AMOUNT
OF INVESTMENT THAT MUST GO IN
THAT WE HAVE FOUND TO BE ONE OF
THE MAJOR CHALLENGES IN ORDER
FOR INDIVIDUALS, INDIVIDUAL
ORGANIZATIONS TO GET MORE
INVOLVED IN THE INTERVENER
PROCESS. SO IT SOUNDS A LITTLE
LIKE AN ATTORNEY TAKING A CASE
ON A CONTINGENCY, EXACTLY, YES.
FAIR POINT KIND OF THE THINGS
THAT WE'RE LOOKING AT. REFORMING
HOW DO WE REFORM THE PROCESS TO
ALLOW TO GIVE SOME OF THESE
NONPROFITS UPFRONT THE RESOURCES
THEY NEED TO BE ABLE TO HAVE THE
RESOURCES TO ACTUALLY INTERVENE
AND BE PART OF THE PROCESS. IF I
IF I MAY ASK, UM, DEPUTY
COMMISSIONER, WHAT YOU'RE
DESCRIBING IS A PROCESS TO, UM,
HAVE MORE. LET'S CALL THEM.
INTERVENER FIRMS RIGHT, SO IT'S
NOT JUST MONOPOLY. UM AND I
THINK IT'S GOOD. UM THERE SHOULD
BE DIVERSITY AND FIRMS SO IT'S
NOT ONE PERSON MAKING IT ALL BUT
I'LL MAKE SURE OR NOT. INVITING
MORE INTERVIEW. WE DON'T WANT
MORE PEOPLE TO INTERVENE. WE
JUST WANT MORE DIVERSITY IN THE
TYPE OF INTERVENERS, SO THEY'RE
GONNA BE OTHER REFORMS IN THERE.
TÔI I JUST DON'T WANT US TO
ENCOURAGE MORE INTERVENTIONS. WE
DON'T NEED MORE INTERVENTIONS.
REMEMBER ME? LET ME ANSWER. LET
ME ANSWER YOU DON'T WANT LIKE A
TEAM OF FIRMS INTERVENING. JUST
THE INTERVENERS PLAY A VERY
CRITICAL AND IMPORTANT PROCESS,
ESPECIALLY ON RAPE FILES THAT
YOU KNOW ARE VERY COMPLICATED
THAT WE OFTEN MAY NOT AGREE WITH
THE INSURANCE COMPANY. AND THEY
PROVIDE YOU KNOW SOMETHING. WE
TEAM UP WITH THE INTERVENER,
OFTEN AGAINST AN INSURANCE
COMPANY AGAIN THAT IF WE HAVE
STRICT TIMELINES AND
INTERVENTION SO THAT WHERE ARE
WORKING UNDER THE SAME SCHEDULE
THAT'S STILL CUTS THE TIME, YOU
KNOW, SO WE'RE NOT. WE'RE NOT.
WE'RE NOT DIMINISHING. THE ROLE
OF THE INTERVENERS, BUT WE CAN
NO LONGER JUST HAVE THE
INTERVENER HAVE AN OPEN DATE AND
UNTIL THEY'RE READY TO NEGOTIATE
THAT, YOU KNOW, THEN WE HAVE THE
THREE PARTY NEGOTIATOR.
OFTENTIMES WE AGREE WITH THE
WITH THE INTERVENER, BUT THEY
NEED TO BE READY TO INTERVENE AS
SOON AS YOU KNOW, DAY ONE AS
PROP ONE OR THREE STATES SO UH,
I WANT TO SEE MORE INTERVENERS
WITH THIS EXPEDITED CALENDAR
THAT WE HAVE AND THE RULES THAT
INTERNALLY WE WANT TO CHANGE.
BECAUSE WE WANT TO SEE
INTERVENERS FROM THE COMMUNITIES
ARE BEING AFFECTED. THERE'S
MULTIPLE INTERVENERS WOULD ARE
YOU ENVISIONING THAT THEN? THE
INSURANCE, UH, COMMISSION WOULD
PICK WHO IS THE GOING TO BE THE
INTERVENER? WOULD THERE BE SOME
PROCESS TO GOOD QUESTION TO PICK
ONE. THAT'S A REALLY GOOD
QUESTION. I MEAN, THAT'S A
PROBLEM WE'D LIKE TO HAVE. WE
HAVEN'T SEEN IT. I MEAN MOST OF
THE TIME WHEN THEY FILE A
PETITION INTERVENE. IT HAS TO BE
GROUNDED IN A BASIS. THEY HAVE
TO EXPLAIN WHY THEY WANT TO
INTERVENE. SO IF PEOPLE JUST
WANT TO BE HEARD, THAT'S NOT
REALLY THE BASIS FOR WHY THE
PETITION WOULD BE GRANTED. SO I
DON'T THINK I CAN'T THINK OF A
SCENARIO WHERE THAT WOULD HAPPEN
. BUT IF WE REALLY HAD THAT
MUCH, YOU KNOW INTEREST IN IT AT
THE DEPARTMENT. WE ALWAYS
WELCOME THAT. I GUESS I'M JUST
I'M CONFUSED BECAUSE I WANT LESS
INTERVENTION. BUT IT SOUNDS LIKE
YOU GUYS LIKE THE INTER
INTERVENERS AND I GUESS FROM MY
STANDPOINT, WHAT ARE THE
INTERVENERS DO THAT YOU CAN'T DO
THAT FROM YOUR DEPARTMENT OR
ACTUALLY, IT'S A TWOFOLD PROCESS
. YOU'RE THINKING ABOUT
INTERVENTION ONLY IN THE AREA OF
RATE APPLICATIONS. INTERVENERS
ALSO PLAY A ROLE WHEN THE
DEPARTMENT CONDUCTS MARKET
CONDUCT EXAMS. AND ISSUE REPORTS
OF NONCOMPLIANCE AND INTERVENERS
PLAY A ROLE THERE IN PROVIDING
INPUT, SO IT IS. IT'S VALUABLE.
