Solutions to streamline rate review process on the horizon, he says
The California Department of Insurance has revealed that it is moving forward with “a package of regulatory solutions” to streamline its rate review process.
This plan was brought up in a statement by insurance commissioner Ricardo Lara after a controversial bill to ease California’s embattled homeowners market failed to pass through the state legislature.
The bill had been panned by consumer advocacy groups, stating that it would have led to significant premium hikes. They also called it a bailout for the industry and criticized how the public has seemingly been left out of the discussions regarding the proposal.
“It is particularly offensive that this proposal is being rushed through in secrecy during the final weeks of the legislative session,” the groups said in a letter addressed to Governor Gavin Newson. “A plan to bail out the insurance industry and make Californians pay demands a thorough public debate, but the details of this proposal have yet to be seen in public.”
Amid the controversy surrounding the bill, industry groups have long argued for modernizing California’s regulatory framework to allow insurers to keep up with record-breaking losses caused by climate change and extreme weather.
Several insurers have either ceased writing new policies in the state or have exited it entirely in recent months. Experts have voiced concerns that without proper action, other companies may follow suit.
“Everyone knows the hard truths of what has to happen: there need to be rate adjustments; reinsurance and prospective catastrophic modeling need to be authorized; the rate review process needs to be accelerated; insurance discounts for home-hardening must be authorized; we need to modernize the insurance market. You can begin this process yourself, now.”
Legislation is just one of “many options” the department has been pursuing, Lara said in his statement, pointing to “a package of regulatory solutions” meant to streamline the rate review process.
While he did not offer details regarding this plan, Lara did mention that it involves “opening [the rate review process] equitably to public input — not just the entrenched interests that have benefited materially from the status quo.”
He said climate change has pushed the market down a path that is currently “unsustainable,” and that the department’s ongoing partnership with the Governor and Legislature is “critical to crafting lasting solutions.”
“We will continue moving forward,” the commissioner said. “Together, we can create a sustainable and resilient insurance market to protect Californians, our communities, and our environment.”
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