THIS HEARING OF CALIFORNIA STATE
SENATE.
INSURANCE COMMITTEE I WOULD
FIRST LIKE TO THANK COMMITTEE
MEMBERS AND THE PANELISTS HERE
TODAY INCLUDING OUR VERY OWN
INSURANCE COMMISSIONER.
WE GOT A LOTTA WHO'S ALWAYS BEEN
A FRIEND TO ME AND HE S. SENATE
SO WELCOME COMMISSIONER.
AS YOU KNOW CALIFORNIANS
THIRTEEN THOUSAND SHARES COLLECT
OVER THREE HUNDRED BILLION IN
PREMIUMS ANNUALLY ON A MULTITUDE
OF PRODUCTS.
AND ALTHOUGH OUR FOCUS OVER THE
LAST THREE YEARS HAS BEEN ON
WILD FIRES THIS YEAR WE WILL
ALSO BE TACKLING A VARIETY OF
PRESSING ISSUES THAT FALL WITHIN
THE COMMITTEE'S JURISDICTION.
BUT THIS HEARING IS INTENDED TO
INTRODUCE THE COMMITTEE ON THE
PUBLIC TO THE TOPICS AND
AGENCIES WITHIN THIS COMMITTEE'S
JURISDICTION.
TODAY WE HAVE SEVERAL PALACE TO
BEGIN COMMISSION ALATA WILL
PROVIDE AN OVERVIEW OF THE
DEPARTMENT OF INSURANCE CORE
RESPONSIBILITIES AND SOME OF ITS
MORE NOTABLE PROGRAMS.
NEXT WE WILL HAVE
REPRESENTATIVES OF CALIFORNIA'S
TO INSURANCE GUARANTEE COULD
ASSOCIATIONS.
THESE ASSOCIATIONS ARE IMPORTANT
BACKDROP TO THE INSURANCE MARKET
AND HAVE PAID POLICY HOLDERS
BILLIONS FOR CLAIMS OVER THE
YEARS.
THEY WILL UPDATE US ON THEIR
ROLE IN PROTECTING POLICY
HOLDERS AND IN THE EVENT OF
INSURANCE INSOLVENCY.
OUR THIRD PANEL WILL DISCUSS
SOME OF THE MORE CHALLENGING
ASPECTS OF COVERAGE IN
CALIFORNIA PARTICULARLY
HOMEOWNERS COVERAGE WITH ELEVEN
POINT FOUR BILLION IN INSURED
LOSSES FROM WILDFIRES LAST YEAR.
WE EXPECT TO HAVE FUTURE
CONVERSATIONS ON ACCESSIBILITY
AND AFFORDABILITY.
ARE TO HOMEOWNERS INSURANCE AS
THE MARKET RESPONSE TO THESE
LOSSES TODAY OUR PANELISTS WILL
LAY SOME OF THE GROUNDWORK FOR
THOSE DISCUSSIONS IN THE FUTURE.
SPECIFICALLY REPRESENTATIVES
FROM THE CALIFORNIA EARTHQUAKE
AUTHORITY THE CALIFORNIA FAIR
PLAN AND THE SURPLUS LINES
ASSOCIATIONS WILL WALK US
THROUGH THE ROLE OF THEIR
ORGANIZATIONS -- THAT THEY PLAY
IN OBTAINING COVERAGE WHEN IT'S
READILY AVAILABLE LASTBUT NOT
LEAST WE WILL HEAR FROM
CALIFORNIA'S LARGEST PROVIDER OF
WORKERS COMPENSATION INSURANCE
THE STATE FUND.
AFTER PANELS WE WILL HAVE TIME
FOR STAKEHOLDERS AND MEMBERS OF
THE PUBLIC TO INTRODUCE
THEMSELVES AND MAKE COMMENTS IF
THEY WISH.
I TO BEGIN I WOULD LIKE TO FIRST
WELCOME THE COMMITTEE MEMBERS
HERE TODAY THANK YOU FOR BEING
HERE.
AND IF YOU WISH I WILL ALLOW YOU
TO MAKE ANY INTRODUCTORY MARK
REMARKS [inaudible]
YOU MAY.
MORNING MADAM CHAIR NOW AND
THOSE IN ATTENDANCE -- I'M
SENATOR BOB ARCHULETA IN THIS IS
MY FIRST MEETING AS A FRESHMAN
AND I'M VERY ANXIOUS TO HEAR
FROM MARK COMMISSIONER -- ON THE
INSURANCE AND THINGS THAT ARE
HAPPENING AND ON THE BROAD SCOPE
OF INSURANCE -- TOUCHES ALL OUR
LIVES -- REGARDLESS OF WHAT YOU
DRIVE WHERE YOU LIVE INSURANCE
IS IN OUR LIVES SOMEWHERE AND
FOR OUR FAMILY -- TO HAVE THIS
OPPORTUNITY HERE FROM ALL OF YOU
AND ESPECIALLY THE COMMISSIONER
IT'S A GREAT HONOR AND I'M SO
PLEASED TO BE HERE THANK YOU
MADAM CHAIR.
OR JUST.
WANT TO THANK A I'M SURE WOMAN
FOR A FOR HAVING THIS --
INSURANCE ONE A ONE IF YOU WILL
AS A NEW MEMBER -- LOOKING FOR
TO LEARNING AND OF COURSE
HEARING FROM OUR STEAM -- TO
COMMISSIONERS SO WE SHOULD THE
OPPORTUNITY.
THANK YOU WELL I'M HONORED TO BE
LEARNING ALONG WITH YOU
GENTLEMEN THANK YOU FOR BEING
HERE TODAY OUR FIRST PANEL OF
COURSE IS THE DEPARTMENT OF
INSURANCE ARE THE DEPARTMENT OF
INSURANCE PLACE THE LEAD
OVERSIGHT ROLE.
IN REGULATING INSURERS AND
PROTECTING INSURANCE MARKET IT
IS ALSO A LARGE AGENCY WITH
CRITICAL ROLE IN ENSURING
CALIFORNIA'S POLICY HOLDERS HAVE
FAIR ACCESS TO INSURANCE AT
AFFORDABLE PRICES THE DEPARTMENT
IS LED BY OUR NEWLY ELECTED.
COMMISSIONER RICARDO LARA
WELCOME AND YOU HAVE THE FLOOR
THANK YOU SO MUCH FOR BEING HERE
TODAY.
THANK YOU MADAM CHAIRWOMAN
MEMBERS IT'S GREAT TO BE BACK.
ON THE SENATE SIDE.
OF THE LINE ITSELF I DON'T THAT
TIE THAT I DON'T MISS IT BUT I
DO -- AND IT'S GLAD TO TO BE
HERE IN THIS YOU CAPACITY TO
SHARE WITH YOU SOME OF THE WORK
THAT WE'RE DOING AND THE VISION.
OF OUR DEPARTMENT UNDER MY
LEADERSHIP.
IT'S DEFINITELY A PLEASURE TO
JOIN YOU HERE TODAY TO TALK A
LITTLE BIT ABOUT THE DEPARTMENT --
DURING MY INAUGURAL ADDRESS A
REFER TO THE DEPARTMENT OF
INSURANCE OF THE DEPARTMENT OF
HOPE.
I HAVE ALWAYS BROUGHT.
UP BUSINESS AT THE TABLE WHEN WE
MAKE POLICY AND MAKE THOSE TOUGH
DECISIONS WHETHER TO PROTECT THE
RIGHTS OF OUR IMMIGRANTS EXPAND
ACCESS TO HEALTH CARE. TO
PROTECT THEIR INSURANCE AND MAKE
SURE WE HAVE A STRONG INSURANCE
MARKET.
I HOPE BECAUSE IT IS WHAT
INSURANCE ESSENTIALLY DOES IT
GIVES US THE HOPE THE PEACE OF
MIND THAT COMES.
WHEN KNOWING THAT INSURANCE WILL
GIVE US WHAT WE NEED? TO MOVE
BEYOND A LOSS AND HOPE FOR A
BETTER TOMORROW FOR THOSE THAT
ARE STRUGGLING.
AFTER THESE RECENT FIRES --
DURING MY INAUGURAL SPEECH I
ALSO TALKED ABOUT THE NEED TO
REESTABLISH OUR RELATIONSHIP
WITH THE LEGISLATURE.
AND AND I'LL TELL YOU THAT HAVE
BEEN UNEQUIVOCAL IN THE
CONVERSATIONS WITH MY STAFF --
TO MAKE SURE THAT WE RESPECT
YOUR ROLE RESPECT YOUR PROCESS
AND ENSURE THAT WE CAN WORK
TOGETHER IN A WAY THAT'S
HOLLISTER CAN COMPREHENSIVE TO
GET US TO THE THE SOLUTIONS THAT
WE NEED AS WE CONTINUE TO FACE.
ANNOUNCER ON WBAL AMOUNT OF
CHALLENGES IN CALIFORNIA -- THE
DEPARTMENT OF INSURANCE IS THE
NATION'S LARGEST CONSUMER
PROTECTION AGENCY.
A HUNDRED AND FIVE THOUSAND FOUR
HUNDRED DEDICATED SKILLED
PROFESSIONAL MEMBERS WITH THE
BUDGET OF NEARLY THREE HUNDRED
MILLION. THREE HUNDRED SWORN
INVESTIGATORS AND DETECTIVES WHO
INVESTIGATE INSURANCE FRAUD.
AND FINANCIAL CRIMES RECOVERING
OVER EIGHTY ONE MILLION IN
CLAIMS AND PREMIUMS EACH YEAR
THAT THAT WAS A UNIQUE THING
THAT MOST PEOPLE DON'T KNOW THAT
WE DO HAVE.
A TREMENDOUS AND VERY.
ROBUST -- DETECTIVES AND
INVESTIGATORS TO INVESTIGATE --
FRAUD IN CALIFORNIA CALIFORNIA
CONTINUES TO BE UNFORTUNATELY
GROUND ZERO FOR MANY OF THESE.
CRIMES A HUNDRED COMPLIANCE
OFFICERS WHO CHOOSE WHO CHOOSE --
THIS JOB.
IT IS TO TAKE A OUR CONSUMER
CALLS INTO OFFICE WITH ANY
QUESTIONS REGARDING INSURANCE
CLAIMS INSURANCE COMPANIES OR
EVEN ASSIST AND FIND THE RIGHT
INSURANCE PRODUCT.
MORE THAN A HUNDRED AND SEVENTY
THOUSAND BECAUSE EVERY YEAR FROM
CONSUMERS THAT NEED THE REST
THAT THEY NEED ASSISTANCE AND
HAVE.
SUCCEEDED IN RECOVERING MORE
THAN FOUR HUNDRED AND TWENTY
MILLION DOLLARS FOR OUR
CONSUMERS.
CALIFORNIA IS AS YOU KNOW THE
LARGEST INSURANCE MARKET IN THE
COUNTRY THREE HUNDRED BILLION
DOLLARS IN PREMIUMS ANNUALLY.
EIGHT BILLION. FOR HOMEOWNERS
THIRTEEN BILLION FOR WORKERS
COMPENSATION TWENTY SEVEN
BILLION IN PRIVATE PASSENGER
AUTO WITH OVER A HUNDRED AND A
THOUSAND THREE HUNDRED COMPANIES.
THREE HUNDRED AND SIXTY THOUSAND
AGENTS BROKERS ARE LICENSED BY
THE DEPARTMENT I GOT TO THE
NUMBERS ALREADY SO.
THAT WASN'T HIMSELF AND G. --
BUT MISSION OF THE DEPARTMENT IS
TO PROTECT PRESERVE I PREVENT
WHETHER IT'S FRAUD OR LOSS FROM
DISASTERS LINKED TO CLIMATE
CHANGE OUR SENIORS PEOPLE LIVING
IN POVERTY AND IMMIGRANT
COMMUNITIES.
ARE TARGETS OF CON ARTIST AND
SCAMS ARE UNDERPINNED WARS FACE
ECONOMIC UNCERTAINTY MILLIONS OF
US LIVE ONE EMERGENCY ROOM VISIT
AWAY FROM FINANCIAL RUIN
UNFORTUNATELY.
AS I LOOK AT THESE ISSUES WE
FACE I BELIEVE HOPE IS -- NOW
MORE IMPORTANT THAN EVER.
AND WE'VE BEEN BUSY THUS FAR
SINCE JANUARY I HAVE TO TELL YOU
THAT OUR STAFF HAVE HELPED HELD
WORKSHOPS AND SHE GOING TO GORE
HILLS.
THEY GAVE -- IN PERSON ONE ON
ONE SESSIONS TO HELP OVER SIX
HUNDRED WELL FIR SURVIVORS
WE'VE HELPED OVER TWO HUNDRED
SURVIVORS THROUGH ARE CONSUMER
HOTLINES.
AND OUR STAFF ALSO ASSISTANT
AFTER HE MERELY AFTER THE
RUSSIAN RIVER FLOODS AND SERVED
IN OUR LOCAL ASSISTANCE CENTER
IN GRANVILLE SO WE ARE TRYING TO
GET -- TO THESE DISASTER AREAS
AS QUICKLY AS POSSIBLE TO ASSIST
FOLKS ONE OF THE THE KEY ISSUES
THAT WE'RE SEEING IS WELL FOLKS
ARE MAKING VERY VERY IMPORTANT
DECISIONS.
IMMEDIATELY AFTER A DISASTER AND
THEY'RE DOING I'M UNDER
CIRCUMSTANCES OF GREAT STRESS WE
WANT TO MAKE SURE WE'RE ABLE.
TO GIVE THEM THE APPROPRIATE
INFORMATION SO THAT THEY CAN
BEST MAKE THE DECISIONS FOR
THEMSELVES AND THEIR FAMILIES.
THERE'S NO QUESTION UNDER OUR
SATE HAS BEEN SCORCHED BY
WILDFIRES FOR NEARLY FIVE YEARS
LEAVING TENS OF THOUSANDS OF
CALIFORNIANS HOMELESS AND FACING
A LONG DIFFICULT ROAD.
AS THEY WORK TO REBUILD THEIR
LIVES AND THEIR HOMES -- I AM
CONCERNED ABOUT THE
AFFORDABILITY AND THE
AVAILABILITY OF HOMEOWNERS
INSURANCE ESPECIALLY IN A HIGH
RISK WELFARE AREAS AS MANY OF
YOU.
CLIMATE CHANGE HAS A IS HAVING A
DRAMATIC EFFECT ON ENVIRONMENT
ON OUR ENVIRONMENT AND OUR WAY
OF LIFE.
AS LONG AS DAHLE CYCLES CREATE
WILDFIRE FEEL AND SEE LEVELS.
LEVEL RISE LEADING TO RECORD
FLOODS ACROSS OUR NATION.
THE PRESSURE ON INSURERS WILL
CONTINUE TO GROW AS IS ASTERS
RELATED -- AMOUNT TO MORE MORE
LOSSES THAT IS WHY MY FIRST DAY
AS INSURANCE COMMISSIONER
ANNOUNCED THE CREATION OF A
DEPUTY COMMISSIONER OF CLIMATE
AND SUSTAINABILITY.
A FIRST FOR THE DEPARTMENT TO
WORK WITH ENVIRONMENTAL AND
INDUSTRY LEADERS ON INNOVATIVE
SOLUTIONS TO RISK OF CLIMATE
CHANGE.
OUR INNOVATIVE -- SOLUTION ONE
OF THE INNOVATIVE SOLUTIONS THAT
I'M PROUD TO PROMOTE WITH
SENATOR BILL DODD IS A
CALIFORNIA DISASTER INSURANCE
THAT WOULD OTHERWISE CALIFORNIA
TO HAVE A KIND OF STRONG.
CONSERVE FIX INSURANCE
PROTECTION PLAN THAT PAYS OUT
WHEN UNEXPECTED COSTS OF
DISASTERS RESPOND IT'S A MUCH
BETTER WAY WE BELIEVE -- TO
HANDLE OUR WELFARE FUNDS A MUCH
SMARTER WAY AS WE MOVE FORWARD
TO IDENTIFYING HOW DO WE NOT
ONLY MITIGATE BUT CONTINUE TO
PUT MONEY ASIDE.
AS WE CONTINUE TO FACE THESE
FIRES.
BASED ON LEGISLATION FROM -- TWO
THOUSAND EIGHT WE ARE GONNA BE
IT COMPLETING A GROUP MADE OF
MEMBERS REPRESENTING.
THE INDUSTRY ENVIRONMENTAL
GROUPS AND ACADEMIC RESEARCHERS
TO GIVE US MORE IDEAS OF HOW DO
WE CREATE MARKET BASED
MECHANISMS TO HELP US ADDRESS
CLIMATE CHANGE.
OUR GOALS ARE TO LOOK AT
PROACTIVE RISK TRANSFER
MECHANISMS THAT REDUCE FUTURE
RESTS FOR COMMUNITIES.
THE INSPIRATION OF THE GRASS OF
THIS GROUP COMES FROM INNOVATIVE
INSURANCE PRODUCTS THAT HAVE
BEEN DEVELOPING KUNKEL MEXICO
ENVIRONMENTAL GROUPS LOCAL
BUSINESSES AND WE INSURANCE
COMPANIES.
ARE COLLABORATED TO DESIGN AN
INSURANCE PRODUCT FOR THE CORAL
EEF -- THIS ROOF IS THAT
PROTECT NOT ONLY PROTECTIVE TO
THE COMMUNITY BUT PROTECTING THE
LOCAL ECONOMY WHEN A LARGE STORM
HITS THEY CAN.
ASSESS THE DAMAGE OF THE REEF
AND WHICH OBVIOUSLY LEAVES A
COMMUNITY EXPOSED TO THE NEXT
STORM THIS INNOVATIVE INSURANCE
POLICY PROVIDES A WAY FOR
RESTORING THE REEF WITHOUT
STRAINING THE GENERAL FUND AFTER
A STORM.
THE CALIFORNIA CLIMATE INSURANCE
A WORKING GROUP WILL BE ASKING
ARE THERE.
CALIFORNIA AND WHAT IT WHAT
WOULD BE ANALOGOUS TO CALIFORNIA
ESSENTIALLY WE'RE SEEING THIS.
COULD BE OUR COASTAL COMMUNITIES
ARE FOREST OUR WETLANDS AS WE
MOVE FORWARD TO TRYING TO
ADDRESS.
HOW DO WE FIRST PROTECT OUR
NATURAL INFRASTRUCTURE THAT'S
ALREADY IN PLACE TO PROTECT IN A
WAY WHERE WILL BE MUCH MORE
SMART WITH OUR MONEY?
I'M ALSO PROUD TO BE A MEMBER.
OF THE GOVERNOR'S STRIKE TEAM
THAT MEETS WEEKLY AND PARTNER
WITH THE GOVERNOR AND HIS
ADMINISTRATION HOW TO PREPARE
FOR CONTINUED WILDFIRES.