I THINK THAT, UM YOU KNOW THE
COMMISSIONER'S GOALS OF
TRANSPARENCY AND PUBLIC INPUT
ARE WELL SUPPORTED BY HAVING THE
PROCESS OF INTERVENTION. IT'S
JUST MAKING SURE THAT EVERYONE,
UM, IS READY TO PARTICIPATE FROM
DAY ONE. MY COMMENTS WERE
DIRECTED AT THE RATE INCREASES.
AYE. I WASN'T AWARE OF THE OTHER
AREAS. VERY INTERESTING. THANK
YOU. I HAVE ONE LAST QUESTION.
YOU MENTIONED THAT YOU DON'T
LIKE TO COMPARE CALIFORNIA'S
INSURANCE MARKET TO ANY OTHER
STATES, BUT, UM, COULD YOU TALK
A LITTLE BIT ABOUT HOW
CALIFORNIA'S INSURANCE RATES
COMPARED TO SOME OF THE OTHER
STATES? THAT'S A GREAT QUESTION,
ASSEMBLYWOMAN. AND YOU KNOW, I
DON'T LIKE TO PLAY THE POLITICS
OF YOU KNOW, CALIFORNIA AGAINST
TEXAS OR FLORIDA? AS AS AS WE'RE
ALL WORKING AS INSURANCE
COMMISSIONERS TO SOLVE OUR
MARKETS, AS YOU KNOW, NOW, WITH
REINSURANCE AS YOU UNDERSTAND
WHAT WE NEED FLORIDA TO SUCCEED.
WE NEED TEXAS TO SUCCEED WHEN
YOU, UH, NEW YORK, HAWAII. UM,
BUT EVEN AS WE'RE WORKING ON
THESE RATE FILES EVEN AFTER THE
RE FILES THAT HAVE BEEN APPROVED
OVER THE YEARS, BY THE WAY,
CALIFORNIA STILL ROUGHLY IN THE
MIDDLE UH AND THAT IS GOOD FOR
THE LARGE STATE THAT WE ARE, UM
AND YOU KNOW, I THINK THAT'S A
GOOD PLACE TO BE IN, BUT I KNOW
THAT THAT IS NOT SOMETHING THAT
YOU KNOW WHEN WE TALK TO OUR
CONSUMERS. THEY WANT TO HEAR
IT'S RATES ARE CHANGING RAPIDLY.
WE'RE GOING TO TRY TO MAKE SURE
THAT WE'RE PAYING AGAIN FOR THE
AMOUNT OF RISK OF WHERE WE LIVE
AND WHO WE ARE AS A STATE AND
THE CATASTROPHES THAT WE, YOU
KNOW THAT WE HAVE AS A STATE,
AND SO I THINK IT'S ALL GONNA
IT'S WE HAVE TO HAVE THAT
SOBERING DISCUSSION WITH WITH
OURSELVES AS CALIFORNIANS. BUT
EVEN THEN, SOME MOMENTS I TELL
YOU THE CONVERSATIONS I'VE HAD
WITH PEOPLE WHO HAVE LOST THEIR
HOME OR IN THE FAIR PLAN. THEY
ALSO WANT CERTAINTY. IF WE'RE
GOING TO, THEY'RE GOING TO
ENSURE THEIR HOME. THEY WANT TO
MAKE SURE THAT ONE THEY'RE NOT
GOING TO GET DROPPED AND THAT
THEIR PRICE IS NOT GOING TO
SKYROCKET THE NEXT YEAR. AND SO
THIS IS WHY WE'RE MAKING THESE
TRANSFORMATIONAL CHANGES TO
PROVIDE CERTAINTY IN THE MARKET
SO THAT PEOPLE CAN BUDGET AND
I'LL TELL YOU PEOPLE, EVEN IN
DECEMBER, WOODS DISTRICT THEY
KNOW THEY'RE LIKE I KNOW WHERE I
LIVE. I PAYING THE PRICE FOR
LIVING IN ONE OF THE MOST
BEAUTIFUL PARTS OF OUR STATE,
BUT ALSO WANT SOME CERTAINTY SO
THAT I'M ABLE TO BUDGET AND BE
ABLE TO HAVE SOME CERTAINTY FOR
OUR FAMILY, AND THAT'S WHAT
INDUSTRY WANTS AS WELL WHICH
THEY HAVEN'T HAD BECAUSE OF
THESE ARCHAIC RULES THAT WE
HAVE. AND BECAUSE OF. NOT
BECAUSE OF NOT BECAUSE OF
DEPARTMENT NOW, UM, STREAMLINING
THIS RATE PROCESS THAT CAN TAKE
YEARS. TOP PROOF. THANKS I THINK
THE LONGER WE SIT HERE, THE MORE
THINGS WE THINK OF. SO THAT'S A
DANGEROUS THING. PROBABLY BUT,
UM, AND BUT THIS IS SOMETHING I
HAVE THOUGHT ABOUT FOR A WHILE.
AND I DON'T EVEN KNOW THAT
YOU'RE THE RIGHT PEOPLE TO ASK.
BUT I'M GOING TO ASK BECAUSE,
UH, WE HAVE A CALIFORNIA
EARTHQUAKE AUTHORITY. FOR
EARTHQUAKE INSURANCE. HAVE
THERE. HAS THERE BEEN ANY
DISCUSSION ABOUT A CALIFORNIA
FIRE INSURANCE AUTHORITY AS AWAY
BECAUSE THAT SEEMS TO BE RIGHT
NOW, ANYWAY. MEANWHILE ALTHOUGH
CAREFUL WHAT YOU WISH FOR, WE
COULD HAVE A CLIMATE CHANGE
AUTHORITY. WE CAN HAVE A WHOLE
VARIETY OF DIFFERENT THINGS
HERE. BUT THAT SEEMS TO BE FOR
LACK OF BETTER WORDS, THE FLASH
POINT RIGHT NOW. THAT'S A GREAT
QUESTION. REMEMBER AND THEN ONE
THAT MANY, MANY CONSUMERS ASK US
AT TOWN HALLS. WHY CAN'T WE
CREATE A PUBLIC AGENCY AND I'LL
TELL YOU AND I'VE BEEN VERY
BLUNT ABOUT THIS. I DO NOT WANT
GOVERNMENT RUNNING AN INSURANCE
COMPANY. AH AFTER THE NORTHRIDGE
EARTHQUAKE HERE IN SOUTHERN
CALIFORNIA. THE LEGISLATURE AT
THE TIME CAME IN TO TRY TO FORCE
INSURANCE COMPANIES TO UM RIGHT
IN THIS COMMUNITY. NOW AS YOU
KNOW, YOU KNOW, MORE THAN THAT
INSURANCE COMPANIES ARE NOT
UTILITIES. THEY'RE NOT OBLIGATED
BY LAW TO RIGHT, NO MATTER WHAT
ANYBODY TELLS YOU, AND THIS HAS
BEEN ALREADY ADJUDICATED IN LAW.
AGAIN WITH FORMER INSURANCE
COMMISSIONER GARAMENDI. UM AND
SO, WHAT HAPPENED? WE WERE LEFT
WITH GOVERNMENT TRYING TO CREATE
THE CALIFORNIA EARTHQUAKE
AUTHORITY THAT'S GOING TO BE THE
NEXT THING THAT THE NEXT THING
THAT I NEED TO WORK ON SO THAT
WE CAN MODERNIZE THE CALIFORNIA
AUTHORITY. THE RATES ARE STILL
HIGH. THE COVERAGE IS STILL, UM,
NOT APPROPRIATE, EVEN THOUGH
THEY HAVE AN AMAZING MITIGATION
PROGRAM BARRED ON LIKE ANYBODY
ELSE, BUT THE UPTAKE IS ONLY 2.
ONLY 2% OF CALIFORNIANS HAVE AN
EARTHQUAKE POLICY. SO IN THE
EAST COAST, SAME THING HAPPENED
WITH HURRICANES. WE WERE LEFT
NOW WITH THE NATIONAL FLOOD
INSURANCE PROGRAM, WHICH YET
STILL HASN'T BEEN MODERNIZED BY
CONGRESS AND IS STILL HEAVILY
DOES NOT MEET THE NEEDS AND
THAT'S ONE OF THE BIG
CONTENTIONS THAT WE HAVE. WITH
THE FEDERAL GOVERNMENT IS TRYING
TO MODERNIZE AND GIVE ADEQUATE
RATES AND THEN SO THAT WE CAN
PENETRATE THE MARKET RIGHT OVER
THE LAST 40 YEARS. EVERY SINGLE
UM EVERY SINGLE COUNTY IN
CALIFORNIA HAS BEEN UNDER A
GOVERNOR DECLARED FLOOD
EMERGENCY AS WE HAVE A BEAUTIFUL
SUNNY DAY TODAY, THAT IS ALSO
ANOTHER THING WE HAVE TO WORRY
ABOUT. YOU SAW WHAT HAPPENED IN
THE COMMUNITY AND TOMORROW. YOU
SEE WHAT HAPPENS IN IMPERIAL
BEACH IN SAN DIEGO? THE KING
TODD COMES IN AND PRETTY MUCH
FLOODS THE ENTIRE DOWNTOWN THERE
, AND WE'RE WORKING ON CLIMATE
SOLUTIONS TO THAT SO THIS IS WHY
WE THE ONE THING WE CAN DO AS
CONSUMERS AS LEGISLATORS, AS THE
INDUSTRY IS TO BRING DOWN THE
RISK. WE ALL AGREE THAT THAT'S
WHAT WE NEED TO DO TO KEEP
INSURERS WRITING IN THESE
COMMUNITIES, AND THAT'S WHY THE
INVESTMENTS YOU ALL HAVE MADE
RECORD INVESTMENTS WITH THE
REGULATIONS THAT WE'VE
IMPLEMENTED. TO INCENTIVIZE
CONSUMERS TO BRING DOWN THE RISK
IS THE SOLUTION AND IT'S GOING
TO SEND THE MARKET SIGNALS TO
THE INSURANCE COMPANIES THAT
WE'RE ALL WORKING ON BRINGING
THIS RISK ONE. WE'RE OPERATING
UNDER THE SAME RULES THAT WE
KNOW WHAT THE TIMELINES ARE
GOING TO BE FOR THE DEPARTMENT
GET THE RATE YOU NEED INTERVENED
OR NOT, THAT THERE'S SOME
CERTAINTY OF WHEN THIS IS GOING
TO HAPPEN, AND THAT THAT
PROVIDES SOME STABILITY IN THE
MARKET THAT WE HAVEN'T HAD IN
YEARS. AND SO, UM AGAIN, WE WANT
TO BE ABLE TO AND THE OTHER
THING, TOO, THAT I HAVE OFTEN
CHECKING. AS I'VE TALKED TO MY
STAFF. WHAT WOULD HAPPEN IF WE
CREATE UH, FIRE WILDFIRE. YOU
KNOW, PUBLIC INSURANCE PROGRAM
WHERE WE PUT THE RISKIEST HOMES
IN ONE RISK POOL. WE WOULD NEVER
HAVE, EVEN IN CALIFORNIA CHALET
AS WE'RE GOING IN TO THIS BUDGET
, WE WOULD NEVER HAVE THE AMOUNT
OF MONEY TO COVER THOSE
CATASTROPHIC LOSSES. THIS IS WHY
YOU NEED MULTIPLE INSURANCE
COMPANIES COVERING THESE AREAS,
ALLOWING THEM TO DEMOCRATIZE
THOSE RATES SO THAT WE'RE ALL AS
CALIFORNIANS. PAYING YOU KNOW
THE RATES THAT WE ADEQUATELY
NEED TO COVER OURSELVES BECAUSE,
AS YOU WELL KNOW, ASSEMBLY
MEMBER IN THE BEGINNING OF THESE
FIRES, SOUTHERN CALIFORNIA
MEMBERS WERE LIKE, WELL, THAT'S
A NORTHERN CALIFORNIA ISSUE.