I HAVE ASKED LEADERS IN THE
INSURANCE INDUSTRY TO JOIN ME IN
THE FIGHT AGAINST EXTREME
DISASTERS LINK TO CLIMATE CHANGE
WE NEED A BOLD ACTION TO ENSURE
COMMUNITIES ADAPT AND A
RESILIENT.
THERE IS NO OTHER INDUSTRY THAT
HAS THE NECESSARY EXPERTISE TO
ENSURE THAT CALIFORNIA IS
PREPARED TO MITIGATE REDUCE REST
FOR COMMUNITIES THE ENVIRONMENT.
AND OUR ENVIRONMENT.
OF COURSE I CANNOT BE HERE
WITHOUT TALKING ABOUT HEALTHCARE.
IN THE WORLD OF HEALTH CARE THE
NATIONAL BATTLES ARE DRAWN OVER
FINDING SOLUTIONS TO THE HIGH
COST OF HEALTH CARE INSURANCE
AND INCREASING COST. TO
PROVIDING MEDICAL CARE SAID
THOUSANDS OF HUNDREDS OF
THOUSANDS OF CALIFORNIANS.
I AM GOVERNOR NEWSOME'S PARTNER
IN HIS SHARED VISION FOR A
CALIFORNIA FOR ALL.
I JOIN MANY OTHERS IN TAKING A
STAND AGAINST THIS SAID CURRENT
FEDERAL MINISTRATION.
AS USE OF REGULATORY AUTHORITY
TO UNDERMINE THE AFFORDABLE CARE
ACT AND THEIR ACTIONS THAT MAKE.
HEALTH INSURANCE.
COVERAGE LESS AFFORDABLE LIMIT
BENEFITS AND COVERAGE AND REALLY
CHIP AWAY OF THE AXIS OF
REPRODUCTIVE HEALTH SERVICES.
I'M ON THE SIDE OF INCREASING
ACCESS TO HEALTH CARE AS YOU
KNOW THE WORK THAT I'VE DONE IN
THE LEGISLATURE TO DO THAT.
REDUCE THE COST OF PRESCRIPTION
DRUGS COVERING MORE PEOPLE
INCLUDING ARE UNDOCUMENTED
IMMIGRANTS TWO BROUGHT IN THE
RISK POOL.
INCREASING SUBSIDIES FOR WORKING
PEOPLE AFFORD TO BUY HEALTH
INSURANCE.
INNOVATION INNOVATION IS KEY AS
WE MOVE FORWARD AS WE COME FROM
FRAUD AND CLIMATE CHANGE KEEPING
A STRONG MARKET PLACE IS ALSO
OUR TOP PRIORITY.
CALIFORNIA'S NEED A COMPETITOR
NEED COMPETITION AND CHOICE TO
KEEP RATES LOW AND GIVE YOU MORE
OPTIONS FOR COVERAGE.
I'M A TO Z. ASK ABOUT THE
PROMISE OF WHAT TECHNOLOGY CAN
BRING TO THE INSURANCE MARKET
PLACE WE NEED TO EMBRACE NEW
TECHNOLOGIES TO IMPROVE ACCESS
AFFORDABILITY.
PROTECTING PRIVACY AND ALLOWING
INNOVATION TO TRANSFORM THIS
INDUSTRY.
IN MY IN MY VIEW THE AGE OF
INSURANCE INNOVATION HAS ARRIVED
THE DEPARTMENT HAS ALREADY
APPROVED A NUMBER OF INNOVATIVE
INSURNCE PRODUCTS INCLUDING ONE
FOR AUTO INSURANCE ANOTHER FOR
LIFE.
TODAY CONSUMERS CAN FILL IN
MANAGER CLAIM ONLINE THING THEM
TIME.
AND ENSURE TIME AND MONEY AS
WELL CLEARLY THE TIME HAS COME
FOR CONSUMERS TO CONDUCT MORE
INSURANCE TRANSACTIONS ONLINE.
IMAGINE BEING ABLE TO PROVIDE
YOUR PROOF OF INSURANCE FOR LAW
ENFORCEMENT THROUGH AN APP ON
YOUR PHONE WITH CONFIDENCE THAT
YOUR PERSONAL INFORMATION IS
SECURE.
A CONSUMER CAN USE THEIR
SMARTPHONE TO CHECK IF THEIR
PROFESSIONAL THEY'RE HIRING HAS
A VALID WORKERS COMPENSATION
INSURANCE.
INNOVATIVE INSURANCE PRODUCTS
WILL ALSO HAVE OPPORTUNITIES FOR
BUSINESSES TO STREAMLINE THEIR
OPPORTUNITY THE OPERATION AND
LOWER THE COST THAT WE OF ONLY
STARTED TO EXPLORE.
AGAIN THESE ARE ALL ISSUES THAT
ARE NEW TO WEST WE FEEL WE
SHOULD BE ABLE TO OPEN UP SOME
PART OF OUR MARKET TO BE ABLE TO
ALLOW FOR THIS INNOVATION TO
HAPPEN.
CALIFORNIA SHOULD BE LEADING AN
INNOVATION AND NOT WAITING FOR
OTHER STATES AS IT COMES TO IN A
MEETING INCREASING -- NEW
PRODUCTS IN THE INSURANCE
INDUSTRY A AND IT'S TIME FOR US
TO ALLOW THESE INNOVATIONS.
THAT HELP US DISRUPTIVE YOU KNOW
CAN A JGGERNAUT OF AN AND OF
INDUSTRY.
WHICH WE KNOW WOULD GIVE
CONSUMERS BETTER OPTIONS MORE
INNOVATIVE PRODUCTS PROTECT
THEIR PRIVACY AND GIVE US MORE
OPTIONS AS WE MOVE FORWARD --
AGAIN ONE OF STRESS THE
IMPORTANCE OF THE GOVERNING
BOARD EVER CITIES AND OUR
INSURANCE MARKET WE'RE GOING TO
CONTINUE.
TO ADDRESS THIS ISSUE IN A
COURSE THE DEPARTMENT CURRENT
SUPPLIER DIVERSITY SURVEY ASKS
INSURERS HOW MUCH THEY SPENDING
CONTRACTS AND DIVERSE BUSINESSES
A SOMETHING WE'RE GOING TO
CONTINUE TO TRACK.
IN TWO THOUSAND SEVENTEEN INCHES
COMPANIES REPORTED SPENDING ONE
POINT EIGHT BILLION WITH
CALIFORNIA DIVERSE BUSINESS
ENTERPRISES WE WANT TO CONTINUE.
TO EXPAND ON THIS PROGRAM THE
CALIFORNIA LOW COST AUTO
INSURANCE PROGRAM AND THANK YOU --
CHAIRWOMAN RUBIO -- WE'RE
LOOKING FORWARD WE'RE LOOKING AT
WAYS TO EXPAND AND IMPROVE THE
CURRENT CALIFORNIA LOW COST AUTO
INSURANCE PROGRAM WHICH HAS BEEN
AROUND SINCE.
NINETEEN NINETY NINE CALIFORNIA
LAW REQUIRES ALL DRIVERS AND
OWNERS OF VEHICLES WITHIN THE
STATE TO MEET -- AND MAINTAIN
FINANCIAL RESPONSIBILITY IN
ORDER TO DRIVE UP OR REGISTER
THE CAR MOST DRIVERS THE VEHICLE
OWNERS MEET THIS REQUIREMENT BY
CARING LIABILITY INSURANCE.
COVERAGE OF AT LEAST FIFTEEN
THOUSAND DOLLARS PER PERSON IN
CASE OF A BODILY INJURY OR DEATH
UP TO THIRTY THOUSAND PER
ACCIDENT AND FIVE THOUSAND FOR
PROPERTY DAMAGE. FOR QUALIFIED
LOW INCOME CUSTOMERS
CALIFORNIA'S LOW COST AUTO
INSURANCE PROGRAM HAS EXISTED TO
HELP OUR DOUBLE BORDER A MEET
THE STATE'S FINANCIAL
RESPONSIBILITY LAWS.
AT AFFORDABLE RATES ABOUT
NINETEEN THOUSAND DRIVERS ARE
CURRENTLY ENROLLED IN THE LOW
COST AUTO INSURANCE PROGRAM AND
OVER A HUNDRED THIRTY THOUSAND
CONSUMERS.
HAVE BEEN SERVED BY THE PROGRAM
SINCE ITS INCEPTION.
MANY VULNERABLE KINDS --
CONSUMERS DEPEND ON THIS PROGRAM
FOR COVERAGE SO THAT THEY MAY GO
TO WORK TRY THEIR CHILDREN'S
SCHOOL OTHERWISE WITHOUT THE
PROGRAM THERE MAY NOT BE
ELIGIBLE TO REGISTER.
AND LAWFULLY DRIVE THEIR
VEHICLES SO WE'RE WORKING WITH
THE CHAIR WOMAN TO ADDRESS THESE
UNIQUE ADVANTAGES AND JUST IN
CLOSING.
I JUST WANNA LET YOU KNOW WE'RE
GONNA RAMP UP OUR OUTREACH
EFFORTS -- WE ARE HIRING MORE
FLKS TO MAKE XIN ONLY WE RAMP
UP ON OUR OUTREACH BUT THAT WE
COORDINATE WITH THE LEGISLATURE
A LOT MORE.
THAT WE UTILIZE OUR DISTRICT
OFFICES AS A WAY TO NOT ONLY
TALK ABOUT THE THESE PROGRAMS
THAT WE HAVE.
AND ESPECIALLY WHEN IT COMES TO
FRAUD AND IF FOLKS FEEL THAT THE
VICTIMS OF FRAUD THAT WE ASSESS
THEM THAT WE ARE ABLE TO GET
BACK TO ME AS QUICKLY AS
POSSIBLE WELL FORTUNATELY AGAIN
CALIFORNIA IS GROUND ZERO TO
THIS OUR SENIORS.
ARE MONOLINGUAL IMMIGRANT
COMMUNITIES CONTINUE TO BE
VICTIMIZED AND SO WE WANT TO
UTILIZE YOU ARE AS AN
OPPORTUNITY TO ENGAGE THE
DEPARTMENT TO WORK WITH US.
AS WE CONTINUE TO LEAD THESE
OUTREACH EFFORTS AGAIN WE'RE
GOING TO CONTINUE TO BE IN THE
AREAS THAT HAVE BEEN AFFECTED BY
THESE WILDFIRES BY THESE MUD
SLIDES -- TO CONTINUE LET THEM
KNOW THAT WE ARE THERE TO HELP
THEM TO MAKE THEM.
COMFORTABLE WITH THE DECISIONS
ARE MAKING AGAIN THESE ARE
ISSUES AS I'VE SEEN NOW AFTER
THREE OF THESE -- OUT REACH
HEARINGS AND WORKSHOPS AGAIN
PEOPLE ARE MAKING VERY TOUGH
DECISIONS UNDER VERY VERY VERY
DIFFICULT CIRCUMSTANCES -- I
HAVE TO SAY WHAT ONE THING WE
DID IN TERMS OF BEING CREATIVE
AS WE ACTUALLY BROUGHT THE
DEPARTMENT OF MANAGED CARE. TO
MAKE SURE THAT WE PROVIDE MENTAL
HEALTH SERVICES FOR A LOT OF
THESE FOLKS.
A LOT OF THE CONVERSATIONS WE'VE
BEEN HAVING IS HOW DO I TALK TO
MY CHILD.
HOW DO I ASSIST MY CHILDREN THAT
CAN NO LONGER SLEEP AT NIGHT
BECAUSE ARE AFRAID THAT ANOTHER
FIRE OR IMPENDING DISASTER MY
COMP?
THESE ARE ALL UNIQUE ISSUES THAT
WE NEED TO CONTINUE TO ADDRESS
AS WE HELP CALIFORNIANS REBUILD
AND NOT ONLY HOW TO WE PROTECT
THEM HOW DO WE MITIGATE FROM
FUTURE.
DISASTERS AND THEN ALLOW THEM TO
REBUILD IN THE COMMUNITIES THAT
THEY CHOOSE TO LIVE BACK IN SO.
I WANT TO THANK YOU FOR YOUR
TIME THIS IS A AS YOU CAN SEE
IT'S BEEN A VERY CHALLENGING
NINETY DAYS BUT IT'S SOMETHING
THAT.
IS IMPORTANT FOR US AS WE
CONTINUE TO MAKE SURE PEOPLE
HELP HELP THEM REBUILD AND SO
I'M GONNA LOOK TO YOU ALL AGAIN
TO YOUR IDEAS.
ARE LOOK FOR TO ENGAGE THE
LEGISLATURE -- IN A WAY THAT WE
CAN WORK TOGETHER AS WE MOVE
FORWARD TO ADDRESS THESE ISSUES
FOR CALIFORNIANS THANK YOU FOR
TIME.
THANK YOU COMMISSIONER WELL
FIRST OF ALL THANK YOU I KNOW
THAT YOUR TIME IS VERY LIMITED
IN YOUR BUSY GOING UP AND DOWN
THE STATE SO WE APPRECIATE YOU
TAKING THE TIME TO COME -- I
HAVE A A COUPLE OF QUESTIONS FOR
YOU FIRST RIGHT NOW THAT YOU
MENTION YOUR PART OF THE STRIKE
TEAM FOR THE GOVERNOR.
IS THERE -- CAN YOU GIVE US A
SENSE OF WHAT ARE LIKE THE TOP
ISSUES YOU'RE DISCUSSING AND IS
THERE A TIME LINE IN TERMS OF
COMING UP WITH SOLUTIONS ARE IS
IS GONNA BE AN ON GOING -- TEAM.
SO WE DEFINITELY SEE THIS WELL
THERE'S MULTIPLE FACETS TO THE
STRIKE TEAM RIGHT WE WOULD LOOK
AT THERE'S A GROUP LOOKING AT
THE UTILITIES.
I'M WORKING ON THE INSURANCE
SIDE UP ON THE INSURANCE SIDE
WE'RE LOOKING AT AFFORDABILITY.
AVAILABILITY OF INSURANCE UP
REALLY HAVING AN HONEST DIALOGUE
ABOUT.
HOW ARE WE GONNA MOVE FORWARD
WHEN WE TALK ABOUT FUTURE LAND
USE IN CERTAIN COMMUNITIES?
AND THE FACT THAT WE NEED TO
COME UP WITH SOME INNOVATIVE
PRODUCTS WHEN IT COMES.
TO INSURING THAT WE HAVE
AVAILABILITY OF INSURANCE BUT
YOU'RE CLEAR ARE FOLKS WHO ARE
IN THIS URBAN WILDLIFE INTERFACE.
AND SO THESE ARE THE
CONVERSATIONS WERE HAVING OF
COURSE IS TO BE ONGOING WE ARE
GOING TO BE RELEASING OUR
RECOMMENDATIONS -- AND THEN
APPROACHING YOU ARE AS NEW
FORWARD WITH POSSIBLE
LEGISLATION OR WORKING IN THE
BUDGET. TO GET US TO A POINT
WHERE -- WE'RE WORKING ON THESE
CRITICAL ISSUES ANOTHER BIG
ISSUE IS.
FOLKS MAY NOT MAY MAY HAVE
INSURANCE BUT THEY'RE COMPLETELY
UNDERINSURED HOW DO WE GET OUT
THERE TO HAVE THAT CONVERSATION
WITH CONSUMERS I UNDERSTAND THAT
WHEN YOU'RE BUYING YOUR FIRST
HOME -- THE AGENT WANTS TO MAKE
A SALE YOU NEED TO BUY THE
INSURANCE YOU NEED.
BUT I WILL POINT TO WE
COMMUNICATE WITH -- THE CONSUMER
THAT THERE STILL MAY BE UNDER
INSURED SHOULD A CATASTROPHE
HAPPEN WHAT YOU GOING TO BE
COVERED FOR AND QUITE FRANKLY
LOOKING AT THE IDEA OF HOW DO WE
TALK TO OUR CALIFORNIANS ABOUT.
REVISITING THEIR POLICIES HOW DO
YOU UNDERSTAND WHAT'S IN YOUR
POLICY AND YOU KNOW I JUST DID
THIS WITH MY OWN PARENTS AND THE
HESITATION FOR THEM TO EVEN
BRING OUT THE DOCUMENTS. TO GO
OVER ALL THESE YOU KNOW PAGES
ABOUT WHAT'S REALLY IN THE
POLICY IS SOMETHING THAT WE WANT
TO TALK ABOUT DEPARTMENT HOW DO
WE STREAMLINE STREAMLINE THIS.
HOW DO WE PUT THIS IN BASIC
ENGLISH FOR FOLKS TO UNDERSTAND
AND THIS IS ANOTHER WAY THAT
WE'RE PUSHING?
ON THE DEPARTMENT -- HELPLESS
STREAMLINED THESE DOCUMENTS HOW
CAN WE USE TECHNOLOGY TO
MODERNIZE -- THE NUMBER OF
DOCUMENTS THAT ARE THAT ARE
BEING OUT THERE AND THEN HOW DO
WE HOW THE CONVERSATION.
WITH CALIFORNIA'S ABOUT HOW DO
YOU RE VISIT YOUR POLICY.
TRY TO TAKE AWAY THE STIGMA OF
HAVING TO GO THROUGH THAT AGAIN
A LOT OF CALIFORNIANS WE'VE
HEARD YOU KNOW I PAY MY POLICY
AND I AM ASSUMING I'M COVERED I
DON'T WANT TO THINK ABOUT EVER
AGAIN.
WE TWO HUNDRED TO IS TO FIND
THAT AND AND BRING THEM BACK TO
REALLY UNDERSTANDING WHAT THE
COVERED AND WHAT THEY SHOULD BE.
EXPECTING GIVEN IN THE OF FROM
COMMUNITY.
ELEVEN THANK YOU FOR THAT WELL
FIRST OF ALL THANK YOU FOR REAP
A PLACING FOCUS ON PORTABLE
COMMUNITIES AS YOU MENTION YOUR
PARENTS.
YOU KNOW MY PARENTS HE YOU
HAPPEN TO FORMALLY REPRESENT
THEM -- BUT THANK YOU FOR FOR
FOCUSING ON THAT AND IT IS SAW
SOMETHING THAT DOUBT OUR
EXPOSURE LATINO COMMUNITY DEALS
WITH THE OR THEY'RE AFRAID OF
PAPERWORK.
THEY DON'T UNDERSTANDING SO
THANK YOU FOR MAKING OUT OF
FOCUS -- I HAVE ANOTHER QUESTION
IN TERMS OF OUR CHANGING
INDUSTRIES -- I'M CURIOUS OF
WHAT IS A CONVERSATION ABOUT
CANNABIS I KNOW THAT WE HAVE
COVERAGE FOR EVERYTHING AND
BEING THAT IT'S A NEW INDUSTRY
HOW DO YOU QUANTIFY AND HOW DO
YOU ENSURE CAN YOU TELL ME WHAT
DISCUSSIONS WERE HAVING AROUND
THAT.