WELL THAT QUICKLY CHANGED WITH
FIRES IN L, A RIVERSIDE AND SAN
DIEGO. SO WE'RE ALL IN THIS
TOGETHER. THIS ALLOWS THE
INSURANCE COMMISSIONER MYSELF
AND THOSE IN THE FUTURE TO BE
ABLE TO GOOD GO. SHE ATE THOSE,
UH, THOSE RATES LOOKING AT EVERY
THE INSURANCE COMPANIES OVERALL
PORTFOLIO. AND IF THAT MEANS YOU
KNOW THOSE OF US IN DOWNTOWN LOS
ANGELES. NOT TAKE SUCH A SUCH A
BIG DECREASE AND ALLOW YOUR
CONSTITUENTS TO NOT HAVE SUCH A
BIG INCREASE. WE WORK ON THAT
EVERY DAY IN THE DEPARTMENT
THROUGH OUR ANALYSTS ARE
INSURANCE EXPERT AND OUR
ACTUARIES AS A REVIEWING THESE
FILES. IF YOU WANT TO JUST JUST
WANTED TO ADD ABSOLUTELY AGREE
WITH WHAT COMMISSIONER LAGARDE
SAID. I AM HIS PROUD DESIGNATE
ON THE GOVERNING BOARD FOR THE
CALIFORNIA EARTHQUAKE
AUTHORITIES SINCE 2019 AND I
WOULD SAY THE CIA IS THE WORLD'S
LARGEST ONE OF THE WORLD'S
LARGEST PURCHASERS OF
REINSURANCE, GLOBALLY AND
ABSOLUTELY AS WHAT THE
COMMISSIONER HAD SAID OF IF WE
WERE TO LIFT AND SHIFT THE
STATE'S LARGEST, THE MOST HIGH
RISK WILDFIRE IN ONE ENTITY THAT
WOULD HAVE TREMENDOUS FINANCIAL
SOLVENCY ISSUES AS WHAT WE HAVE
BEEN HAVING THE CIA STAFF. THE
BOARD HAS DIRECTED CIA STAFF TO
HAVE VERY ACTIVE, ENGAGED
CONVERSATIONS PUBLICLY. WE'VE
HAD SEVERAL MEETINGS,
STAKEHOLDER MEETINGS, BECAUSE
ACTUALLY, THE C A. IS ACTUALLY
HAVING SUSTAINABILITY CHALLENGES
IN REGARD TO FINANCIAL SOLVENCY
BECAUSE OF THE REINSURANCE COSTS
AND GLOBAL INFLATION BECAUSE OF
AS WE GET MORE AND MORE
ATTRACTIVE IN REGARDS TO
INDIVIDUALS COME INTO THE SEA.
A. AS YOU KNOW, FOR INSURANCE.
WE DO NEED TO HAVE THE MONEY.
THEY'RE READY TO GO, IF IN ONE
CLAIMS WHEN A CONSUMER REQUESTS
OR PUTS IN A CLAIM SO WE ARE
RIGHT NOW IN REAL TIME HAVING
THE SUSTAINABILITY CHALLENGES,
SO IF WE'RE LOOKING AT JUST AND
I WOULD LIKE TO ADD THAT WE ARE
ABOUT A LITTLE NORTH OF 10% OF
CALIFORNIA HOMES DO HAVE A C E A
POLICY YET THAT'S 10% AND IF WE
DO LOOK AT HAVING MORE HOMES
NORTH OF 10% AND THEN AUTHORITY,
A WILDFIRE AUTHORITY AGAIN
SUSTAINABILITY CHALLENGES THE
YEARS THAT WOULD PROBABLY TAKE
TO GET IT UP AND RUNNING, AND
NOT TO MENTION AGAIN THE
POTENTIAL RATE SHOCK THAT
INDIVIDUALS WOULD GET BECAUSE
THERE WOULD BE SUCH A HIGH
CONCENTRATION OF THE RISKIEST
PROPERTIES, AND SO IS WHAT VICE
CHAIR HAD STATED. UM OF WE DO
HAVE THE FAIR PLAN AS THE
INSURANCE OF LAST RESORT WITH
THE COMMISSIONERS. STENT,
SUSTAINABLE INSURANCE STRATEGY
THAT WE DO HAVE A PLAN TO GET
THE FAIR PLAN BACK TO BE NO
LONGER THE FIRST ENSURE THAT THE
INSURER OF FIRST RESORT FOR MANY
, BUT BACK TO THE INSURANCE
INSURER OF LAST RESORT, THANK
YOU CORRECTED 10. I WAS
LISTENING TO STAFF OKAY. UM,
WOULD YOU LIKE TO MAKE SOME
CLOSING COMMENTS? UM LIST. I'LL
JUST CLOSE BY SAYING I REALLY
APPRECIATE THIS DIALOGUE TODAY.
I THINK THE CHAIRWOMAN FOR
HAVING THIS HEARING AND THE
COMMISSIONER FOR BEING AVAILABLE
IN YOUR STAFF. IT'S SO IMPORTANT
THAT WE HAVE THESE CONVERSATIONS
IN POLICY DISCUSSIONS IN A
PUBLIC FORUM SO THE PUBLIC CAN
SEE THE OVERSIGHT PROCESS AND WE
ARE SEPARATE BRANCHES OF
GOVERNMENT. WE HAVE A SEPARATE
ROLE THAN YOU DO, AND IT'S
IMPORTANT THAT WE RESPECT THOSE
AND THAT WE EACH PLAY OUR JOB. I
THINK FAR TOO OFTEN, THESE
CONVERSATIONS ARE HELD AND DARK
ROOMS USED TO BE SMOKE FILLED
DARK ROOMS. WE DON'T SMOKE
ANYMORE. SO STARK ROOM SOMEWHERE
, SO I JUST REALLY APPRECIATE
THE TRANSPARENCY AND THE
DISCUSSION AND I HOPE THAT UM
YOU GUYS CONTINUE WITH THE GOOD
WORK AND WHERE APPROPRIATE WE
CAN ASSIST OR THE LEGISLATURE
CAN CAN DO SOMETHING, PLEASE.
BRING THOSE SUGGESTIONS TO US
BECAUSE THIS IS A HUGE PRIORITY.
IT'S NOT EXCITING. YOU KNOW THE
MEDIA DOESN'T REALLY LIKE TO
COVER IT, BUT IT'S SO IMPORTANT.
AND UM, SURPRISINGLY, I'M
GETTING MORE UNSURPRISINGLY MORE
AND MORE CONSTITUENTS OR
BRINGING UP INSURANCE ISSUES TO
ME, AND, UM, WE JUST ALL WANT IT
FIXED. SO WE APPRECIATE YOUR
WILLINGNESS TO WORK HARD ON
THIS. THANK YOU. WOULD YOU LIKE
TO MAKE ANY CLOSING STATEMENT?
JUST THANK YOU AGAIN. THANK YOU
FOR YOUR TIME. I THINK YOU KNOW
FOR THOSE CALIFORNIANS THAT HAVE
LOST THEIR HOME. THEY'VE HAD TO
BECOME INSURANCE EXPERTS, UH AND
FACE INSURANCE COMPANIES ON
THEIR OWN. UNTIL WE STARTED TO
REALLY STEP STEP IN. I'M JUST
PROUD OF THE WORK THAT OUR TEAM
HAS DONE AND THE WORK THAT WE'VE
DONE TO TAKE OUR DEPARTMENT OUT
OF SACRAMENTO OUT OF LOS ANGELES
AND INTO THE COMMUNITIES, MANY
OF YOU HAVE BEEN TO YOUR
DISTRICTS TO HAVE THOSE
CONVERSATIONS AROUND INSURANCE
AND I'LL JUST CLOSE WITH SAYING
YOU KNOW, MOTHER NATURE IS
FORCING ALL OF US IN CALIFORNIA
TO BE INSURANCE EXPERTS AND
WE'RE GOING TO DO WHAT WE CAN TO
EMPOWER CALIFORNIANS TO KNOW
WHAT THEIR RIGHTS ARE AND TO
ENSURE THAT WE STABILIZE OUR
MARKET FOR THE FUTURE BECAUSE
NOT HAVING AN INSURABLE STATE OR
AN INSURABLE PLANET IS NOT AN
OPTION. THANK YOU. THANK YOU.
INSURANCE COMMISSIONER. AND I'D
LIKE TO ALSO THANK YOUR STAFF
FOR BEING HERE TODAY AND THIS IS
BEEN INCREDIBLY HELPFUL FOR US
TO BE ABLE TO DO THIS AND SUCH A
PUBLIC WAY. AND I'D LIKE TO
THANK MY COLLEAGUES TO FOR BEING
HERE. THANK YOU. GOOD DAY. NEXT
WE'LL MOVE TO PUBLIC COMMENT, UM
DURING THIS PORTION. UM
EVERYBODY WILL HAVE TWO MINUTES
AND WE'RE GONNA HOLD TO THAT
TIMELINE. SO TWO MINUTES EACH IS
THIS WHERE I STAND FOR PUBLIC
COMMENTS.
OKAY I'M SORRY THAT THE
INSURANCE COMMISSIONER LEFT
BECAUSE I REALLY WANTED TO
ADDRESS MY COMMENTS TO HIM AS
WELL. MY NAME IS ADRIANA LIM AND
I REPRESENT A HOMEOWNERS
ASSOCIATION OF 70 UNITS HERE IN
THE CITY OF PASADENA, AND WE
HAVE BEEN BECOME A VICTIM OF I
THINK THE WAR BETWEEN THE
INSURANCE COMMISSIONER AND THE
INSURANCE COMPANIES WE HAVE
BECOME BASICALLY UNINSURABLE. WE
HAVE BEEN NON RENEWED BY OUR
INSURANCE COMPANY. AND UM, I'D
LIKE TO LET THE, UH THE BOARD.
NO UM, YOU GUYS TALK ABOUT THIS
CALIFORNIA FAIR INSURANCE. UH,
ALTERNATIVE LIKE IT'S FAIR AND
AFFORDABLE. I'M GOING TO GIVE
YOU A QUOTE FOR UNITS. IT WAS,
UM, BY THE WAY WE APPLIED TO 46
INSURANCE COMPANIES AND ARE
DESPERATE SEARCH LOOKING FOR
INSURANCE. I AM A LAY PERSON. I
KNEW NOTHING REALLY ABOUT
INSURANCE UNTIL I BECAME VICE
PRESIDENT OF MY H O A AND FOUND
OUT THAT ARE H O S COMMERCIAL
POLICY WAS BEING CANCELED MIND
YOU WERE BEING CANCELED BECAUSE
OF A FIRE RISK. HOWEVER WE HAVE
NEVER HAD A CLAIM FOR ANY TYPE
OF FIRE RISK. IN THE 58 YEARS,
WE'VE EXISTED, THE OTHER ISSUE
THAT I HAVE WITH HOW OUR
INSURANCE IS BEING HELD IS OUR
INDIVIDUAL POLICIES DIMAS AS
BEING LOW RISK AND FIRE, BUT THE
COMMERCIAL POLICY THAT WE NEED
TO CARRY FOR OUR H O A UNIT.
DEEMS US HIGH RISK, AND IT'S
THAT DEEMING OF THE HIGH RISK
THAT GOT US NON REDOUTE BY OUR
INSURANCE COMPANY. WE APPLY TO
46 COMPANIES IN OUR DESPERATE
SEARCH FOR INSURANCE. THE RATE
THAT WAS QUOTED TO US BY THE
CALIFORNIA FAIR PLAN FOR THE 24
YEAR. WAS 348,700. PER YEAR TO
HAVE FIRE INSURANCE FOR OUR
COMMERCIAL FOR H O. A FIRE
INSURANCE POLICY OF WHICH WE'VE
NEVER HAD A CLAIM IN 58 YEARS.