ABSOLUTELY THIS IS.
A VERY IMPORTANT DISCUSSION THAT
WE BEGAN TO HAVE WHEN IT COMES
TO HOW DO WE ENSURE.
OUR CANNABIS INDUSTRY EVERYTHING
FROM PRODUCT LIABILITY WORKERS
COMPENSATION YOU NAME IT -- THEY
NEED INSURANCE PRODUCTS TO BE
ABLE TO AGAIN ENSURE THEIR THEIR
PRODUCT THERE THERE'S BEEN A
COUPLE OF INSURANCE COMPANIES
AND HAVE ENTERED.
INTO THE THIS INDUSTRY THE
NUMBER ONE PUSH BACK THAT I'M
GETTING AS I'M HAVING
CONVERSATIONS WITH WITH YOU KNOW
THE THE BIG INSURANCE COMPANIES.
ARE THE FACT THAT A LOT OF THE
TRANSACTIONS ARE STILL BEING
DONE IN CASH.
AND THAT WE NEED TO FIND A WAY
TO BANK THIS IS WHY WE'RE
WORKING WITH OUR STATE TREASURER
TO FIGURE OUT WAYS HOW WE BANK
THE INDUSTRY SO THAT IT COULD BE
EASIER FOR THEM. TO ACTUALLY
PROVIDE THE PAYMENTS TO GET THE
INSURANCE THEY NEED -- WHAT OUT
THERE -- TALKING ABOUT THIS
ISSUE I ACTUALLY LEAD TO WORK.
FOR THE TASK FORCE AROUND THIS
AT THE NATIONAL INSURANCE
COMMISSIONERS ASSOCIATION WE'RE
GONNA BE MEETING AND A COUPLE
DAYS AS YOU KNOW IN ORLANDO --
TO HAVE THESE DISCUSSIONS AGAIN
AROUND THE COUNTRY HOW DO WE
WORK WITH THE FEDERAL GOVERNMENT.
FOR THOSE STATES THAT HAVE READY
PASSED THE THESE INITIATIVES. TO
ALLOW US TO BANK -- THE THE THE
PROFITS AND SALES OF OF THIS
INDUSTRY SO THAT THEY CAN HAVE
THE PROPER APPROPRIATE INSURANCE
THAT THEY NEED TO BE ABLE TO RUN
A BUSINESS SOLD.
OUT IT IS A MAJOR ISSUE IT'S
SOMETHING THAT I'M LEADING AT
THE NATIONAL LEVEL WE'RE GOING
TO CONTINUE.
TO OUR OUTREACH TO NOT ONLY OUR
FEDERAL PARTNERS BUT WITH OUR
STATE PARTNERS AS WE CONTINUE TO
FIGURE OUT HOW DO WE GET THIS
INDUSTRY BACKED.
THANK YOU FOR THAT JUST -- YOU
KNOW WHENEVER YOU GET
INFORMATION MAKE SURE THAT YOU
ARE SEEN AS YOU CAN I KNOW WE'RE
GETTING A LOT OF QUESTIONS ARE
CONCERNING THAT PARTICULAR ISSUE.
NOW I WOULD LIKE TO OPEN IT UP
FOR ANY COMMITTEE MEMBERS HAVE
ANY QUESTIONS.
SENATOR DODD COMMISSIONER --
CONGRATULATIONS ON YOUR WORK AND
PLEASURE TO BE ABLE TO WORK WITH
YOU ON OUR OUR BILL GOING.
FOR YOU KNOW -- I'M SEEING IN MY
DISTRICT -- A LOT OF INSURANCE
POLICIES THAT -- YOU KNOW
PARTICULARLY.
WHAT THROUGHOUT SADDAM OF OUR
FOR EXAMPLE SNOWMEN SNOW VALLEY
ARE JUST ARBITRARILY BEING
CANCELED?
NOW WE CAN UNDERSTAND AND I'VE
TALKED TO SOME INSURANCE PEOPLE
SOMETIMES INSURANCE COMPANIES OR
OVER WAITED.
IN TERMS OF THE THE AMOUNT OF
POLICIES THEY HAVE AN
FIRESTONE'S VERSUS.
YOU KNOW PERHAPS URBAN AREAS I
GET THAT.
BUT I GUESS -- YOUR MIGHT MY
QUESTION IS THAT I I I'VE.
I WONDER IF YOUR OFFICE COULD
CHECK INTO THIS.
BECAUSE UNLIKE OTHER AREAS WHEN
THEY DO A BY ZIP CODE.
YEAH THE SMALLER COMMUNITIES IN
RURAL COMMUNITIES HAVE LIKE ONE
ZIP CODE AND IT'S EVERYBODY.
IN IT DOESN'T REALLY.
ACCOUNT -- FOR PROPERTIES THAT
HAVE DEFENSIBLE SPACE LOTS OF
DEFENSIBLE SPACE WE TOURED A
COUPLE THOSE HOMES THAT -- YOU
HAVE LIKE ACRES AND ACRES AND
ACRES OF VINEYARDS AROUND THEM
AND WEREN'T BURNED BECAUSE THE
VINEYARDS.
BUTTON YOU'RE NOW THEY'RE
LOOKING AT THE FAIR PLAN BECAUSE
THEY CAN'T GET ANYBODY.
TO ENSURE THAT MEANT SO I I
GUESS I WONDER.
IF INSURANCE COMPANIES THAT HAVE
THESE TYPE OF PRACTICES THAT.
NOT BY MY REVIEW BY THE
INSURANCE COMMISSIONER REVIEW
SHOULD BE ALLOWED.
TO I TAKE ALL THE THE CREAM THE
TO THE URBAN AREAS THAT IS NOT
SUBJECT TO THE FIRES THAT --
YEAH WE HAVE SO I GET RISK I GET
THE FACT THAT -- THEY SHOULD BE
ABLE TO INCREASE RATES IF IF THE
REST WERE HIGHER BUT I'M
WONDERING IF YOU HAVE ANY
THOUGHTS ON THAT AND WHAT WE DO
GOING FORWARD.
FOR PEOPLE THAT ARE REALLY
WORKING HARD TO TRY TO MITIGATE
THE REST FOR THAT THEIR
THEMSELVES IN THE COMPANY
ABSOLUTELY SENATOR OF C. RIGHT
WE'RE SEEING AN UPTICK IN OUR
RENEWALS.
AND PARTICULARLY IN THESE THESE
IN HIGH RISK AREAS IT IS PART OF
THE CONVERSATIONS THAT WE'RE
HAVING THAT WITH THE GOVERNOR'S
OFFICE.
IN TERMS OF OUR RECOMMENDATIONS
I WILL BE éEASING
FEEL THAT LOOK WE NEED TO EVEN
LET'S BE HONEST EVEN THE FAIR
PLAN IS NOT GONNA BE AFFORDABLE
FOR A LOT OF THESE FOLKS.
AND SO THE NEED FOR US TO CREATE
ADDITIONAL OUR PRODUCTS THAT ARE
GOING TO BE AFFORDABLE THERE ARE
GONNA BE CREATIVE IN TERMS OF
HOW DO WE ARE NOT ONLY.
WORK WITH THE LOCAL CITIES TO
MAKE SURE THAT THE CITIES HAVE A
CITY WIDE -- PROGRAM IN TERMS OF
HOW DO THEY CREATE MARIA
DEFENSIBLE SPACE BUT WHAT REALLY
PRIORITIZE IN TERMS OF HOW WE
MANAGE THEIR OWN RISK.
SO THAT MOVING FORWARD -- WE GET
TO A POINT WHERE IT'S NOT ONLY
US WORKING WITH THE INDIVIDUAL
HOMEOWNERS BUT THE CITY AS WELL
AS THE ACTUAL PLAN -- WE ARE WE
ARE HAVING THESE DISCUSSIONS
AGAIN WE NEED TALKS ARE ACTUALLY
ALSO.
HAVE THAT ON HIS CONVERSATION
ABOUT LAND USE.
AND AND THAT RESPOND WHO'S
RESPONSIBLE FOR MONITORING THAT
AND MAKING SURE THAT.
WHEN WE REBUILD WE REBUILD IN A
WAY THAT'S MUCH MORE REASONS IT
MUCH MORE RESILIENT?
AND THAT IS NOT GONNA CERTAINLY
YOU KNOW OUR BE OVERLY EXPENSIVE
WERE PUT FOLKS ARE NOT GONNA BE
ABLE. TO TO REBUILD BACK IN THE
COMMUNITIES SO THESE ARE THE
TOUGH CONVERSATIONS WERE HAVING
WITH THE STRIKE TEAM WE ARE
GOING TO BE ENGAGING THE
INSURANCE COMPANIES -- WE WANT
THEM TO COME WHAT THEIR
SOLUTIONS AS WELL ON WHAT THEIR
IDEAS WE'RE GONNA BE HAVING THAT
MEETING VERY SHORTLY -- BUT YOU
CAN REST ASSURED THAT THIS IS
ONE OF THE BIG ISSUES WE'RE
TALKING ABOUT.
WE KNOW THAT FOR A LOT OF OUR
VICTIMS AND SURVIVORS.
THE CURRENT MODELS AND CURRENT
PRODUCTS THAT WE HAVE.
I'M NOT GONNA BE AFFORDABLE.
AND SO HOW DO WE ADDRESS THAT
AND WE WOULD FIRST ONE ENGAGE
THE INDUSTRY TO FIGURE OUT WHAT
IDEAS THEY HAVE.
AND THEN WORK WITH THEM TO
FIGURE OUT HOW WE MOVE FORWARD
BUT I THINK THE CONVERSATION HAS
TO BE MUCH MORE COMPREHENSIVE
WHEN IT COMES.
TO CITY LAND USE ISSUES WHEN IT
COMES TO WHAT THE INSURANCE
PRODUCTS CURRENTLY ARE THAT WE
HAVE.
AND HOW DO WE WORK ON INNOVATIVE
PRODUCTS AND WHEN I SAY
INNOVATIVE PRODUCTS OUR PRODUCTS
ARE GOING TO HELP US ADDRESS.
THE NEED OF PROVIDING INSURANCE
IN THESE COMMUNITIES ARE WHAT
WE'RE SEEING IS.
ARE YOU SEEING FOLKS THAT HAVE
PARTIAL LOSSES.
WHO ARE LIKE TELLING US WORK
LOOK?
NOW I HAVE A PROPERTY HERE THAT
I'M NOT ONLY NOT COULD BE WILL
ENSURE.
THAT NOW IS A DROP IN PROPERTY
VALUE AND NOW THAT I'M STUCK
WITH.
AS OPPOSED TO FOLKS THAT HAVE
TOTAL LOSSES WHO CAN TAKE THEIR
AND I'M SURE YOU KNOW YOU'RE
YOU'RE SEEING THIS.
TAKE THEIR THEIR CLAIM MONEY AND
MOVE OUT OF THE COMMUNITY RIGHT
AND SO WHAT HAPPENS TO THOSE
PLOTS OF LAND THAT ARE NOW BEING
SOLD.
AT A MUCH LOWER RATE AND PEOPLE
ARE COMING IN BUYING THEM TO
THREE AT A TIME. TO REBUILD A
BIGGER HOUSE RIGHT SO WE'RE
SEEING THIS PHENOMENON HAPPEN IN
SANTA ROSA WERE WE'RE MONITORING
IT IN IN PARADISE -- BUT THESE
ARE THINGS THAT WERE COMES IS
THAT WE'RE HAVING I JUST WANT
YOU KNOW THAT WE'RE HAVING THOSE
DIALOGUES ONCE WE COME UP WITH
OUR RECOMMENDATIONS WE'RE GONNA
COME BACK TO THE LEGISLATURE.
PRESENT ON THOSE AND THEN HAVE A
MORE ROBUST CONVERSATION.
THE THE OTHER POINT IS IS
BECAUSE THIS DIFFICULT SITUATION
RIGHT IN THE CITY IT'S SINAMA.
THREE DOORS DOWN.
FROM THE FIRE STATION.
RIGHT COULD NOT GET A RENEWAL SO
I MEAN I I DON'T KNOW I YOU KNOW
THAT THEIR I APPRECIATE THE THE
OTHER COMMENTS THAT I LOOK
FORWARD TO HEARING ABOUT ZOODLES
ALL TO THE DISCUSSIONS YOU'RE
HAVING.
THANK YOU YOUR THANK YOU A
SENATOR BURGESS.
THANK CHAIRMAN ARM I THINK
SENATOR DODD PRESENTED TO A LOT
OF THE QUESTIONS THAT I WAS
GOING TO PRESENT TO YOU BUT ONCE
AGAIN THANK YOU FOR BEING HERE
THANK YOU FOR YOUR OPENING
COMMENTS.
I THINK MAYBE JUST TO JUST TO
ADD ON A LITTLE BIT.
I REPRESENT -- DISTRICT EIGHT
AND THAT'S WHEN THOSE VERY LARGE
DISTRICTS FROM DEATH VALLEY TO
SACRAMENTO TO INCLUDES A LOT OF
THOSE -- RURAL MOUNTAIN AND FOOT
HILL AREAS -- SO YOU CAN IMAGINE --
THE THE THE DIFFICULTY AS IT
PERTAINS TO FIRE SO I HAD A
COMMITTEE MEETING -- A COUPLE OF
MONTHS BACK IN -- TWELVE MY
COUNTY AND OF FOLKS THAT
ATTENDED WERE ASKING ME
OBVIOUSLY ABOUT INSURANCE
RELATED ISSUES.
AND WHAT THEY TOLD ME WAS.
THEY WERE UNABLE TO GET.
OUR INSURANCE.
EXCEPT FOR ONE ENTITY LLOYDS OF
LONDON IF I REMEMBER CORRECTLY
NO DOMESTIC -- CALIFORNIA ENTITY --
WAS WAS WAS PREPARED TO TO TOUCH
THEM THEN SOMEONE BROUGHT OUT IN
IN MADE AN ANALOGY -- BACK WHEN
WE HAD -- THE MANDATORY FLOOD
AND EARTHQUAKE AVAILABILITY --
ARE YOU SEEING IT GOING IN THAT
DIRECTION THAT.
IT THAT INDUSTRY THAT THE FOLKS
IN THE INDUSTRY WILL HAVE TO
PROVIDE.
COVERAGE IT IS WHETHER OR NOT
THE PREMIUMS ARE GOING TO BE --
REASONABLE.
RIGHT SENATOR WE WE WE'RE
DEFINITELY NOT.
THERE YET WHEN CRAFTED MANDATORY
INSURANCE I I JUST WANNA REMIND.
THE COMMITTEE THAT WE AT TO THE
NORTHRIDGE EARTHQUAKE.
AND WHAT ENDED UP HAPPENING IS
THE INSURANCE INDUSTRY PULLED
OUT.
OF EARTHQUAKE INSURANCE.
LEAVING US WITH THE CALIFORNIA
EARTHQUAKE AUTHORITY.
AND AND A POINT WHERE WE ONLY I
THINK WE'RE UP 211% OF TAKE IN
TERMS OF THIS PRODUCT.
SO WE'RE GONNA BE IN DIRE
STRAITS AND WHEN WE HAVE THE
NEXT BIG EARTHQUAKE.
SO WE DON'T WANT TO GET TO THAT
POINT THIS IS WHY.
WE'RE ENGAGING INDUSTRY TO BRING
THEIR SOLUTIONS BRING THEIR
IDEAS ABOUT HOW DO WE PROVIDE.
AFFORDABLE INSURANCE IN THESE
HIGH RISK AREA.
AND WE'RE HAVING THOSE DIALOGUES-NOW.
WE'RE HAVING A PART OF THE
STRIKE TEAM PART OF OF OUR
SUBCOMMITTEE.
THAT WE FEEL THAT WE CAN COME UP
WITH SOME RECOMMENDATIONS THAT
THE FACT IS CALIFORNIA IS THE
LARGEST.
INSURANCE MARKET IN THE COUNTRY
SHORT OF THEM ALL PULLING OUT OF
THE LARGEST MARKET AND QUITE
FRANKLY THE ENTIRE WESTERN.
COAST OF THE WESTERN PART OF THE
COUNTRY WHERE WE'RE SEEING THESE
FIRES CONTINUE TO HAPPEN.
I THINK THEY UNDERSTAND THE NEED
TO COME AT THE TABLE AND
ACTUALLY PUT SOME SKIN IN THE
GAME WHEN IT COMES TO ADDRESSING
THIS ISSUE.
WHAT I DO WANT TO OFFER YOU IS
WE MORE THAN HAPPY TO GO TO YOUR
DISTRICT?
BRING MY STAFF TO HAVE A
CONVERSATION WITH YOUR
CONSTITUENTS A LOT OF THE TIME
IS.
KNOWING WHERE TO LOOK ONCE YOU
GET NON RENEW OLD I'VE GIVEN YOU
ARE THE MULTIPLE OPTIONS ARE
CURRENTLY EXIST.
WE HEAR YOUR STATS STORY TIME
AND TIME AGAIN ABOUT LLOYD'S AND
SOME OF THE INTERNATIONAL
COMPANIES COMING AND STEPPING IN
AND WE'RE DEFINITELY GRATEFUL
FOR THAT.
BUT WE ALSO WANT TO MAKE SURE
THAT OUR DOMESTICS ARE.
YOU KNOW ARE ALSO IN HERE THE
PLANE BECAUSE WE WE NEED THEM WE
PLAN ON SEEING NEED A HEALTHY
INSURANCE MARKET. TO BE ABLE TO
GET THOSE CLAIMS PAID. FOR THOSE
SURVIVORS AND SO IT'S PROVIDING
THAT YOU KNOW UNIQUE BALANCE
THAT WILL.
WHICH ESSENTIALLY IS MY TASK.
SO MORE THAN HAPPY TO TO VISIT
YOUR DISTRICT.
HOW MUCH STUFF THERE AND ANSWER
SOME OF THE FANTASTIC?
ABSOLUTELY WE FIND IT VERY
HELPFUL ONCE WE ARE ENGAGE WITH
WITH THE CONSTITUENTS AND THEY
KNOW WHAT THEIR OPTIONS ARE AND
AND WE ACTUALLY BRING SOME OF
THOSE.
PICTURES WITH THEM HAVE A
DIALOGUE ABOUT NOT ONLY THE
CURRENT -- CURRENT PRODUCT YOU
HAVE BUT ALSO WHAT OTHER OPTIONS
ARE ONCE AGAIN RENEWED AND WE'RE
ALSO NOW TRACKING THAT AS A
DEPARTMENT I PASSED LEGISLATION
LAST YEAR. TO MAKE SURE THAT
MOVING FORWARD WE'RE TRACKING
WHERE WHAT ZIP CODES.