YET OUR INDIVIDUAL HOMEOWNERS
INSURANCE POLICY HAS DECLARED AS
BEING A LOW FIRE RISK. I FIND
THAT THERE'S AN ISSUE WITH THE
SAME BUILDING BEING CONSIDERED
LOW FIRE RISK FOR AN INDIVIDUAL
POLICY AND HIGH FIRE RISK FOR
THE SAME BUILDING JUST
COLLECTIVELY PUT TOGETHER AND I
WISH THAT THE INSURANCE
COMMISSIONER WAS HERE TO EXPLAIN
WHY INSURANCE COMPANIES CAN DO
THAT, AND FARMERS INSURANCE WAS
OUR CARRIER, THE INDIVIDUAL
FARMERS INSURANCE POLICY
INDICATED THAT WE WERE LOW FIRE
RISK THE COMMERCIAL POLICY THAT
WE HAVE TO BUY AS THE H O A
CONSIDERED US HIGH FIRE RISK. I
FIND THAT TO BE CONTRADICTORY,
VERY CONFUSING FOR OUR
HOMEOWNERS. AND I HAVE AN H O A
BOARD MEETING TONIGHT, AND I
HAVE TO EXPLAIN WHY WE'RE GOING
TO BE MAKING A SPECIAL
ASSESSMENT OF $500 PER
HOUSEHOLD. TO HELP COVER OUR
COSTS FOR INSURANCE. THANK YOU.
AND YOU KNOW THE INSURANCE
COMMISSIONERS CHIEF DEPUTY IS
STILL HERE. IF YOU WANT TO TRY
AND TALK TO HIM. OH, I HOPE
YOU'RE TAKING NOTES. BY THE WAY.
I'D LIKE TO VOLUNTEER TO BE IN
ANY TYPE OF COMMISSION THAT YOU
HAVE WITH REGARDS TO INSURANCE.
NOW SINCE I'VE SUDDENLY BECOME
SELF EDUCATED ON THIS, THANK
YOU. THANK YOU VERY MUCH FOR
YOUR TIME. I APPRECIATE IT VERY
MUCH. THANK YOU. OKAY HELLO. HEY
GOOD MORNING, MADAM CHAIR AND
MEMBERS ARE IN TAYLOR ON BEHALF
OF THE PERSONAL INSURANCE
FEDERATION OF CALIFORNIA. UH WE
REALLY WANT TO THANK THE
COMMITTEE FOR ALL YOUR WORK THIS
YEAR. ADDRESSING WILDFIRE
INSURANCE, RISK RESILIENCY AND
RECOVERY. UM TODAY'S HEARING TO
EXPLORE THE COMMISSIONER'S
SUSTAINABLE INSURANCE STRATEGY
WOULDN'T BE POSSIBLE WITHOUT
YOUR FOUNDATIONAL WORK, WHICH
HAS LED US TO THE POINT WHERE
THE GOVERNOR, THE INSURANCE
COMMISSIONER, KEY CONSUMER
STAKEHOLDERS, AND INSURERS ARE
ALL MOVING IN THE SAME
DIRECTION. WE FINALLY HAVE
AGREEMENT ON THE PROBLEM. WE
FINALLY HAVE AGREEMENT ON THE
SOLUTION. AND NOW WE NEED TO
MOVE QUICKLY AND COLLABORATIVELY
TO INCREASE INSURANCE
AVAILABILITY AND RELIABILITY.
FOR ALL CALIFORNIANS. UM WE
SHOULD UNDERSTAND THE WORK. THE
DEPARTMENT OF INSURANCE IS
UNDERTAKING THIS COMPLEX AND
IT'S DIFFICULT BUT ALSO
NECESSARY. IT'S GOING TO REQUIRE
COMPROMISE BY ALL STAKEHOLDERS.
UM I ASSURE YOU THAT INSURERS DO
NOT UM. REALLY TAKE THE REQUIRED
COMMITMENT TO WRITE AT LEAST 85%
OF THEIR STATEWIDE MARKET SHARE
AND HIGH WILDFIRE RISK AREAS
LIGHTLY OR EASILY. UM OTHER
STATES DO NOT IMPOSE SUCH
REQUIREMENTS AS A CONDITION TO
USE MODERN RISK ASSESSMENT TOOLS
LIKE CATASTROPHE MODELS OR TO
ALLOW THE NET COST OF
REINSURANCE. SO THIS IS UNIQUE
ASPECT OF DOING BUSINESS IN
CALIFORNIA. BUT WE ACCEPT THIS
AS NECESSARY FOR US ALL TO MOVE
FORWARD. UM YOU KNOW, CLEARLY
THERE ARE MANY DETAILS THAT NEED
TO BE WORKED OUT TO MAKE THE
COMMISSIONER'S STRATEGY
SUCCESSFUL. BUT WE REMAIN
OPTIMISTIC THAT IT WILL RESULT
IN A MORE STABLE INSURANCE
MARKET AND PROVIDE GREATER
INSURANCE AVAILABILITY ACROSS
THE STATE. UM THAT'S OUR SHARED
GOAL, AND WE APPRECIATE THE
COMMISSIONER'S LEADERSHIP, AND
IT IS COMMITTED TO BEING A FULL
PARTNER IN THAT PROCESS. SO
THANK YOU ALL. THANK YOU. GOOD
AFTERNOON. MADAM CHAIR MEMBERS,
THE COMMITTEE ARMAN FELICIANO,
REPRESENTING FAIR PLAN. I'M HERE
TODAY. JUST TWO. QUICK GIVE YOU
A QUICK UPDATE WHEN A FAIR PLAN
IS AND I WON'T BE ABLE TO POINT
I THINK IT'S BEEN DISCUSSED. THE
DEMAND IS PRETTY HIGH WITH A
FAIR PLAN. AT THIS POINT, THAT'S
A WIDELY DISCUSSED ISSUE. UM
TODAY. THE FAIR FAN IS THAT
340,000 POLICIES AND FORCED, UH,
IT'S GROWN FROM 50 TO ABOUT 200
STAFF. AH DID THEY HAVE ABOUT 40
TEMPS TRYING TO MANAGE THAT
DEMAND AND PART OF THEM.