AND WHAT PART OF THE STATE ARE
PEOPLE NOT GETTING RENEWED SO
THEN THE DEPARTMENT CAN QUICKLY
GO AND AND ASSESS AND BE ABLE TO
GIVE [inaudible]
CALIFORNIANS OPTIONS.
THANK YOU COMMISSIONER THANK YOU
THANK YOU ANY MORE QUESTIONS.
CNN THANK YOU SO MUCH
COMMISSIONER FRANK YOU CRESCENTA
TIME OUT OF YOUR DAY TO COME AND
VISIT US AND DON'T FORGET TO
COME AGAIN SAY HELLO.
THANK YOU -- THE NOW WILL BE
MOVING UP UP FOR TO OUR PANEL
NUMBER TWO WHICH IS INSURANCE
GUARANTEE ASSOCIATIONS.
THE INSURANCE GUARANTEE
ASSOCIATION HE CLAIMS WHEN
INSURE BECOMES INSOLVENT EVERY
ADMITTED INSURER IS A MEMBER IN
MAY BE ASSESSED IN ORDER TO
COLLECT THE FUNDS TO PAY.
THE CLAIMS TODAY WE HAVE
BRADFORD ROBERT EXECUTIVE
DIRECTOR OF THE CALIFORNIA
INSURANCE GUARANTY ASSOCIATION
I THINK IT'S AN ASSOCIATION OF
PROPERTY AND CASUALTY INSURERS
THAT PROVIDE A SUCH AS AUTO
INSURANCE HOMEOWNER INSURANCE
COMMERCIAL COVERAGE AND WORKERS
COMPENSATION AND WITH HIM WE
HAVE TAUGHT.
CáC FOR EXECUTIVE DIRECTOR OF
THE CALIFORNIA LIFE.
HEALTH INSURANCE GUARANTY
ASSOCIATION WHICH IS AN
ASSOCIATION OF LIFE HEALTH AND
DISABILITY INSURANCE THIS COVERS
LIFE HEALTH DISABILITY INCOME
AND LONG TERM.
CARE INSURANCE WELCOME GENTLEMEN
TO A WITH THAT YOU HAVE THE
FLOOR THANK YOU [inaudible]
YOUR WOMAN.
I NEED TO TOUCH SOME YOU HEAR ME
[inaudible]
OKAY.
SO WHAT IS YOU IS YOU MENTIONED
CIGNA IS AN ORGANIZATION THAT IS
A SAFETY NET FOR THE INSURANCE
INDUSTRY.
IN THAT WE PROVIDE COVERAGE FOR
DEPLOYMENTS IS.
VERY BECOMES INSOLVENT.
IS THIS YOUR CELEBRATING ITS
FIFTIETH ANNIVERSARY WE WERE
CREATED BY STATUTE HERE IN
CALIFORNIA IN NINETEEN SIXTY
NINE SO THIS IS FIFTY YEARS OF
SERVICE. TO THE CITIZENS AND
CONSUMERS OF CALIFORNIA.
WE HAVE A ABOUT A HUNDRED AND
FORTY DEDICATED INSURANCE
PROFESSIONALS THE WORK WITH ME
IN ONE DALE WHO HANDLE CLAIMS
FOR THESE FOLKS THAT -- THAT
HAVE WHAT INSURANCE FROM THE
WRONG CARRIER.
WE HAVE -- TODAY ABOUT A A
NEARLY EVEN MIX OF CLAIMS
BETWEEN WORKERS COMPENSATION AND
AUTO HOMEOWNER AND LIABILITY
CLAIMS.
WITH ABOUT ONE THOUSAND FIVE
HUNDRED WORK COMP CLAIMS AND
ABOUTSOME MORE NORTH THE
THIRTEEN THOUSAND AUTO AND
HOMEOWNERS CLAIMS.
WE ARE THE LARGEST GUARANTEE
FUND IN THE U. S. LIKE A LOT OF
THINGS IN CALIFORNIA WHERE THE
LARGEST AND AND WE LOOK LIKE TO
BELIEVE WE'RETHE BEST THERE IS
AN ASSOCIATION OF ALL OF THE
GUARANTEE FUNDS AROUND THE
COUNTRY SIMILARLY SITUATED
SITUATED.
TO CALIFORNIA WE ARE AND WHAT
THE LARGEST IN THAT ORGANIZATION
AND WE ARE ALSO ONE OF THE
LEADERS OF THE NATIONAL
OGANIZATION OF FUNDS AS WELL --
I WAS ASKED TO TALK ABOUT KIND
OF THE HISTORY OF CLAIMS -- AT
THE AT THE GUARANTEE ASSOCIATION
FOR PROPER PROPERTY CASUALLY
PERSPECTIVE IN THE LATE SIXTIES
EARLY SEVENTIES IN THIS COUNTRY
WHEN THE GURNEY FUNDS WERE
ESTABLISHED.
MOST FOLKS WERE THINKING ABOUT
NONSTANDARD AUTOMOBILE INSURANCE
COMPANIES'S WHERE THE WHERE THE
ACTION WOULD COME. FOR LACK OF A
BETTER TERM AND FOR A COUPLE OF
DECADES THAT WAS THE CASE.
OVER THE COURSE OF TIME WE
REALLY MORPHED INTO WE BEING ALL
THE GURNEY FUNDS AND HANDLING
MOSTLY WORKERS COMPENSATION
CLAIMS.
THERE WAS A A CRISIS OF SORTS
HEARING CALIFORNIANSLONG PRO
PRECEDED MY TIME HERE -- BUT IN
THE LATE THE IN THE LATE
NINETIES THE MARKET SHIFTED IN
AND THE YEARS TWO THOUSAND AND
TWO THOUSAND AND ONE THERE WERE
TWENTY SIX INSOLVENCY IS A
WORKERS COMPENSATION COMPANIES.
PART OF THAT TIME.
US A GOOD CARRIED ABOUT FIVE
THOUSAND CLAIMS AND WE PAID
ABOUT WORKERS COMPENSATION
CLAIMS IN THEIR PAY AND ARE
PENDING.
AT ABOUT FIFTY MILLION DOLLARS A
YEAR AND WORKERS COMPENSATION
BENEFITS TO INJURED WORKERS. TO
THE TWENTY SIX INSOLVENCY CLIMB
COG JUMPED FROM FIVE THOUSAND
CLAIMS TO OVER A HUNDRED
THOUSAND CLAIMS.
SIGO WENT FROM PAYING FIFTY
MILLION DOLLARS A YEAR IN
BENEFITS TO INJURED WORKERS. TWO
HUNDRED MILLION DOLLARS A MONTH.
AND SO THEY CREATED A A CRISIS
OF SORTS FROM AN ECONOMIC
PERSPECTIVE BECAUSE WE RELY ON
DOLLARS COMING FROM IN SOLVING
THE STATE'S AND FROM ASSESSMENTS
TO ACTIVE INSURERS IN ORDER TO
FUND.
THESE PLANS OF THOSE THOSE ARE
SOURCES OF REVENUE.
I'M IN THE MIDDLE TO THOUSANDS --
THERE WAS AN EMERGENCY CALL
PLACE TO THEN GOVERNOR --
GARAMENDI WHO HELPED US TO MAKE
SOME ADJUSTMENTS TO THE STATUTE
SO THAT WE COULD CONTINUE TO
FIND CLAIMS.
THROUGH THIS VERY DIFFICULT TIME
ECOND NEVER MISSED A PAYMENT TO
AN INJURED WORKER.
AND WE NEVER -- NEVER FAILED --
TO EXERCISE OUR RESPONSIBILITY --
THERE WAS A FOUR BILLION DOLLAR
DEFICIT OF WORKERS COMPENSATION
CLAIMS IN THE IN THE MID TWO
THOUSANDS.
THROUGH A SERIES OF INCEST OF
ASSESSMENTS AND A CHANGE IN OUR
STATUTE WHICH ALLOWED US TO
ISSUE BONDS.
WE WERE ABLE TO CONTINUE TO PAY
CLAIMS AND TODAY WE EXPENSIVE --
WE EXPERIENCE -- ENJOY --
HEALTHY SURPLUS AND OUR WORKERS
COMPENSATION ACCOUNT WE BELIEVE
FROM AN ACTUAL ORAL PERSPECTIVE
THAT GIVEN NO NEW INSOLVENCY AS
WE HAVE PLENTY OF FUNDS TO BE
ABLE -- TO TO BILL HANDEL ALL OF
OUR FUTURE OBLIGATIONS -- CIGNA
ASSESSED WORKERS COMPENSATION
CARRIERS FROM THE EARLY TWO
THOUSANDS UP UNTIL TWO THREE TWO
THOUSAND SEVENTEEN WE DID NOT
HAVE AN ASSESSMENT IN TWO
THOUSAND AND EIGHTEEN AND WE DO
NOT ANTICIPATE AN ASSESSMENT IN
TWO THOUSAND AND NINETEEN FOR
THE WORKERS COMPENSATION ACT NOW.
IN ADDITION TO WORKERS
COMPENSATION WE ALSO HANDLE AUTO
AND HOMEOWNERS AND ALL ANY OTHER
KIND OF PROPERTY AND CASUALTY
CLAIMS.
AND THE IRONICALLY AFTER A LONG%
PERIOD OF TIME A FAMILY WORKERS
COMPENSATION CLAIM THE LAST
THREE IN SOLVENT SEAS OF SORT OF
GONE BACK TO THE ROOTS OF THAT
TO NON STANDARD AUTO INSURANCE
CARRIERS THAT HAVE BECOME
INSOLVENT -- ONE OF THEM IN
TWENTY SIXTEEN WHICH PRESENTED
US WITH FIVE THOUSAND CLAIMS
TODAY -- THAT -- STATES THAT'S
WITH JUST A HUNDRED OPEN CLAIM
SO WE VIRTUALLY RETIRED ALL OF
THOSE CLAIMS IN A COUPLE YEARS --
IN TWO THOUSAND AND EIGHTEEN WE
RECEIVED A VERY LARGE
NONSTANDARD AUTOMOBILE
INSOLVENCY WITH NEARLY TWENTY
FIVE THOUSAND CLAIMS IN THE
FIRST YEAR OF THAT WE RETIRED
HALF OF THOSE CLAIMS SO WITH
CLOSE THOSE CLAIMS AND FOLKS
HAVE MOVED AROUND ABOUT THEIR
BUSINESS.
AND SO WE HAVE ABOUT TWELVE AND
A HALF THOUSAND OF THOSE CLAIMS
LEFT -- IN DECEMBER OF OF TWO
THOUSAND AND EIGHTEEN THE MERCED
PROPERTY AND CASUALTY COMPANY
WAS DECLARED INSOLVENT.
AS A RESULT OF THE CAMPFIRE UP
IN PARADISE AND MCGILL YEAH.
AND WE TOOK ON THAT OBLIGATION --
THE THE THE ORDER OF INSOLVENCY
WAS GIVEN ON MONDAY DECEMBER
THIRD IN THE AFTERNOON WE WERE
WRITING CHECKS TO THOSE -- THOSE
FOLKS WHO LOST THEIR HOMES THAT
FRIDAY.
THOSE ONE OF THE FINEST
TURNAROUNDS THAT THE
ORGANIZATION IS SEEN IN ITS
HISTORY OF BEING ABLE TO GET ON
TOP OF IT AND TAKE CARE OF THOSE
FOLKS.
AND REALLY GET IN THE GAP FOR
THEM.
SO IF THE CLOTHES MANAGER WOMAN
YOU KNOW WE EXIST SOLELY TO
SERVE CONSUMERS WHO HAVE NO
OTHER PLACE TO GO -- WE BELIEVE
IT'S A NOBLE MISSION AND AND I'M
VERY PASSIONATE ABOUT WHAT WE DO
AS ARE ALL OF OUR FOLKS SO.
THAT'S THE STORY OF SEGA.
THANK YOU VERY MUCH FOR THAT
TESTIMONY.
YEAH GOOD MORNING -- WOMAN RUBIO
AND MEMBERS COMMITTEE ON TOP
ACTOR AND I'M THE EXECUTIVE
DIRECTOR OF THE CALIFORNIA LIFE
AND HEALTH.
INSURANCE GUARANTY ASSOCIATION
AND IT'S A PLEASURE TO BE HERE
TO INTRODUCE YOU TO THINK KLAY
GOT.
THIS MORNING.
THE CALIFORNIA LIFE AND HEALTH
INSURANCE GUARANTEE ACT --
GRADING CLICK -- IS CODIFIED IN
TERMS CODE.
TEN SIXTY SEVEN AND CLICK UPPER
TAX CALIFORNIA LIFE HEALTH AND
ANNUITY POLICY HOLDERS AGAINST
THE FAILURE AND THE POOR
PERFORMANCE.
OF CONTRACTUAL OBLIGATIONS
BECAUSE OF IMPAIRMENT OR
INVOLVEMENT THE OF THE ISSUING
MEMBER INSURER. TO PROVIDE THIS
PROTECTION THE STATUTE REQUIRES
ALL CALIFORNIA DEPARTMENT OF
INSURANCE LIFE AND LIFE HEALTH
IN A NEW EIGHTY INSURERS. TO BE
CLEAR THE MEMBERS CLICK I HAVE
APPROXIMATELY SEVEN HUNDRED AND
FIFTY FIVE LIFE ANNUITY AND
HEALTH INSURANCE MEMBER
COMPANIES.
CLICK IT PAYS BENEFITS AND
COVERAGE AS AND CONTINUES
COVERAGE AS AN MEMBER COMPANIES
OF THE SENSATION ARE SUBJECT TO
ASSESSMENT.
THE PERSON TO PROVIDE THE
REQUISITE FUNDING TO CARRY OUT
ITS PURPOSES.
FIFTH CLICK IS INFECTION ON
JANUARY ONE NINETEEN NINETY FOUR
SO STATION HAS MADE MORE THAN
ONE POINT FOUR BILLION DOLLARS
IN CLAIMS AND RE INSURANCE
PAYMENTS THE CALIFORNIA POLICY
HOLDERS.
THIS STATUTES THAT.
WE GET BENEFIT LIMITS BASED ON
PRODUCT LINE.
AT PRESENT LIFE INSURANCE
BENEFITS ARE CAPPED AT THREE
HUNDRED THOUSAND DOLLARS A NEW
TEASER CAPPED AT TWO HUNDRED
FIFTY THOUSAND DOLLARS.
AND HEALTH AND LONG TERM CARE
BENEFITS FLUCTUATE IN CONCERT
WITH THE HEALTH COST COMPONENT
THE CONSUMER PRICE.
INDEX AND CURRENTLY ARE CAPTIVE
FIVE HUNDRED AND SEVENTY SIX
THOUSAND DOLLARS.
THAT'S THE SECOND HIGHEST CAP IN
THE COUNTRY.
MOST RECENTLY CLICK AS DEATH AND
CALL THE THREE HUNDRED AND
TWENTY FIVE MILLION DOLLAR
HEALTH LINE SSESSMENT FOR THE
PEN TREATING NETWORK AMERICA
INSURANCE COMPANY.
AN AMERICAN NETWORK INSURANCE
COMPANY LONG TERM CARE AND
SOLVENCY.
LAST YEAR WE GET PAID MORE THAN
FIFTY SEVEN MILLION DOLLARS IN
CLAIMS THE PANTRY AND ANNEX
POLICY HOLDERS.
CLICK AS AGGREGATE FUTURE COSTS
TO PROTECT CALIFORNIA POLICY
HOLDERS AND FIFTEEN OPEN AND
OFTEN THESE.
IS ESTIMATED TO BE A HUNDRED AND
TEN MILLION DOLLARS.
OUR STATUTES AUTHORIZES CLICK IT
TO AS SOUTH FOR LIFE HEALTH AND
ANNUITY INSURANCE INVOLVED IN
FAITH.
CLICK GET DETERMINES THAT THE
SUSPECT CAPACITY.
BY TAKING 2% AT THAT.
AVERAGE ASSESSABLE PREMIUM
WRITTEN IN CALIFORNIA OVER THE
THREE YEARS PRECEDING AND
INSOLVENCY.
SO USING THE TWO THOUSAND
FIFTEEN SIXTEEN AND SEVENTEEN
PREMIUM DATA.
LEAGUE IS TWO THOUSAND EIGHTEEN
AFFECTED ASSESSMENT CAPACITY.
BY LINE OF BUSINESS HOLES
APPROXIMATELY THREE HUNDRED AND
TWENTY ONE MILLION DOLLARS FOR
LIFE. THREE HUNDRED FIFTY SIX
MILLION DOLLARS FOR A NEW EIGHTY
AND THREE HUNDRED AND FOUR
MILLION DOLLARS FOR HEALTH.
RECENTLY SOME CALIFORNIA ARE
SIMPLY GO MEMBER HELP COMPANIES
HAVE BEGUN TO MOVE THEIR
BUSINESS FROM THAT -- DEPARTMENT
OF INSURANCE LICENSE TO THEIR
DEPARTMENT OF MANAGED HEALTHCARE
LIFE.
THE D. MH THE PREMIUM IS NOT
SUBJECT TO CLICK GET ASSESSMENT
AND POLICY HOLDERS TRANSITIONING
FROM COVERAGE UNDER A DEAL I
LICENSE.
THE DEPARTMENT MANAGED
HEALTHCARE LIFE AND NO LONGER
HAVE CLICK IS PROTECTION AGAINST
IMPAIRMENT OR INSOLVENCY.
AS A RESULT.
CLICK A SINGLE YEAR HEALTH
ASSESSMENT CAPACITY HAS REDUCED
FROM THREE HUNDRED AND SIX YOU
MILLION IN. 200-013-2200 NINETY
TWO MILLION IN.
TWO THOUSAND SEVENTEEN CURRENTLY
TWELVE MEMBERS MEMBER COMPANIES
SERVE ON THE BIG BOARD OF
DIRECTORS.
THE BOARD RECOGNIZES THE VERY
REAL BENEFIT OF BROADER
DIVERSITY OF BOTH IF THOSE BASED
AND BOARD MEMBER COMPANIES.
AND THE REPRESENTATIVE.
WE STRIVE TO DO SO THROUGH THE
DIVERSITY OF MEMBER COMPANIES
AND BY ACTIVELY BRINGING IN
PERSON MEMBER REPRESENT.
I'M BOARD MEMBER COMPANIES
REPRESENT LARGE AND SMALL
NATIONAL AND REGIONAL INSURERS
FROM THE LIFE NUDITY AND HEALTH
MARKETPLACE.
THE BOARD STRIVE TO WORK IN
CONCERT WITH INDIVIDUAL BOARD
MEMBER COMPANY DIVERSITY
INITIATIVE.
AND ACCORDANCE WITH THEIR
DIVERSITY OBJECTIVES IDENTIFIED
MAKE AVAILABLE AND TRAIN DIVERSE
EMPLOYEE EMPLOYEE REPRESENTATIVE.