MANAGING THE DEMAND IS THAT THEY
HAD RECENTLY PUT IN A SYSTEM TO
ADDRESS THEIR POLICY CLAIMS AND
BUILDING. UH YOU KNOW WITH THAT,
OBVIOUSLY, THERE'S SOME
COMBINATION OF HIGH DEMAND AND
NEW SYSTEMS THAT HAS BEEN
DISRUPTIONS YOU PROBABLY HEARD
BUT TO ADDRESS THOSE ISSUES THE
FAIR PLAN. IS WORKING WITH THE
REALTORS AGENTS, POLICYHOLDERS,
THEY HAVE A ESCALATION TEAM THAT
WEBINARS AND THEY DO HAVE
RECENTLY HAD MORE TEMPS. UH
NONETHELESS, I THINK THE MESSAGE
HERE TODAY IS THE FAIR THING IS
DOING THE BEST THEY CAN GIVEN
THE DEMAND IN FRONT OF THEM, AND
THEY REMAIN COMMITTED TO WORKING
WITH THAT POLICYHOLDERS. THAT
NEED A FAIR PLAN. THANK YOU.
GOOD AFTERNOON. MY NAME IS RYAN
GAZELLE. I'M HERE ON BEHALF OF
COMMUNITY ASSOCIATIONS,
INSTITUTES, EAI. WE REPRESENT
OVER 50,000 HOMEOWNERS
ASSOCIATIONS THROUGHOUT
CALIFORNIA, WHICH HOUSED MORE
THAN 14 MILLION PEOPLE. FIRST
I'LL TELL YOU WHAT WE'VE
ACCOMPLISHED WITH THE HELP OF
THE DEPARTMENT OF INSURANCE 60%
OF THE ASSOCIATIONS IN
CALIFORNIA ARE CONDOMINIUMS AND
TOWN HOMES. FOR MANY YEARS. THE
CALIFORNIA FAIR PLAN DID NOT
COVER THEM, LEAVING THOSE FOLKS
IN MANY CASES WITHOUT AN OPTION
FOR INSURANCE. THE DEPARTMENT OF
INSURANCE HELPED TO NEGOTIATE
WITH THE FAIR PLAN. TO BE SURE
THAT THE CONDOMINIUM IN TOWN
HOMEOWNERS ALSO HAD ACCESS TO
THE INSURANCE THEY NEEDED. THE
DEPARTMENT OF INSURANCE ALSO LED
THE CHARGE AND INCREASING THE
LIMITS AVAILABLE THROUGH THE
CALIFORNIA FAIR PLAN FROM THE UP
TO FROM 5.6 BILLION UP TO 20
MILLION, WHICH WAS VERY HELPFUL.
THE NEXT STEPS. WE KNOW THAT THE
20 MILLION LIMIT WITH THE FAIR
PLAN WAS JUST A RELEASE VALVE
FOR THE PRESSURE'S BUILDING UP
IN THE INSURANCE MARKET. IT
ALLOWED MANY FAMILIES TO GET
INSURANCE THAT WOULD NOT HAVE IT
OTHERWISE, BUT THIS SOLUTION IS
NOT SUSTAINABLE, THE WAY THAT IT
IS. WE ALL AGREE THAT BRINGING
TRADITIONAL CARRIERS BACK INTO
THE MARKET WILL HELP
CALIFORNIANS FIND THE INSURANCE
THAT THEY NEED TO PROTECT THEIR
HOMES. HOW WE DO THAT SHOULD
INCLUDE, AND THIS IS WHERE YOU
GUYS CAN HELP A DEFINITION OF
WILDFIRE THAT IS AGREED UPON BY
THE CARRIERS AND THE DEPARTMENT
OF INSURANCE SO THAT EXISTING
INSURANCE POLICIES THAT ALREADY
ALLOW FOR A WILDFIRE DEDUCTIBLE
OR FOR WILDFIRE TO BE SOLD.
THERE'S A SEPARATE RISK CAN
ACTUALLY BE SOLD IN CALIFORNIA.
OTHERWISE CARRIERS WILL EXCLUDE
THE PERIL OF FIRE ALTOGETHER
BECAUSE THEY CANNOT SEPARATE OUT
WILDFIRE IN A WAY THAT WOULD BE
RECOGNIZED RECOGNIZED BY THE
DEPARTMENT OF INSURANCE WHEN IT
CAME TO PAYING OUT CLAIMS. WE
ALSO NEED LEGISLATION THAT WOULD
ALLOW CARRIERS TO BYPASS THE
STANDARD FIRE POLICY FORM, WHICH
IS CURRENTLY A MAJOR ROADBLOCK
FOR CARRIERS IN OUR STATE. THANK
YOU VERY MUCH FOR YOUR
UNDERSTANDING OF HOW SERIOUS
THIS INSURANCE CRISIS IS, AND WE
THANK YOU FOR TRYING TO TAKE
STEPS TO MITIGATE IT. THANK YOU.
GOOD AFTERNOON, MADAM CHAIR
MEMBERS OF THE COMMITTEE DENNY
RITTER HERE WITH THE AMERICAN
PROPERTY CASUALTY INSURANCE
ASSOCIATION. I DO WANT TO THANK
YOU FOR THE HEARING TODAY AND
THE REALLY THOUGHTFUL DISCUSSION
CALIFORNIA'S OUTDATED INSURANCE
MARKET. IS REALLY FEELING
FAMILIES, CONSUMERS, BUSINESSES.
REALLY EVERYONE IN THE STATE
RIGHT NOW IS SUFFERING AND WERE
ACUTELY AWARE OF THAT. WE
COMMEND THE COMMISSIONER FOR ALL
OF THE ACTION HE IS TAKING TO
FIX THIS INSURANCE COVERAGE
CRISIS BY ENACTING THESE
REGULATORY REFORMS TO RESTORE
THE MARKET. UM AND PROTECT
CONSUMER ACCESS TO THE COVERAGE.
THE COMMISSIONER'S PROGRESS
REFLECTS THE FIRST OF MANY STEPS
THAT ARE NEEDED AND WE LOOK
FORWARD TO BEING ACTIVE PARTNER
IN THAT PROCESS. I DO WANT TO
REITERATE AND REEMPHASIZE
SOMETHING. THE COMMISSIONER SAID
INSURERS DO NOT WANT TO LEAVE
THE STATE OF CALIFORNIA. WE ARE
COMMITTED TO WORKING WITH POLICY
MAKERS. UM AND TO THAT END, YOU
KNOW, WE WANT TO THANK THE
SPEAKER. AND WE WANT TO THANK
THIS COMMITTEE AND THE CHAIR IN
PARTICULAR FOR HOLDING THESE
HEARINGS AND ENGAGING IN THESE
THOUGHTFUL, NOT ALWAYS EXCITING
DISCUSSIONS. UM AND REALLY LOOK
FORWARD TO BRINGING STABILITY
AND AVAILABILITY BACK TO THE
MARKET. WE REMAIN COMMITTED TO
WORKING WITH THE GOVERNOR,
LEGISLATIVE LEADERS, THE
COMMISSIONER AND ALL ENGAGED
STAKEHOLDERS AS WE SEEK
SOLUTIONS TO THE ISSUES THAT ARE
PLAGUING US ALL. THANK YOU FOR
YOUR TIME. HELLO COMMITTEE
MEMBERS. MY NAME IS CARMEN BALL,
BRO. I'M THE EXECUTIVE DIRECTOR
OF CONSUMER WATCHDOG. UM AND YOU
ALL ASK WHAT YOU CAN DO OF THE
COMMISSIONER AND I HAVE A
PROPOSAL FOR YOU THE NUMBER ONE
THING YOU COULD DO TO GUARANTEE
THAT HOMEOWNERS WHO PROTECT
THEIR HOMES FROM FIRE HAVE
INSURANCE QUICKLY IS TO MANDATE
THAT HOME INSURERS SELL IT TO
THEM. WE HAVE A MANDATE IN
CALIFORNIA THAT SAYS ALL GOOD
DRIVERS. GOOD AUTO INSURANCE. WE
SHOULD HAVE THE SAME MANDATE FOR
HOME INSURANCE FOR HOMEOWNERS
WHO MEET THE STATE APPROVED
GUIDELINES FOR HOME HARDENING
AND MITIGATION. UM SO WE URGE
YOU TO BRING THAT PROPOSAL UP
QUICKLY IN THE COMING
LEGISLATIVE YEAR. IT WAS A
PROPOSAL THAT DIDN'T GET A
HEARING IN THIS COMMITTEE LAST
YEAR OR THIS LAST LEGISLATIVE
SESSION. WE URGE YOU TO ADDRESS
THAT QUICKLY, EVEN WITH URGENCY
NEXT YEAR, BECAUSE THAT WILL GET
THE PEOPLE IN YOUR DISTRICT, MR
WOOD, WHO HAVE DONE ALL THE
RIGHT THINGS AND MITIGATED
INSURANCE FOR THEIR HOMES. UM I
ALSO JUST WANNA, FRANKLY EXPRESS
MY DISAPPOINTMENT THAT YOU
DIDN'T ASK THE MOST IMPORTANT
QUESTION OF THE INSURANCE
COMMISSIONER. AND THAT IS FOR
PROOF THAT THE COMMITMENT THAT
HE SAYS HE'S EXTRACTED FROM THE
INDUSTRY WILL ACTUALLY GET
PEOPLE COVERED. AS YOU ALL KNOW,
THERE WAS LEGISLATION THAT
CIRCULATED IN THE LEGISLATURE
LAST YEAR. THE CONSUMER WATCHDOG
OBTAINED UNDER THE PUBLIC
RECORDS ACT, AND IT WAS A MODEL
FOR THE REGULATORY PROPOSAL THAT
THE COMMISSIONER PUT FORWARD IN
SEPTEMBER WHEN THAT LEGISLATION
DIDN'T PASS. AND THAT PROPOSAL.
HAD TWO MASSIVE LOOPHOLES IN ITS
85% COMMITMENT. THAT MEANT THAT
NO NEW INSURED. NO NEW HOMEOWNER
WAS GOING TO HAVE ACCESS TO
COVERAGE. THE FIRST LOOPHOLE.
WAS THAT THE COMMISSIONER COULD
WAIVE IT FOR ANY INSURER WHO
SAID THEY COULDN'T MEET IT.
THAT'S ONE. THE SECOND ONE IS
ALMOST MORE IMPORTANT. THAT
INSURERS COULD MEET THAT
COMMITMENT BY OFFERING NOT
REGULAR STANDARD HOMEOWNER'S
INSURANCE POLICIES AT A
REASONABLE PRICE, BUT BY SELLING
BARE BONES FAIR PLAN LIKE
POLICIES INSTEAD OF A REGULAR
POLICY ON THE VOLUNTARY MARKET.
AND IF ALL CONSUMERS ARE GETTING
OUT OF THIS DEAL IS A PLAN LIKE
THE ONE THEY DON'T LIKE IN CAN
AFFORD AND THE FAIR PLAN TODAY
THAN CONSUMERS HAVE GOTTEN
NOTHING OUT OF WHAT IS OTHERWISE
A GIVEAWAY TO THE INSURANCE
INDUSTRY. SO WE URGE YOU WE HOPE
NEXT TIME YOU HAVE THE
COMMISSIONER AROUND. YOU ASKED
HIM THAT QUESTION, AND WE ASKED
THE COMMISSIONER HERE TODAY TO
ANSWER THAT QUESTION BECAUSE WE
HAVE SEEN NO EVIDENCE. THAT THIS
85% COMMITMENT WILL ACTUALLY
PLAY OUT TO NEW HOME COVERAGE
FOR CALIFORNIANS. THANK YOU.
THANK YOU. OKAY THIS CONCLUDES
OUR HEARING TODAY. THANK YOU ALL
FOR ATTENDING.