WITH THE SUPPORT OF THE
CALIFORNIA DEPARTMENT OF
INSURANCE IN OUR MEMBER
COMPANIES. TO PROVIDE NEEDED
SECURITY FOR CALIFORNIA STIFF
AND AND IS WELL POSITIONED TO DO
SO INTO THE FUTURE.
CLICK HERE REMAINS FULLY ENGAGED
AND ACTIVE ASSOCIATION WORKING
DILIGENTLY THOUGHTFULLY
TRANSPARENTLY. TO PROTECT
CALIFORNIA POLICY HOLDERS.
WE APPRECIATE THE OPPORTUNITY TO
BE HERE THIS MORNING.
THANK YOU VERY MUCH FOR THAT
TESTIMONY.
I'M I'M A LITTLE CURIOUS ABOUT
WHAT YOU JUST EXPRESS I BELIEVE
YOU TALKED ABOUT YOU KNOW PEOPLE
SHIFTING TWENTY MODEL.
AND THE CAPACITY I DO UNDERLING
I BELIEVE YOU SAID THE CAPACITY
STARTED AT THREE HUNDRED EIGHTY
ONE MILLION AND IT'S GONE DOWN
TO TWO HUNDRED AND NINETY NINE
MILLION IS NOT ACCURATE.
YES.
MADAM CHAIRMAN IF YOU LOOK AT
OURS [inaudible]
SINGLE YEAR.
BEING WE HAVE PASSED ON TO HELP
OUT. THREE HUNDRED AND SIXTY TWO
MILLION AND THIS YEAR IT'S DOWN
TO TWO HUNDRED NINETY TWO
MILLION.
THE ONLY EXPLANATION FOR THAT IS.
MEMBER COMPANIES MOVING THEIR
BUSINESS FROM THEIR DEPARTMENT.
THE DEPARTMENT OF MANAGED.
SO HOW DO YOU SEE SOME.
THAT AFFECTING US IN THE FUTURE
THAT SEEMS TO BE A REAL PROBLEM
IF IT CONTINUES TO SHRINK SO.
WHAT ARE YOUR IDEAS AND WHAT DO
WE DO ABOUT IT?
IN TWO THOUSAND SEVENTEEN AT
DECEMBER TWO THOUSAND SEVENTEEN
THE ANY I SEE.
ARE MADE SOME CHANGES TO THAT
LIFE AND HEALTH INSURANCE
GUARANTY ASSOCIATION MODEL ACT.
AND TO THOSE CHANGES I THINK ARE
RELEVANT -- ONE DAY IF THEY
MODIFIED THE DEFINITION OF A
HEALTH BENEFIT PLAN. TO INCLUDE
A TEMAS.
AND THE SECOND THING THAT THEY
DID IS THEY CHANGE THEIR FUTURE
LONG TERM CARE ASSESSMENT
LIABILITY.
CURRENTLY IN CALIFORNIA A LONG
TERM CARE COMPANY IS.
IN THE HELP LINE.
AND SO PER PANTRY WHICH WAS OUR
LIVE BUILDING CALIFORNIA'S FOUR
HUNDRED MILLION DOLLARS THE ALL
FELL ON THAT HEALTH LYING.
UNDER THE MODEL CHANGES THEY
WOULD MAKE FUTURE LONG TERM.
CARE -- ASSESSMENT LIABILITY 50%
WOULD BE ON HEALTH MEMBER
INSURERS AND 50% -- LIABILITY
WOULD BE ON LIFE AND ANNUITY
MEMBER INSURERS.
SO THAT WOULD BROADEN THE BASE
OUR ASSESSMENT BASE AND THAT
WOULD I THINK A DRAFT.
CONCERNED THAT WE THANK YOU VERY
MUCH FOR YOUR TESTIMONY -- I
WOULD LIKE TO OPEN IT UP TO
OTHER MEMBERS IF THEY HAVE ANY
QUESTIONS.
AND JUST A SIDE NOTE UP SOME OF
OUR MEMBERS ARE RUNNING IN AND
OUT DUE TO OTHER COMMITTEE SO IF
THEY'VE ASKED TO BE EXCUSED SO --
SO WELCOME MISTER MORE LIKE.
GOOD MORNING.
THANK YOU OKAY SO THANK YOU VERY
MUCH I DO YOU HAVE ANY QUESTIONS
LIKE TO ADDRESS.
LITTLE BIT I LOVE TO READ MORE.
THANK YOU VERY MUCH FOR FOR THAT
WE WE DEFINITELY GET THAT BEFORE
SO THANK YOU GENTLEMEN FOR YOUR
TESTIMONY REALLY APPRECIATE YOUR
TIME TODAY.
THANK YOU SO NEXT WILL MOVE OVER
TO POWER NUMBER THREE WHICH IS
THE ALTERNATIVE SOURCE COVERAGE
[inaudible]
OKAY.
AS I WALK UP HERE -- I WANT TO
SHARE A LITTLE BIT WHAT THEY DO
SO THE HOME PLAYS A CENTRAL ROLE
IN THE ECONOMIC SOCIAL AND
FAMILY LIFE OF MANY CALIFORNIA
RESIDENTS.
ALL MARKET EASILY LOCKET LOSE A
LIFETIME OF IT INVESTMENTS OUR
NEXT PANEL WILL DISCUSS WHAT
CONSUMERS CAN GET HOMEOWNERS
INSURANCE WHEN IT ISN'T READILY
AVAILABLE.
FIRST WE HAVE -- GLENN POMEROY
THE CEO OF THE CALIFORNIA
EARTHQUAKE AUTHORITY THE
CALIFORNIA EARTHQUAKE AUTHORITY
OFFERS RESIDENTIAL EARTHQUAKE
COVERAGE.
ONLY A FEW PRIVATE INSURERS
OFFER EARTHQUAKE COVERAGE TODAY
AND THE CA MAKES SURE THAT EVERY
CALIFORNIA HOMEOWNER HAS THE
CHOICE.
WE ALSO HAVE WITH US AND THE
LEAST.
GIOVANE HOPEFULLY SAID THAT
CORRECTLY AND A PRESIDENT OF THE
CALIFORNIA FAIR PLAN ASSOCIATION --
AS WE HEARD BEFORE THE FAIR PLAN
PROVIDES BASIC HOMEOWNER
INSURANCE AND ALSO SOME
COMMERCIAL PROPERTY COVERAGE
WITH OTHER.
OTHER INSURERS DON'T THIS OPTION
IS PARTICULAR IMPORTANCE AND HI
FI RISK AREAS.
AND WITH THEM IS ALSO MISTER
BENJAMIN MAKE QUE EXECUTIVE
DIRECTOR CEO OF SURPLUS LINES
ASSOCIATION OF CALIFORNIA
WELCOME.
THE SURPLUS LINES ASSOCIATION OF
ISIS AND A SAID.
ASSIST THE DEPARTMENT OF
INSURANCE MONITORING.
TRANSACTIONS WITH THE I.
INSURERS THAT ARE OUTSIDE THE
STATE THESE INSURERS OFFER
HOMEOWNERS AND COMMERCIAL.
INSURANCE THANK YOU ALL FOR
BEING HERE AND TAKING THE TIME
SO WE'LL START WITH YOU THANK
YOU SO MUCH THANK YOU MADAM
CHAIR AND COMMITTEE MEMBERS --
PLEASURE TO BE HERE.
IN A PREVIOUS LIFE A VERY LONG
TIME AGO I WAS ELECTED TO THE
STATE LEGISLATURE IN MY HOME
STATE OF NORTH DAKOTA.
LAND OF NORTH WICKS WHATSOEVER.
SELECT THE WHEN I WAS TWENTY TWO
AND SERVE SIX YEARS.
AND LATER SERVICE SERVED EIGHT
YEARS AS A STATE ELECTORAL
COMMISSIONER.
WILL BE IN FOR A LEGISLATIVE
COMMITTEE DEALING WITH INSURANCE
I FEEL RIGHT AT HOME IN A FUTURE
INTEREST IN ALL OF THESE MATTERS.
I WILL GIVE YOU A BRIEF OVERVIEW
OF THE CALIFORNIA EARTHQUAKE
AUTHORITY WE DESIGNED A LITTLE
PACKET REALLY DESIGNED TO BE A
LEAVE BEHIND SO JUST BLAST
THROUGH QUICKLY SO YOU SEE
WHAT'S HERE.
BUT IT'S ALSO MEANT TO REALLY BE
AN INVITATION WE'RE JUST A
COUPLE BLOCKS AWAY.
AND IF YOU WERE ANY MEMBERS HERE
COMMITTEE YOUR STAFF HAVE ANY
QUESTIONS EVER BY THE CALIFORNIA
EARTHQUAKE AUTHORITY.
THIS GIVES A BUZZ AND WE'LL BE
RIGHT HERE THANK YOU FOR THAT.
THE SEEDS OF THE M. I'M PAUL
BEGIN ON SLIDE TO THE OF THE OF
THIS PACK.
THE SEEDS OF THE CALIFORNIA
EARTHQUAKE AUTHORITY WERE
PLANTED TEN YEARS BEFORE WE
ACTUALLY FORMED.
IN NINETEEN EIGHTY FOUR THERE
WAS SOME REFERENCE TO IT EARLIER.
AND THEN THE LEGISLATURE ADOPTED
WHAT'S CALLED THE MANDATORY
OFFER LAW.
IN CALIFORNIA FOR EARTHQUAKE
INSURANCE.
EARTHQUAKE IN A COVERAGE WAS
SPECIFICALLY EXCLUDED FROM THE
HOMEOWNER'S POLICY AT THAT TIME.
BUT LIKE INTEREST COMPANIES
PICKED UP THE MANDATORY
OBLIGATION TO OFFER A SEPARATE
EARTHQUAKE INTEREST POLICY WHEN
THEY SOLD THE UNDERLYING
HOMEOWNER'S POLICY.
MANDATORY OFFER.
NO NEED TO BUY IT NUMBER
EVERYBODY NEEDS.
TO RECEIVE THE OFFER.
TEACHERS COMPANIES WERE FINE
WITH THAT MANDATE FOR THE FIRST
TEN YEARS UNTIL ON SLIDE C. N.
SIDE THREE WE START TALKING
ABOUT WHAT HAPPENED ON JANUARY
SEVENTEENTH.
NINETEEN NINETY FOUR THE
NORTHRIDGE EARTHQUAKE POWERFUL
SIX POINT SEVEN THAT STRUCK.
IN THE IN THE COMMUNITY OF
NORTHRIDGE DOESN'T THE LOSS OF
LIFE AND AND AND TREMENDOUS
PROPERTY DAMAGE AS WELL.
SLIDE.
FOUR ILLUSTRATES THAT DAMAGE
FORTY BILLION DOLLARS IN
PROPERTY DAMAGE IN TOTAL.
HALF OF THAT WAS RESIDENTIAL
HAVE ALL THE DAMAGE IN
NORTHRIDGE -- PROPERTY DAMAGE IS
RESIDENTIAL AND HALF OF THAT WAS
INSURED BECAUSE IT INSURANCE
WITH IT -- CREATURES WAS SO
CHEAP BACK AT THE NORTHRIDGE
STRUCK BECAUSE NO ONE UNDERSTOOD
THE RISK.
COMPUTED BEEN OFFERING IT NOT
CHARGING MUCH FOR IT.
AND A LOT OF PEOPLE INSURED AND
AND AND THE INSURANCE INDUSTRY
TOOK A HEAVY HIT THE NORTHRIDGE
EARTHQUAKE.
BUT THAT WAS THE MOMENT IN TIME
IS THE COMMISSION MENTIONED WHEN
MOST OF THE INDUSTRY SAID WE
CAN'T DO IT AGAIN.
AND SO THEY DON'T THE INDUSTRY
APPROACH THE LEGISLATUR AND
ATTEMPTED TO GET THE MANDATE
THAT THEY OFFER.
ELIMINATED BUT THE LEGISLATURE
REFUSED AND SAID YOU'RE THE
HOMEOWNERS MARKET YOU'RE GOING
TO OFFER EARTHQUAKE INSURANCE --
COMPANIES THEN.
REFUSING READING TO HOMEOWNERS
POLICIES.
ACROSS THE BOARD BASICALLY AND
PEOPLE COULDN'T BUY A HOME
BECAUSE THEY COULDN'T GET LED UP
TO HOMEOWNERS INSURANCE.
THAT WAS THE CRISIS THAT LED TO
THE CREATION OF THE CALIFORNIA
EARTHQUAKE AUTHORITY IN THE MID
NINETIES.
IN THE END THE WAY WE WERE
ESTABLISHED.
IF YOU LOOK AT SLIDE.
FIVE LEGISLATURE PASSED LAWS C.
WAS FORMED A PUBLIC
INSTRUMENTALITY OF THE STATE NOT
A STATE AGENCY BUT THIS SORT OF
UNIQUE HYBRID.
CREATURE WAS CREATED BY THE
LEGISLATURE IN INSURANCE
COMPANIES.
BY LAW WERE OFFERED THE
OPPORTUNITY TO JOIN.
AND THESE COMPANIES DID JOIN THE
CA.
RECALL MORE PARTICIPATING
INSURERS.
YEAH THE PAY TO JOIN THE APPEAL
OUGHT TO JOIN AND THAT'S HOW THE
CA RECEIVE HIS INITIAL
CAPITALIZATION.
THE LAW PLACED A BILLION DOLLARS
IN STATUTE AND BASICALLY SAID
ANY COMPANY THAT SEEKS TO JOIN.
MUST PAY A PERCENTAGE OF A
BILLION THIS DETERMINED BY ITS
HOMEOWNERS MARKET SHARE.
SO JUST USING ONE EXAMPLE STATE
FARM.
WHICH HAD ABOUT 30% OF THE
HOMEOWNERS MARKET.
THEIR PRICE TO NTER WAS WAS 30%
OF A BILLION OR THREE HUNDRED
BILLION DOLLARS.
WHICH SEATED INTO THE COMPANY
BECAME THE C. CAPITAL FOR THE
ORGANIZATION. SEVEN HUNDRED
MILLION WAS.
THAT TIME IN THE ORGANIZATION
WAS UP AND RUNNING THAT'S THE
GENESIS OF THE CALIFORNIA THREE
THIRTY AND THEN.
EVER SINCE IT IS.
AGENTS OF THESE COMPANIES THAT
SELL OUR POLICY.
WE DON'T HAVE ANY INSURANCE
AGENTS.
AGES OF THESE COMPANIES THAT
SELL OUR POLICY.
BUT THEY SELL IT AT THE RATES WE
DETERMINE WHICH ARE NOT FOR
PROFIT ACTUALLY STONE.
APPROVED BY THE INSURANCE
COMMISSIONER.
IDENTICAL REGARDLESS OF WHICH
COMPANY IS CELLS ARE POLICY.
AND IT'LL BE THE ADJUSTERS OF
THESE COMPANIES THAT ARE JUST
LOSSES FOR US.
AFTER AN EVENT -- PURSUIT OUR
GUIDELINES.
THE ATTEMPT HERE WAS TO KEEP US
LEAN AND MEAN AND AND AND
THEREFORE FOCUS ON MAKING
EARTHQUAKE INSURANCE MORE
AFFORDABLE AND WE MADE SOME
PROGRESS.
OVER THE LAST COUPLE OF DECADES.
SLIDE SIX JUST A QUICK VIEW OF
HOW WE'RE GOVERNED.
WE'RE PUBLICLY MANAGED AT
BECAUSE WE'RE PUBLIC
INSTRUMENTALITY THE GOVERNOR THE
INSURANCE COMMISSIONER AND THE
STATE TREASURER OUR BOARD
MEMBERS WITH THE TWO LEADERS OF
THE LEGISLATURE SERVING AS NON
VOTING MEMBERS.
WE NOW HAVE OVER MILLION POLICY
POLICY HOLDERS WITH A PUBLIC
MISSION.
UP AROUND MAKING EARTHQUAKE
INSURANCE MORE ATTRACTIVE AND
INVALUABLE AND MORE AFFORDABLE
AS WELL.
FIRST OF ALL WITH RESPECT TO
AFFORDABILITY ON SLIDE.
SEVEN SINCE WE'VE BEEN IN
BUSINESS THE COST TO REBUILD
HOMES OVER THE PAST TWENTY YEARS
HAS GONE UP OVER A 170%.
SO IF WE WERE JUST SITTING IN
OUR DESK COUPLE BLOCKS AWAY
REASON RATES WHATEVER
RECONSTRUCTION COSTS WENT UP.
NO ONE WOULD AFFORD A BE ABLE TO
FOR A QUICK INSURANCE ANYMORE.
YEAH WE HAVE FOUND WAYS TO LOWER
RATES BY OVER 50% THROUGH A
COMBINATION OF FACTORS.
RESULTING IN.
AN INSURANCE POLICY TODAY.
WOULD COST TWICE AND WHAT IT
DOES HAD WE NOT HAD THIS PUBLIC
ENTERPRISE A WORKING TO MAKE
COST MORE AFFORDABLE SO.
WE'RE DOING EVERYTHING WE CAN IN
THE AFFORDABILITY SIDE.
A SLIGHT EIGHT IN TERMS OF WHAT
WE OFFER.
THE THE MIDDLE COLUMN AND I WILL
GO INTO DETAIL BUT THE MIDDLE
COLUMN REPRESENTS THE BARE BONES
MINIATURE.
CALL MANY POLICY THE BARE BONES
SET OF BENEFITS THAT A COMPANY
HAS TO OFFER IN ORDER TO CHECK
THE BOX THAT THE SATISFIED THE
MANDATORY OFFER LAW.
BUT BECAUSE WE HAVE THIS PUBLIC
MISSION.
WHERE WE WORK TO MAKE OUR
COVERAGE MUCH MORE OF?
A VALUABLE TO OUR I'M ON THE
RIGHT A WIDE RANGE OF OPTIONS
NOW WIDE RANGE OF DEDUCTIBLES
AND AT OUR PEOPLE TO CHOOSE FROM
A BAND.
AID A DISCOUNT THAT'S AVAILABLE
FOR PEOPLE WHO TAKE PROPER STEPS
DIRECTOR FOR THE ROLLER HOME WE
WANT HOMES INSURED WITH A POLICY
THEY CAN AFFORD.
THEY'LL BE BACK BY IT A PUBLIC
ENTERPRISE WILL BE HERE TO PAY
THEIR CLAIMS.
ON SLIDE.
NINE AND ELEVEN ACTUALLY IT'S
INTERESTING INVITE YOU ALL TO GO
TO OUR WEBSITE.
EARTHQUAKE AUTHORITY DOT COM AND
JUST PLAY AROUND WITH IT WERE A
PREMIUM CALCULATOR THAT WE HAVE
THERE TOO SO YOU CAN SEE HOW
MUCH IT.
POLICY COST.
IN YOUR DISTRICT.
WHERE THE HOME IS LOCATED?
IN GOING THE CALCULATORS SET THE
THE OPTIONS THAT YOU WANT AND
SEE IMMEDIATELY WHAT THAT POLICY
WILL COST YOU.
AND MOST PEOPLE WHO DO THIS FIND
IT COSTS MUCH LESS THAN THEY
THOUGHT BECAUSE THEY HAVEN'T
CHECKED INTO IT FOR TEN OR
FIFTEEN YEARS.
AND CALIFORNIA'S ARE RESPONDING
SLIDE.
TEN MORE ARE GETTING INSURED.
WITH THIS WHOLE WHEN WE'RE NOT
BREAKING ARMS BETTER CELLS ON
THE BACK BECAUSE ONLY 13% OF ALL
HOMEOWNERS WHO HAVE A
HOMEOWNER'S POLICY OF ALSO
PURCHASED EARTHQUAKE INSURANCE
WE'VE GOT A LOT OF WORK TO DO.
WE'RE MAKING PROGRESS AS YOU CAN
SEE AT THE GROWTH OF OUR
POLICIES.
ON SLIDE.
TEN WE'RE FINANCIALLY STRONG.
A SLIGHT ELEVEN IS A
DEMONSTRATION OF OUR BUT I
CLAIMS BEING CAPABILITY.
WE'RE GOOD FOR ONE OF FOUR
HUNDRED YEAR EARTHQUAKE.
BUT WHAT DOES THAT MEAN IT
REALLY MEANS THERE'S ONLY A ONE
IN FOUR HUNDRED CHANCE THAT WE
DON'T HAVE 1100% ENOUGH. TO BE
ONE OF THE PERCENT OF OUR CLAIMS
THAT THIS IS VERY STRONG AS A
VERY CONSERVATIVE BENCHMARK SET
FOR US BY THE RATING AGENCIES.
AND IN THE INFORMATION TO THE
RIGHT OF THAT TOWER.
IF YOU SEE M..
IN NINETEEN NINETY FOUR
NORTHRIDGE EVENT IF AT
NORTHRIDGE WILL REOCCUR TODAY WE
ESTIMATE OUR LOSSES WOULD BE
SEVEN HALF BILLION.
AND YET WE HAVE SEVENTEEN
BILLION IN CLAIMS BEING
CAPABILITY SO THAT WE HAVE
FINANCIAL STRENGTH.
WE PAY DEARLY FOR IT.
BYE BYE BYE BASICALLY ACQUIRING
A TON OF REINSURANCE.
WHICH WE PAY FOR INSURANCE FOR
INSURANCE COMPANIES WE HAVE
SPENT ABOUT FIVE BILLION DOLLARS
ON REINSURANCE SINCE WE'VE BEEN
AROUND OVER THE PAST TWENTY TWO
YEARS WE SPENT OVER THREE AND A
FIFTY MILLION DOLLARS A
REINSURANCE LAST YEAR.
AND AND AND THROUGHOUT THE TIME
TO RECEIVE -- REINSURANCE
RECOVERIES OVER BASICALLY BUYING
PROTECTION FOR A VERY LARGE AND
FREQUENT EVENT BUT WE HAVE TO
HAVE THE FINANCIAL STRENGTH IN
CASE THAT HAPPENS.
WE SEE ROOM FOR IMPROVEMENT
THERE IT WILL BE TALKING MORE TO
YOUR COMMITTEE ABOUT THAT AS WE
GO FORWARD.
THE BILL OF GLOSS OVER THE
HISTORY ON SLIDE THIRTEEN TO
LEAVE THAT FOR YOUR ATTENTION
JUST SURE HOW THE CAPACITY HAS
CHANGED OVER TIME.
I DON'T WANT TO END BY TALKING
ABOUT. ONE PROGRAM THAT WE DO
OFFER THAT I'M VERY EXCITED
ABOUT IN IN IN.
IN THIS PROGRAM IS RELEVANT IN
MOST OF YOUR DISTRICT.
ALL THEIR QUICK BASEBALL PROGRAM.
WE HAVE SOME FUNDING LIMITED
FUNDING AVAILABLE TO MAKE GRANTS
AVAILABLE TO PEOPLE WHO WANT TO
RETROFIT THEIR OLDER HOME.
BY GOING INTO THE CRAWL SPACE
PUTTING SOME BRACES BOLTS.
THE THE THE THE TWO HOMES YOU
SEE INSIDE FOURTEEN HOMES TO
HOMES IN NAPA.
BUILT ABOUT THE SAME TIME.
THE BLUE HOME IT BEEN
RETROFITTED YEARS AGO THE YELLOW
HOME HAD NOT BEEN.
THE NAPA EARTHQUAKE RENDER THAT
YELLOW HOME UNLIVABLE FOR
SEVERAL YEARS ACOSTA REPAIR
SEVERAL HUNDRED THOUSAND DOLLARS.
AND A FEW THOUSAND BUCKS RICHER
FOR THAT BLUE HOME AND IN A LOT
OF STATE A STANDING DURING THE
EARTHQUAKE WE NEED THE RHETORIC
MORE HOMES.
WE HAVE THIS BREATHABLE PROGRAM
WHICH IS GREAT. FIVE FIFTEEN M.
L. GIVES YOU A LITTLE BIT OF
DETAIL ON THAT.
WE CAN DO ABOUT TWO THOUSAND
HOMES A YEAR RIGHT NOW.
WITH THE FUNDING THAT WE HAVE
AVAILABLE.
LATER THIS MONTH WILL BE BEFORE
YOU WITH A BILL THAT WOULD ALLOW
US TO SUBSTANTIALLY INCREASE
THAT AMOUNT OF FUNDING.
IN A A SAY THAT DETAIL FOR FOR
THAT HEARING BUT WE LOOK FOR TO
WORKING THERE COMMITTEE ON THAT
MEASURE. ONE PIECE OF NEWS I
WANT TO GIVE YOU DON'T.
THE GRANTS THAT WE MAKE
AVAILABLE.
THE THREE THOUSAND DOLLARS A
YEAR TO TWO THOUSAND LUCKY
CALIFORNIANS.
WELL.
THE LEGISLATURE ME THOSE NON
TAXABLE AT THE STATE LEVEL --
WHEN WE ROLLED OUT THIS PROGRAM
A FEW YEARS AGO WHICH MAKES ALL
THE SENSE IN THE WORLD?
THE DEMOCRATS ARE TAXABLE
FEDERALLY.
THEY SHOULDN'T BE IF OUR GRANTS
WERE FUNDED BY.
FOR A FEMALE GRANT WHICH
SOMETIMES THEY ARE THEY'RE NOT
TAXABLE BUT FOR CHRIS ARE FUNDED
BY THE A MONEY.
FEDERAL GOVERNMENT TAKES TO
SHARE THEIR TAXABLE FEDERALLY.
CONGRESSMAN MIKE THOMPSON ANSWER
COME A HARRIS ARE ENDING IT --
JOINTLY ISSUING A RELEASE
ANNOUNCING LEGISLATION IN
CONGRESS BIPARTISAN IN NATURE TO
ELIMINATE THE TAX FEATURE.
OF OF THESE GRANTS ASSUMES A
RELEASE COMES OUT I'LL GET IT TO
COMMITTEE STAFF I WAS HOPING
WOULD HAVE IT BY NOW BUT I THINK
WE'RE JUST ABOUT AN HOUR TO BE.
TOO EARLY.
SO I'M SURE.
WE'RE WORKING AT THE FEDERAL
LEVEL. TO IMPROVE OUR PROGRAMSWERE WORKING HERE AT THE STATE
LEVEL THERE'S A COUPLE BILLS.
IN THIS LEGISLATION IN THIS
SESSION THAT PERTAIN TO THE
EARTHQUAKE AUTHORITY.
WE LOOK FORWARD TO WORKING WITH
A IT WITH YOUR COMMITTEE AND THE
AND THE LEGISLATURE.
AS WE GO FORWARD TO MAKE
CONTINUE DO EVERYTHING WE CAN TO
MAKE THIS QUICK INSURANCE.
MORE AFFORDABLE AND MORE
AVAILABLE FOR ALL CALIFORNIANS
THANK YOU.
THANK YOU I SEE SENATOR DOT HAS
A QUESTION MR DOT.
THANK YOU OFFER VERY INFORMATIVE --
PRESENTATION.
I'M I'M LOOKING AT THE TOWER
RIGHT NOW AND THINK OF THE TOPIC
I A L. I. YES.
WHAT'S I APOLOGIZE AND THAT'S
FOR INDUSTRY ASSESSMENT LAYER.
IN THE END INDUSTRY MEANING THE
INSURANCE INDUSTRY IS BEING
ASSESSED FOR THAT AMOUNT THE
COMPANIES THAT PARTICIPATE WITH
US YES IF THERE'S AN EVENT AND
WE PAY FOR THE BOTTOM UP.
HE A INTEREST SURCHARGE IS A IS
A IS A BILLION DOLLARS I ASSUME
THIS IS SURCHARGE POLICY HOLDER
THAT'S GREAT.
IN BOND PROCEEDS WE'VE ISSUE
SOME DEBT PREVIOUSLY AND HAVE
THOSE PROCEEDS AVAILABLE TO US
REPAYING THAT DEBT TO OUR
PREMIUM GOING FORWARD -- SAYS
REVENUE BONDS THAT WE'VE
COLLECTED AND TUCKED AWAY AND
MADE PART OF OUR CLAIMS BEING
CAPABILITY I'M NOT BEING
CRITICAL THE PROGRAM I'M JUST
TRYING TO UNDERSTAND.
YEAH WHAT WHAT'S HAPPENING THANK
YOU BASICALLY YOU GOT THIS --
THIS STACK HERE WHICH SO YOU GOT
CAPITA GET THE REINSURANCE.
BUT IF YOU COMPARED THE WORST
POSSIBLE CATASTROPHE THAT WE HAD
SINCE THE NINETEEN OH SIX
EARTHQUAKE.
YOU'RE ONLY ABOUT HALF BROUGH
THAT REINSURANCE.
MY QUESTION IS IS WHY WOULD WE
PAY. FOR THAT MUCH REINSURANCE.
KNOWING THAT WE HAVE BOND
PROCEEDS ALREADY.
AND WE HAVE THIS INDUSTRY AND
ASSESSMENT IT'S A GREAT QUESTION.
THE THE MARKER THAT WE SEE THAT
WE NEED TO CLIMB UP TO IS A ONE
IN FOUR HUNDRED YOUR LEVEL OF
PREPARATION.
THAT'S NOT SPELLED OUT A STATE
LAW BUT THAT'S A BASICALLY
MANDATE IMPOSED ON US BY THE
RATING AGENCIES AND BEST MOODY'S
AND FITCH.
WHO WANT TO SEE THAT WE HAVE A
ONE IN FOUR HUNDRED YOUR CLAIMS
THINK CAPABILITY IN ORDER TO
GIVE US THE FAVORABLE CREDIT
RATING AT THAT THAT WE NEED?
IN ORDER TO ACCESS DEBT MARKETS
IF WE EVER NEED.
TO SORT OF HAND CUFF TO THE
TOTAL STACK EYES I CALLED --
TOWERS YOU CALLED IT.
IS A ONE IN FOUR HUNDRED IT'S
GOT.
THE NINETEEN OH SIX EARTHQUAKE
HIM WHAT WHAT WHAT WOULD THAT BE
LIKE A ONE IN TWO HUNDRED
STANDARD THEN OR SOMETHING LIKE
THAT YEAH -- YEAH OKAY THANK YOU.
IT.
I HAVE ONE QUESTION IF I MAY
[inaudible]
SORRY [inaudible]
THIS MORNING.
I'M SORRY I MISSED YOU.
THERE WAS NORTH BREAK INSURANCE
BACK IN BUT THERE WAS FIRE
INSURANCE.
AND MOST THE DAMAGES CAUSED BY
FIRE -- BUT IT IT REALLY WIPED
OUT.
FIREMAN'S FUND -- INSURANCE
COMPANY AND AND ADDRESSES ALL
WHITE IN THE IN THE WHOLE
NARRATIVE SAID THAT.
IN ORDER TO MEET CLAIMS THEY
GAVE.
THEY PAID HALF IN CASH AND HALF
IN STOCK KEEP THE COMPANY GOING.
BUT THAT THERE WAS AN
INTERESTING LITTLE MISTER YEAH.
THANK YOU I'M.
NORTHRIDGE I DON'T BELIEVE HAVE
FIRES.
SO MUCH DOES THE SHAPE WHAT
HAPPENS IF.
AN EARTHQUAKE CREATES.
FIRE THAN WHEN YOU'RE HOMEOWNERS
AND KICK IN YES I WOULD. TO THE
HOMEOWNERS IS SPECIFIC WOULD
SHAKE DAMAGE.
CONTINUES TO COVER FIRE.
REGARDLESS OF THE PUTTING
EARTHQUAKE TO THE HOMEOWNERS
COVERS FIRE.
AND WE COVER SHAKE.
WE'RE CHATTING BEFOREHAND THERE
MAY COME A DAY WHEN WE WILL GAS
AND FIGURE OUT TO DO AFTER A BIG
EARTHQUAKE WHAT CAUSED THE
DESTRUCTION OF THE HOME WAS OF
THE EARTHQUAKE THAT CAME FIRST
OF THE FIRE THAT CAME LATER.
BECAUSE WE HAVE THIS PUBLIC
INSTRUMENTALITY THE STATE.
THERE WILL BE AN EFFORT TO MAKE
SURE THAT THAT PEOPLE GET PAID.
THE BIGGEST.
THING WE'RE FINDING IN OUR
HEARINGS.
WITH THE WILD FIRES AND NAPA
SONOMA.
IS THAT TO HAVE.
YOU CAN BUY CHEAP HOMEOWNERS
INSURANCE AND THEN WHEN FIRE
COMES YOU REALIZE YOU JUST
BOUGHT SHE FIRE INSURANCE
[inaudible]
AND I'LL BE SEEING.
OUR AYE BYE BYE QUICK INSURANCE
PRIVACY.
I'M ONE OF THE FEW IN THE STATE.
AND I JUST WONDER HOW DO WE DEAL
WITH THE MASSIVE REACTION OF
PEOPLE THAT ARE GOING TO SAY
WELL I DIDN'T KNOW THAT MY
HOMEOWNER'S INSURANCE DIDN'T
COVER.
EARTHQUAKES IN ECM OFFLINE AND
OUR HALL SAYING HELP MAKE US
WHOLE WHICH IS TRYING TO DO.
WITH ALL THE WILD FIRES ARE WHAT
KIND OF MARKETING ARE YOU.
WELL THAT THERE ARE TWO
COMPONENTS.
AND IF THE BIG ONE HITS AND YOU
ARE.
NAKED AND DON'T HAVE INSURANCE.
YOU KNOW YOU YET THAT'S EXPOSURE
YOU HAVE A YES MA'AM GERMS AND
MORE LIKE WHAT.
WE WOULD DO WE CAN WITH THE
DOLLARS WE HAVE AVAILABLE TO WE
WE HAVE A FOURTEEN MILLION
DOLLAR.
MARKETING BUDGET.
WE'RE OUT THERE IN RADIO AND TV
AND SOCIAL MEDIA.
WOULD BE TRAVEL AROUND AND AND
AND SB TO ROTARY CLUBS AND AND
WE DO WE CAN DIVERT TO REACH OUT
TO GET THE WORD OUT.
IT IS DISCLOSED AND POLICIES
COURSE.
NUMBERS READ OUR POLICIES IT'S
ALWAYS INCOME UPON US TO GET THE
WORD OUT NOT ONLY THAT IS NOT
COVERED HOMEOWNERS POLICY.
IT'S IMPORTANT FOR PEOPLE TO
REALIZE FEDERAL GOVERNMENT
SECOND COMMENDED BILL EVERYBODY
OUT WE DID WE OBVIOUSLY KNOW
THAT THEY'RE GONNA COME AND
REBUILD EVERYBODY'S HOMES
THERE'S DISASTER ASSISTANCE.
THANK GOD BUT IT DOESN'T REBUILD
HOMES.
SO THERE ARE THERE ARE MISS THAT
WE COSTLY TRY TO OVERCOME.
AND THEN WE GET WE HAVE TO KEEP
AT IT THE FACT MATTER IS.
EARTHQUAKES A TOUGH SELL BECAUSE
THEY DON'T HAPPEN VERY OFTEN AND
SO PEOPLE JUST PUT OUT A PUT.
OUT OF SIGHT OUT OF MIND THE
LAST REALLY BIG DAMAGING
EARTHQUAKE WAS TWENTY FIVE YEARS
AGO.
HELLO PEOPLE LIVE IN CALIFORNIA
WHO HAVE AN EXPERIENCE ONE AND
THINK WELL THIS EARTHQUAKE SOME
MOVED ON BUT THEY HAVEN'T SENT
TO SAY. 99% PROBABILITY OF IN
NORTHRIDGE SIZED EARTHQUAKE
HAPPENING AGAIN IN THE NEXT
THIRTY YEARS SOMETIME TOMORROW
WE'RE SEVERAL YEARS FROM NOW.
WHAT I FIND EVEN MORE TROUBLING
IS THE SAME SIDE TO SAY?
THERE'S A FIFTY FIFTY CHANCE.
TOSS A COIN FIFTY FIFTY SHOT OF
A SEVEN POINT FIVE EARTHQUAKE
HAPPEN CALIFORNIA SEEM PRETTY
TIME.
THAT'S AN EARTHQUAKE SIXTEEN
TIMES STRONGER THE NORTHRIDGE.
WE'VE GOT TO DO MORE YOU READY
IN ALL SORTS OF FACETS.
THANK YOU THANK YOU MANAGER
THANK YOU FOR THAT I SIMILAR TO
HIS QUESTION I AM A LITTLE
CURIOUS I GET WE HEARD --
RESTAURANT LOTTA STATE EARLIER
TODAY THERE'S ONLY 11% TAKE UP
RATE AND AND TIME CURIOUS ABOUT
HOW LONG.
HAS IT TAKEN US TO GET TO LIVE A
PERCENT AND I KNOW YOU'VE
EXPRESSED SOME OF THE WAYS THAT
WE GET PEOPLE INVOLVED IN
KNOWING THAT THERE IS OUT THAT
INSURANCE.
WHAT OTHER PLANS ARE STEPS ARE
YOU GONNA TAKE IN TERMS OF --
MAKING PEOPLE AWARE THAT THERE
IS THAT INSURANCE.
WITH ALL DUE RESPECT I MAKE A
SLIGHT CORRECTION -- TO THE
COMMISSIONER THE TAKE A RATE IS
NOW WHOPPING THIRTEEN POINT 2%
SO WE'RE UP FROM.
ELEVEN ENTER FOR CATION -- WHICH
IS OBVIOUSLY A VERY SMALL NUMBER
BUT WE'VE WORKED REALLY HARD TO
GET IT THERE I WILL SEE THAT IN
THE IN THE TEN YEARS LEADING UP.
TO TWENTY SIXTEEN OVER TEN
YOU'RE PRETTY TIME.
DESPITE ALL OF OUR EFFORTS
COURSE IT WAS A RECESSION AND
EVERYTHING ELSE DESPITE ALL THE
PROMOTION THINGS THAT WE WERE
DOING.
WE GREW ON AVERAGE ONLY SIX
THOUSAND POLICIES A YEAR.
IN TWENTY SIXTEEN WHEN WORKING
WITH THE LEGISLATURE WE IMPROVES
OF THE LANGUAGE THAT THAT GOES
OUT IN THE OFFER WE IMPROVED OUR
COVERAGE OPTIONS WE LOWER RATES
AGAIN.
IN.
TWENTY SIXTEEN I WOULDN'T GO BY
SIX THOUSAND WE GREW BY.
NINETY THOUSAND A BIG JUMP THAT
IT WAS A TRIBUTE TAUGHT BOTH THE
IMPROVEMENTS IN IN THE IN THE
POLICY BUT ALSO.
WORKING HARVEY AND IRMA AND A
BIG MEXICO A BIGGER EARTHQUAKE
IN MEXICO BECAUSE A LOT OF
PEOPLE.
TO BE AWARE OF THE FACT THEY
NEED TO BE INSURED.
SO SOME OF THIS IS WITHIN OUR
CONTROL WE DO WE CAN TO MAKE THE
PRODUCT BETTER AND GET THE WORD
OUT.
SOME OF IT IT JUST COME FROM
AWARENESS WHEN BAD EVENTS HAPPEN
ELSEWHERE AND PEOPLE ARE
SUDDENLY MOTIVATED.
BUT BUT WE WE WE WE ARE
COMMITTED MADAM CHAIR DO
EVERYTHING WE CAN.
THIS PUBLIC INSTRUMENTALITY.
TO ENSURE AS MANY HOMES AS
POSSIBLE.
RETROFIT ISN'T AS MANY OLDER
HOMES AS POSSIBLE EXCITED TO BE
BACK IN FRONT OF YOU IN A COUPLE
WEEKS WITH A BILL THAT WE THINK
WILL A LOT HELP US TO DO BOTH.
WE'LL TALK MORE ABOUT THAT ON
APRIL TWENTY FOURTH.
THANK YOU FOR YOUR TESTIMONY
THANK YOU SIR SO MISTER BOND.
HAVE A FOURTH THANK YOU THANK
YOU MADAM CHAIR.
NEAR ME.
I THANK YOU MADAM CHAIRWOMAN I'M
I AM UNLESS YOU'VE ON I'VE BEEN
RUNNING THE CALIFORNIA FAIR PLAN
SINCE -- TWO THOUSAND NINE SO
TEN YEARS I WANTED TO PROVIDE
YOU WITH AN OVERVIEW OF THE FAIR
PLAN AND POSSIBLY EVEN DISPEL
SOME MYTHS ABOUT THE FAIR PLAN --
THERE.
MANY INACCURACIES THAT PEOPLE
TEND TO THINK ABOUT WHEN THEY
THINK ABOUT.
THEM.
YOUR PLAN WAS CREATED BY STATUTE
IN NINETEEN SIXTY EIGHT THAT WAS
IN DIRECT RESPONSE TO THE LA
RIOTS.
AND THE BELLER FIGHTERS ONE
NINETEEN SIXTY EIGHT THE
LEGISLATURE -- EFFECTIVELY ASKS
THE INSURANCE INDUSTRY TO CREATE
THE FAIR PLAN CALIFORNIA
ASSOCIATION.
WITH FOUR WITH.
FOUR PURPOSES THE FIRST IS TO
ASSURE THE STABILITY OF THE
PROPERTY INSURANCE MARKET IN THE
STATE.
SURE THE AVAILABILITY OF BASIC
PROPERTY INSURANCE IN THE STATE.
TO ENCOURAGE THE MAXIMUM USE OF
THE NORMAL INSURANCE MARKET
OTHER WORDS DON'T COMPETE WITH
THE VOLUNTARY MARKET.
AND THEN -- FOR THE ADMITTED
INSURERS TO ESTABLISH A FAIR
PLAN SO THOSE ARE THE FOUR
MANDATES IN THE IN THE CODE
ITSELF.
THE FAIR PLAN IS AVAILABLE TO
ANYBODY WHO HAS.
INSURABLE PROPERTY MEANS THAT
MEANS THERE IS YOU KNOW THE ROOF
NOT FALLING APART THERE'S NO ON
REPAIR DAMAGE.
THE FAIR PLAN WILL NOT TURN
ANYBODY AWAY BASE SOMEWHERE
THEIR PROPERTIES LOCATED HOW
MANY TREES ARE ON THERE PRETTY --
WHAT THE PROTECTION CLASSES
THOSE ARE ALL RISKS THAT?
COME TO THE FAIR PLAN GET IT
JUST NEEDS TO BE AN INSURABLE
CONDITION THAT IS.
PRETTY MUCH THE ONLY REASON WHY
WE WOULDN'T WRITE A POLICY.
YOUR PLANS A PRIVATE ASSOCIATION
THERE'S NO PUBLIC FUNDING NO
TAXPAYER MONEY IS INVOLVED THE
FAIR PLAN IS ALSO NOT A STATE
AGENCY.
INSURERS ADMITTED TO ISSUE
POLICIES IN CALIFORNIA ARE
REQUIRED TO PARTICIPATE IN THE
FAIR PLAN.
AND IT'S FOR FOR THE MOST PART
IT'S A MARKET SHARE.
I'M PARTICIPATION THERE ARE SOME
RIGHT OUT CREDITS AVAILABLE
THOSE ARE PRETTY LIMITED SO IN A
FACT WHATEVER YOUR MARKET SHARES
IN THE STATE IN TWO YEARS AGO
THAT IS YOUR THAT IS YOUR CHILD
THE WELL -- WHEN NECESSARY THE
FAIR PLAN CAN DO AN ASSESSMENT
OF THE MEMBER COMPANIES?
THOSE TO BE APPROVED ARE TO BE
APPROVED BY THE INSURANCE.
NO POLICY DISTRIBUTION THIS IS A
THIS IS AN AREA THAT DOWN.
PEOPLE USUALLY FIND VERY.
SURPRISING AND HISTORICALLY THE
FAIR PLAN RIGHT POLICIES IN VERY
LIMITED AREA.
EARLY URBAN AREAS AND VERY
SPECIFIC FIRE PRONE AREAS.
AND ALMOST EXCLUSIVELY IN LOS
ANGELES COUNTY THAT'S HOW THE
FAIR PLAN STARTED.
ALL OF THE AREAS WERE IN
SOUTHERN CALIFORNIA.
AND ALMOST ALL THAT WAS IN LA
COUNTY OUT OVER THE YEARS THAT'S
EVOLVED WE NOW RIGHT IN THE
ENTIRE STATE.
HOWEVER PRIOR TO TWENTY SIXTEEN
WHEN I TOOK OVER THE FAIR PLAN.
APPLICATIONS FOR POLICIES
WRITTEN OUTSIDE OF A VERY NARROW
AREA IN LA COUNTY REQUIRED --
THREE DECLINATIONS THAT WE WE
REQUIRE THAT ON THE APPLICATION
THE NAMES OF THREE COMPANIES
THAT TURNED YOU DOWN FOR
BUSINESS.
I'M MORE INCLUDED ON THE
APPLICATION.
IN TWENTY SIXTEEN AT AT MY
REQUEST -- THAN INSURANCE
COMMISSIONER JONES REMOVE THIS
REQUIREMENT BECAUSE I BELIEVED
AND I STILL BELIEVE IT.
MADE IT DIFFICULT FOR PEOPLE TO
COME TO THE FAIR PLAN -- MOST
COMPANIES WERE WILLING.
TO YOU KNOW THEY KNOW THAT AN
AGENT WILL KNOW UP FRONT THAT
THEY'RE JUST NOT GONNA BE ABLE
TO WRITE THIS PIECE OF BUSINESS
BUT THEY'RE NOT NECESSARILY
GOING TO GIVE THAT.
POLICY OLDER PIECE OF PAPER
SAYING WE WANT RIGHT YOU WE WERE
MAKING IT HARD FOR PEOPLE TO
COME TO THE FAIR PLAN.
AND I'M HAPPY TO SAY WE WE
REMOVE THAT REQUIREMENT IT'S
MADE IT EASIER FOR PEOPLE TO
COME TO THE FAIR ON WHEN THEY
NEED.
TO TODAY YOUR PLAN RIGHT
POLICIES IN ALL FIFTY EIGHT
CALIFORNIA COUNTY.
THE FIVE COUNTIES WITH THE
HIGHEST CONCENTRATION OF I'M
POLICIES NOT SURPRISINGLY LOS
ANGELES HAS 66%.
OF ALL THE I'M POLICIES -- MY
SAN BERNADINO WITH 10% SAN DIEGO
WITH 4% RIVERSIDE WITH 3% IN
ORANGE WITH 2%.
NO NO THOSE ARE ALSO A SOUTHERN
CALIFORNIA COUNTY [inaudible]
NOW COMBINED.
THOSE FIVE COUNTIES ACCOUNT 485%
OF I'M POLICY TODAY.
NOW 72% OF POLICIES ARE URBAN --
THAT REMAINS ARE YOU KNOW THE
BULK OF OUR BOOK OF BUSINESS
HOWEVER THAT SHRINKING LAST YEAR
IT WAS AT 75% OF OUR POLICIES.
TO WE'RE LOSING URBAN CUSTOMERS.
PRESUMABLY THEY'RE ABLE TO FIND
BUSINESS ELSEWHERE AND WE ARE
GAINING MORE CUSTOMERS THAT ARE
IN THE AND THE WILL IN THE BRUSH
WELFARE EXPOSED.
THEIR PLAN RIGHTS POLICIES.
UNDER ANOTHER METHOD BUT I
WANTED TO SPELL WE WRITE
POLICIES IN A CROSS SECTION OF
SOCIO ECONOMIC AREAS.
AND I INCLUDED SOME --
REFERENCES HERE FOR EXAMPLE.
ALMOST PERCENT OF OUR POLICIES
ARE WRITTEN IN BEVERLY HILLS.
EQUALLY IN MALIBU.
CALABASAS WE HAVE HALF A PERCENT
OF OUR TOTAL POLICY COUNTY AND
SANTA BARBARA HAS POINT 3% OF
OUR TOTAL POLICY.
IN SAN BERNADINO COUNTY WHICH IS
THE SECOND LARGEST CONCENTRATION
OF POLICIES OF THE FAIR PLAN.
A FULL QUARTER OF THE POLICIES
IN SAN BERNARDINO COUNTY ARE IN
THREE CITY.
LAKE ARROWHEAD.
BIG BEAR CITY BIG BEAR LAKE NOT
SURPRISING GIVEN THE FACT THAT
IT'S ALL IN THE SAN FERNANDO
MOUNTAIN RANGE OF EVER BEEN
THERE IT'S JUST IT'S A BEAUTIFUL
AREA BUT IT'S A VERY VERY WOODED
AREA.
BURNED IN TWO THOUSAND SEVEN
IT'S A VERY HIGH RISK AREA IT'S
NOT A SURPRISE THAT WE WRITE
BUSINESS THERE.
AGAIN ANOTHER METHOD I WANT TO
DISPEL HALF OF THE POLICIES WE
RIGHT THERE BY THE WAY THAT
DRIVES UP ART LOSS EXPOSURE
SIGNIFICANTLY BY HAVING THOSE
KINDS OF CONCENTRATIONS. 51% FOR
THE POLICIES WE WRITE IN THOSE
THREE CITIES OUR VACATION HOME.
AGAIN ANOTHER METHOD TO SPELL WE
WRITE A LOT OF EDUCATIONAL.
NOW THERE'S A LOT OF TALK ABOUT
AFFORDABILITY AND I JUST WANT TO
TOUCH ON THAT REAL QUICK -- OUR
RATES [inaudible]
OUR PER THE INSURANCE CODE.
RATES FOR THE FAIR PLAN SHALL
NOT BE EXCESSIVE IN ADEQUATE OR
UNFAIRLY DISCRIMINATORY.
AND SHALL BE ACTUAR EARLY SOUND
THE PREMIUMS ARE ADEQUATE TO
COVER EXPECTED LOSSES.
WHAT THAT MEANS IS FAIR PLAN
RATES ARE ESTABLISHED USING FAIR
PLAN PREMIUM LOS EXPERIENCE?
AND DOES IMPORTANT NO FAIR PLAN
IS ALSO NOT SUBJECT ONE OF THREE
I KNOW THIS IS NOT WHAT YOU'RE
GONNA WANT TO HEAR BUT EFFECTIVE
APRIL FIRST THIS PAST MONDAY
[inaudible]
OUR THEIR PLAN WELLING RATES.
INCREASED AN AVERAGE OF TWENTY
POINT 3% [inaudible]
AND I NEED TO POINT OUT THIS IS
A VERY IMPORTANT POINT WE FILE
THOSE RATES LAST YEAR.
LONG BEFORE THE CAMP AND WALLS
IF I GIVEN OUR EXPERIENCE IN.
TWENTY EIGHTEEN WE ARE WORKING
ON ANOTHER RATE FILING AND WE
EXPECT ANOTHER RATE INCREASE BE
EFFECTIVE IN.
TWENTY ONE AGAIN WE ARE REQUIRED
BY THE INSURANCE CODE HAVE
ACTUALLY SOUND RIGHT.
SO WE HAVE TO STAY ON TOP OF IT.
HOWEVER I AM VERY PLEASED TO SAY
THE LAST THREE RATE CHANGES FAIR
PLANTED WE SIGNIFICANTLY REDUCED
RATES IN THE URBAN AREAS BECAUSE
OUR LOSS EXPERIENCE IN THE URBAN
AREAS.
HAS BEEN DESERVING ARRAY TO
CREATE SOME VERY HAPPY TO SAY
THAT WE WERE ABLE TO DO THAT.
SPEAKING OF TWENTY EIGHTEEN
YOU'RE ALL AWARE THERE WAS A CAR
FIRE.
ALL BY.
ON THE SAME DAY THE CAMP ON THE
WALLS THE FIRE.
WILL THE FIRE WAS THE SINGLE
LARGEST EVENT OF THE CALIFORNIA
FAIR PLAN AS EVER EXPERIENCED.
OTHER WILL THE FIRE ALONE.
AS OF TWO DAYS AGO.
OUR LOS X..
ARE LOS EXPECTATION FOR A FINAL
LOSSES AROUND TWO HUNDRED TWENTY
EIGHT MILLION DOLLARS.
THE THREE THOSE THREE EVENTS
COMBINED IN TWENTY EIGHTEEN
WE'RE LOOKING AT ABOUT TWO
HUNDRED AND SEVENTY ONE MILLION
DOLLARS IN LOSSES.
AND THOSE THAT NOW KEEP IN MIND
THAT'S IN ADDITION TO THE
REGULAR EVERYDAY LOSSES THAT WE
GET ON A REGULAR BASIS WE WE GET
NON CONTESTED LOSSES AS WELL.
BY COMPARISON THE TOTAL PREMIUM
WE COLLECTED IN TWENTY EIGHTEEN
WAS SEVENTY SIX BILLION DOLLARS.
TWO HUNDRED SEVENTY ONE JUST FOR
THOSE THREE EVENTS COMPARED TO
SEVENTY SIX MILLION.
SO IT WAS A IT WAS A BIG
FINANCIAL HIT FOR THE FAIR PLAN
[inaudible]
AND OUR EXPOSURE CONTINUES TO
GROW IN THESE AREAS SO OUR RATES
HAVE TO REMAIN.
WHERE WE CAN ACTUALLY CONTINUE
PAYING THESE LOSSES?
NOW WHERE WE GROWING -- WE DO
WITH WE'RE CURRENTLY WRITING THE
TEN YEARS THAT I'VE BEEN RUNNING
THE FAIR PLAN THE LAST SIX
MONTHS FOR THE FIRST SIX MONTH
PERIOD WE HAVE GROWN.
SINCE I'VE BEEN IN CHARGE OF THE
FAIR PLAN [inaudible]
AND YOU KNOW IT'S IMPOSSIBLE FOR
US REJECT HOW MUCH WE'RE GOING
TO GROW WE ARE THE INSURER OF
LAST RESORT WE JUST TAKE
WHATEVER COMES OUR WAY WE DON'T
DO MARKETING IN FACT.
I OFTEN SAY THAT I WORK IN
OPPOSITE WORLD WE TRY TO
ENCOURAGE PEOPLE TO GO TO THE
VOLUNTARY MARKET I SEE ONE OF MY
MISSIONS IS -- TO CONTINUE TO
HAVE THE FAIR PLAN SHRINK ITS
FOOTPRINT.
THAT SAID I'M EXPECTING FUTURE
GROWTH.
I BELIEVE THAT THE FIRE THE
PRIMARY REASON WE'RE GONNA BE
GROWING IS BECAUSE YOU KNOW
COMPANIES ARE.
READJUSTING THEIR PORTFOLIOS AND
WE HAVE NO WAY OF KNOWING.
WHAT'S HAPPENING OUT THERE BUT
WHAT WE NEED TO DO IS THEN
RESPOND TO THE CUSTOMERS THAT DO
COME OUR WAY.
I'M HAPPY TO SAY THOUGH AS OF
THE END OF FEBRUARY.
EVEN THOUGH WE ARE GROWING AND
IT'S AGAINST THE FIRST TIME
WE'VE GROWN IN A SIX MONTH
PERIOD -- IN THE TEN YEARS I'VE
BEEN THERE WERE STILL WERE NOT
EVEN AFTER TWENTY FOURTEEN
POLICY POLICY COUNTS.
SO AT THE MOMENT EVEN THOUGH.
A WE ARE GROWING IT'S NOT TO THE
POINT WHERE IT'S SIDE IT
CONCERNS ME [inaudible]
WE ARE.
WHEN WE LOOK AT THE NUMBER OF
BRUSH WELFARE POLICIES WE'RE
CURRENTLY WRITING WE'RE STILL AT
RIGHT AROUND 2%?
OF THE BRUSH WILDFIRE EXPOS
POLICIES OF THE MEDIUM TO HIGH
IN EXTREME RUSH WILDFIRE EXPOS
POLICIES WHICH IS THE ONE THE
ONES WE WOULD EXPECT TO GET.
WITH ABOUT 2% OF THOSE IN OTHER
WORDS THE VOLUNTARY MARKET IS
STILL CURRENTLY WRITING 98%.
OF THE PROPERTIES THAT ARE
DESIGNATED AS HAVING HIGH OR
EXTREMELY HIGH PRESSURE WELL
PARKS BUT YOU'RE SO THAT'S
THAT'S GOOD NEWS -- AGAIN WE'RE
GROWING BUT WE'RE NOT GROWING
MUCH.
A I HAVE TO STEP OUT FOR A FOR
JUST A FEW MINUTES MR DOT WILL
BE TAKING OVER FOR A BRIEF
PERIOD OF TIME THANK YOU.
THANK YOU VERY MUCH ACTUALLY
THAT'S THE END OF MY ERA WE
PRESENT.
I KNOW IT'S NOT WE ALL WANTED TO
HEAR BUT I I THOUGHT I'D RATHER
JUST HAD IT HEAD ON AND SO THAT
EVERYBODY'S FULLY INFORMED ABOUT
WHAT THE FAIR PLAN IS AND HOW WE
HAVE TO OFFER.
GIVE ME THE QUESTION IS THIS NOW
IF.
THIS IS WHAT INSURANCE COMPANIES
ARE OBVIOUSLY LOOKING AT IS THEY
RICE OUT.
OTHER.
PRIVATE INSURANCE COMPANIES.
AS THEIR PRICING OUT RISKY
LOOKING AT THEIR REST -- A YES.
THE INCREASE THE YOU HAVEN'T.
20% OR SO THIS YEAR.
ALREADY TWENTY TWENTY FOUR
INCREASES FROM.
FROM THAT POINT FORWARD.
IS THAT ENOUGH TO KEEP YOU
ACTUAR REALLY -- SOUND YEAH
MOVING MOVING FORWARD WE ARE
LOOKING AT OUR RATES ON AN
ANNUAL BASIS AND WE'RE ACTUALLY
IN THE MIDST OF DOING RATE
ANALYSIS RIGHT NOW WHICH WILL BE
SUBMITTING TO THE DEPARTMENT OF
INSURANCE.
SOON -- LET'S HOPE SO THE THE
PROBLEM IS YOU CAN'T PREDICT
WHEN THE NEXT CATASTROPHE GONNA
HAPPEN.
AND YOU KNOW JUST LIKE ON MY
COLLEAGUE ON PALMER AT THE CA
YOU KNOW WE WE EFFECTIVELY RUN
CATASTROPHE BUSINESSES SO IT'S
FEAST OR FAMINE EITHER I'M
MAKING A LOT OF MONEY.
AND I'M BANKING NOT.
OR I'M PAYING OUT LIKE I DID IN.
TWENTY EIGHTEEN I IN WAYS THAT
ARE JUST.
MAKE YOUR MIND SPEND BUT WHAT
YOU DO IS YOU LOOK AT THE RATES
OVER THE LONG TERM.
SO YOU CAN'T LOOK AT JUST LIKE
US SHORT OF TIME AND SO.
I'M AN ACTUARIAL STANDPOINT I
BELIEVE WE WILL BE ABLE TO GET
TO ACTUAL SOUNDNESS -- WITHOUT
ANOTHER INCREASE OF THE
MAGNITUDE WE HADN'T TWENTY
EIGHTEEN I JUST WANNA BE REALLY
CLEAR THAT THE ONE THAT'S
ACTUALLY GOING INTO EFFECT NOW I
DON'T BELIEVE WE'RE GONNA NEED
ANOTHER RATE CHANGE.
OF THAT MAGNITUDE AGAIN WE HAVE
TO TAKE A VERY LONG TERM VIEW OF
OUR RIGHT.
YEAH THIS THAT'S QUESTION WILL
PROBABLY -- JOE MY IGNORANCE
TERMS OF HOW THE WHOLE THINGS
ARE FUNDED BUT SO BE IT.
DO YOU USE REINSURANCE AS PART
OF THE PROTECTIONS AND
EVERYTHING FOR THE AIRPLANE WE
DO WE DO BY REINSURANCE I'M NOT
ANYWHERE NEAR WHAT.
WHAT MISTER PALMER I BUYS FOR
THE CA BUT WE DO PURCHASE
REINSURANCE ON AN ANNUAL BASIS?
THAT COST ONE UP BY 67% THIS
YEAR AND LET ME TELL YOU I'M A
REALLY GOOD NEGOTIATOR
REINSURANCE AND THAT'S THE BEST
DEAL I CAN.
SO CALLED THE REINSURANCE COSTS
BUT THE INSURANCE FOR INSURANCE
COMPANY COST. FOR THIS PERIL HAS
GONE THROUGH THE ROOF.
SO AM I AM I TEND TO BE ON THE
LEADING EDGE IN TERMS OF
INDICATORS ONLY BECAUSE WHEN MY
READ ONE MY REINSURANCE --
TREATY RENEWS AND I'M EXPECTING
THE REST OF THE INSURANCE
INDUSTRY IS GOING TO BE BECAUSE
THERE THERE'S RENEW LATER IN THE
YEAR.
GENERALLY SPEAKING I'M EXPECTING
THAT THE REST OF THE INSURANCE
INDUSTRY IS GONNA BE FEELING THE
PINCH AS WELL. FOR MORE ON OKAY
THANK YOU VERY MUCH THANK YOU.
OKAY -- BENJAMIN MCKAY EXECUTIVE
DIRECTOR AND CFO OF THE SURPLUS
SURPLUS LINES ASSOCIATION.
CALIFORNIA WELCOME.
THANK YOU SENATOR DODD THANK YOU
MANY MEMBERS.
YES SURPLUS LINES ASSOCIATION
WERE A LITTLE BIT DIFFERENT OF
AN ASSOCIATION WE'RE NOT A RISK
BEARING ORGANIZATION WERE A NOT
FOR PROFIT ASSOCIATION FOUNDED
IN.
NINETEEN THIRTY SEVEN BUT
NOTABLY I BECAME THE ADVISORY
ORGANIZATION FOR SURPLUS LINES
WERE THE DEPARTMENT OF INSURANCE
IN.
NINETEEN NINETY FOUR AND IN THAT
ROLE WE DO WE CONDUCT SEVERAL
MISSIONS FOR THE DEPARTMENT.
OF MOST IMPORTANTLY ARE
REVIEWING FOR AN INSURANCE
COMPANY SPUR SOLVENCY TO MAKE
SURE THEY CAN EITHER
[inaudible]
AND SECONDLY.
PROCESSING EVERY SURPLUS LINES
ALL SEE WORST MEANT [inaudible]
FOR RENEWAL.
AND LAST YEAR THAT WAS OVER SIX
HUNDRED AND FIFTY THOUSAND ITEMS
THIS YEAR WE THINK IT'S GOING TO
BE.
A NORTH OF SEVEN HUNDRED AND
FIFTY THOUSAND ITEMS.
WE CHECK EACH OF THOSE FOR LEGAL
SUFFICIENCY AND WHERE THEY'RE
LACKING.
WE WE REACH OUT TO THE FILER OR
CORRECTION AND WORK CORRECTIONS
ARE NOT MADE WE THEN
[inaudible]
SUBMIT THOSE.
POLICIES TO THE DEPARTMENT OF
INSURANCE FOR THEIR ACTIONS.
THE PREMIUM ON THOSE POLICIES
LAST YEAR WAS ABOUT SEVEN
HUNDRED ARM SORRY SEVEN POINT
SIX BILLION DOLLARS IN PREMIUM.
I WOULD POINT OUT THAT MOST OF
THE POLICIES THAT GO INTO THE
SURPLUS LINES MARKETPLACE
MARSHALL ALL.
VERY FEW ARE OUR PERSONAL LINES
INTO AND I MAKE THAT DISTINCTION.
IS WHAT WE'RE TALKING ABOUT HERE
IS.
LARGELY PERSONAL.
ONE AND SO I WOULD.
A DIRECT YOUR ATTENTION TO THIS
DOCUMENT -- DOCUMENT THAT SAYS
THE INSURANCE UNIVERSE.
AND IF YOU GO THROUGH IT.
THIS IS REALLY JUST WHEN I
WORKED IN GOVERNMENT FIFTEEN
YEARS THERE WAS AN OLD SAYING
THAT SAID FOR EVERY.
ACTION GOVERNMENT HAS AN EQUAL
KNOCKS IT OVER REACTION.
AND I THINK THAT'S I THINK
THAT'S LARGELY BECAUSE WE FAILED
TO HAVE A SENSE OF MAGNITUDE AT
LEAST THAT WAS MY EXPERIENCE IN
MY FIFTEEN YEARS.
SO I WANTED TO PROVIDE THAT SO
IF WE HAVE THE INSURANCE
UNIVERSE.
YOU KNOW THERE'S REALLY THERE'S
PROPERTY.
THE LIFE AND WE'RE JUST TALKING
HERE ABOUT PROPERTY.
THAT'S ABOUT.
FORTY EIGHT THEN IF YOU TAKE
THAT 48% YES THEY HOW MUCH IS
PERSONAL PERSON FIRST BILL.
WILL 69% OF THAT IS PERSON. 69%
OF FORTY EIGHT AND IF YOU TALK
ABOUT HOMEOWNER TO DOWN 231% OF
THAT BY.
THEN IF YOU'RE TALKING ABOUT.
WHEN?
MY PARK.
FIND WERE TWO POINT 4% OF THE
MARKET.
LIVER AND SURPLUS LINES. ONE
WORK NINETY SEVEN NINETY SEVEN
POINT.
SIX IT MADE A PART.
THE DISTINCTION BEING THE
ADMITTED MARKET ARE [inaudible]
PERRANCE -- LICENSED BY THE
STATE HELLO.
SURPLUS LINES CARRIERS.
ARE LICENSED BY SOMEBODY ELSE
[inaudible]
THE BATA.
IT'S SOMEBODY WHO IN INSURANCE --
THAT'S NOT [inaudible]
TERMINOLOGY [inaudible]
MAKES.
WARREN CARRIERS.
THAT ARE IN OUR LICENSE.
OUTSIDE OF CALIFORNIA BUT IN THE
UNITED STATES.
SO IF YOU'RE A WASHINGTON
DOMICILED INSURANCE.
IF YOU'RE DOMICILED IN JAPAN.
IN YOUR TUTORED IN.
SO AND THEN THE PROCESS OF
SENDING A POLICY.
TO ADD THAT.
WE SENT THE EXPORT OF POLICY.
YOU REALLY ARE.
BUT BUT LATER.
THE BATTERY ACT.
THAT'S OUT THIS TERMINOLOGY.
HOW DO YOU DO THAT?
THIS DOCUMENT THIS IS A NOT
SUPER SIMPLISTIC BUT LITTLE BIT
SIMPLISTIC FLOW CHARTS ARE TO
THE TOP WITH THE INSURANCE --
NONE OF THE WELL I JUST LIKE
THIS BUT TO THE INSURED.
ENTERED GOES TO THEIR RETAIL.
EIGHT THE MESSAGE IN THIRTEEN BE
A COMMERCIAL AND OR BIRTH.
THEY GO TO THEIR THEIR
RETALIATION INTO IT THERE I NEED
A POLICY ON MICHAEL.
I'M IN A FIRE ZONE OR ON THE
MOTHER.
KNOWN OR A BUILDING A BUILDING
IN DOWNTOWN.
AND AND I NEED TO GET IN.
THAT RETAIL INSURED WILL HAVE
CERTAIN MARKET YOU MAY WORK.
ON THAT YOU MIGHT HAVE HEARD OF
THE NEW WILL ALSO BE A PRESS OF
ALL THE ONES THAT YOU TO BE.
ADVERTISED [inaudible]
CONSTANTLY.
THEY WOULD BIRTH BIRTH PLACE
THAT BUSINESS.
THEN THEY WOULD GET FULL
COMMISSION AND THEY WOULD MAKE
THEIR WITH THEM EVER LATE.
VERY HAPPY.
ALL BUT IN SOME INSTANCES THAT
WON'T WRITE THAT POLICY.
NOW THE RETAIL AGENT BILL
WANTING TO SATISFY THE CUSTOMER
HAS TO FIND IN.
THEY GO TO WITH PAUL THE
WHOLESALER OR A SURPLUS LINES.
THEY FIND OTHER MARKETS PLEASE
OF LONDON WITH AN EARLY THAT'S A
LARGE.
US SURPLUS MIGHT MARK -- INTEL.
AND SO THAT WHOLE SILLY THEN.
VOIGTS THE GHOST POLICY.
BRING IT THE RETAIL THE RETAILER.
NOW INTERESTINGLY AT LEAST
TALKING ABOUT THE ONE EIGHT WE
STILL HAVE THAT RULE.
THEY DON'T HAVE IT.
THE SURPLUS LINES BROKERAGE
ASKED GO TO THREE MINUTE
INSURANCE.
ASKED RIGHT ALL [inaudible]
RIGHT BACK [inaudible]
ANY.
WE HAVE TO GET RE DECLINATION.
DOES THAT MAKE GOING TO BE BLACK
[inaudible]
RIGHT [inaudible]
ALSO.
THE MINI MART.
THAT CAN YOU.
THAT'S THAT'S HOW THIS HAPPENED%
A BIT OF A LABORIOUS PROCESS THE
INCENTIVES ARE NOT PLEASE.
WHEN THAT RETAIL AGENT?
DOES THE WHOLESALER -- SPLITTING
THEIR THERE THE FINANCIAL
INCENTIVE IS THE DENTIST GOING
[inaudible]
OR THAT'S ONE OF THE WAYS THAT
NGUYEN SURE THAT THE PREFERRED
MARKET.
THAT YOU THERE ON THAT IS IT
MARKET WE NEED TO SAY.
THEIR PLAN ONE SAFETY BELT --
HOMEOWNERS WERE THE OTHER STATE.
IT IT.
IN A LOT OF TIMES SB.
ALL OF DOESN'T COVER DENTAL IT.
I WANT YOU CAN GET THOSE PROMOTE
WHERE YOU CAN GET THOSE.
OR YOU CAN JUST GET ALL.
NOW THERE'S BEEN THIS.
A LITTLE BIT OF AN OUT RIGHT
BECAUSE YOU ARTICLE ABOUT.
THE PERCENTAGE INCREASE POLICY.
AND IT'S IT'S INSATIABLE ISM IN
MY ARE YOU.
BUT THE INCREASED FROM.
TWENTY FOURTEEN TWENTY EIGHT HAS
BEEN YOU KNOW SOME ENORMOUS
RESPECT.
BUT IN ACTUAL POLICY NOW.
YOU KNOW YOU'RE TALKING ABOUT AN
INCREASE FROM. THIRTY THOUSAND
POLICIES [inaudible]
ALL.
THERE FOURTEEN MILLION ALL
[inaudible] OH FIVE YES THERE'S
THERE'S DEFINITELY BEEN A PART
IN IT.
IT'S BEEN A SMALL ACT.
I JUST SAY THAT AGAIN PERCENT
[inaudible]
HE THE OTHER THINGS WE DO. ONE
IS THE STATION.
YEAH MY COMMENT.
BROKE FOLLOWING BOUGHT LIKE THAT
LIKE MAKING SURE THAT IT'S NOT
COMPETING ON PRICE NOT ALLOWED.
TO WE DO THAT THROUGH REVIEWS
THE MARKET AND EIGHTY EIGHT THAT.
THANK YOU FOR THAT I'M GONNA.
GET EXCUSE ME FOR HAVING TO STEP
OUTSIDE AT THIS POINT I WILL
OPEN IT UP FOR ANY OF OUR
MEMBERS WISHING TO ASK ANY
QUESTIONS.
GOODNESS MORE LIKE OKAY WELL
THANK YOU TO ALL THREE OF YOU
FOR BEING HERE AND TAKING THE
TIME REPRESENT A LOT OF
INFORMATION A LOT OF GOOD
INFORMATION CELL THANK YOU FOR
INFORMING US SANTA.
WE'LL SEE YOU SOON THANK YOU.
NEXT OUT WE WILL INVITE AT THE
FOURTH PANEL WHICH IS A STATE
COMPENSATION INSURANCE FUND.
AND WE WILL HEAR FOR VERNE
STEINER PRESIDENT AND CEO OF THE
STATE COMPENSATION INSURANCE
FUND WORKERS COMPENSATION IS
PARTICULARLY DIFFICULT LINE OF
INSURANCE AND THEY FUND HAS
PLAYED A CRITICAL ROLE IN MAKING
SURE EMPLOYERS HAVE ACCESS TO
COVERAGE ESPECIALLY.
DURING DIFFICULT PERIOD SIDE
THANK YOU SO MUCH FOR BEING HERE
YOU HAVE THE FRAZIER.
GOOD MORNING CHAIRMAN RUBIO AND
MEMBERS OF THE COMMITTEE -- AS
YOU JUST SAID MY NAME IS VERNE
CENTER I'VE BEEN THE CEO AT
STATE FUND.
FOR ABOUT FIVE YEARS I STARTED
IN JUNE.
TWO THOUSAND FOURTEEN I'M
HONORED AND REALLY HUMBLED TO
SERVICES BECAUSE OF THE UNIQUE
AND IMPORTANT ROLE THAT STATE IN.
PLACE IN CALIFORNIA'S ECONOMY IN
THE WORKERS COMPENSATION SYSTEM
AND BECAUSE OF THE THOUSANDS OF
HARD WORKING EMPLOYEES THAT I
REPRESENT.
I WAS GREETED BY THE CALIFORNIA
LEGISLATURE MORE THAN A HUNDRED
YEARS AGO.
AND IT PLAYS A UNIQUE AND
IMPORTANT ROLE IN.
THE CALIFORNIA ECONOMY AND
WORKERS COMPENSATION SYSTEM.
IT ET WE'RE UNIQUE IN THAT WE
ARE A NOT FOR PROFIT PUBLIC
ENTERPRISE.
AB CHARGED WITH TWO ROLES TO BE
AVAILABLE MARKET.
YOU HEARD EARLIER -- BUT ALSO TO
COMPETE FAIRLY IN THE INSURANCE
MARKET PLACE.
SO WE ARE NOT SOLELY A MARKET OF
LAST RESORT FOR WORKERS
COMPENSATION INSURANCE LIKE YOU
HEARD WITH SOME OF THE OTHER.
ORGANIZATIONS THAT YOU LISTEN TO
THAT.
WE ARE A A AD I'M NOT FOR PROFIT
AND PUBLIC ENTERPRISE -- BUT WE
OPERATE SOLELY OFF OF THE THE
PREMIUMS AND INVESTMENT.
INCOME THAT WE GENERATE WE DON'T
OPERATE OFF OF ANY TAX DOLLARS
NO -- PUBLIC FUNDS GOING TO
STATE.
WE'RE GOVERNED BY AN INDEPENDENT
BOARD OF DIRECTORS WHICH HAS
BEEN GRANTED AUTHORITY OVER
STATE FUNDS FINANCES AND
OPERATIONS BY THE STATE
CONSTITUTION AND INSURANCE CODE.
IS STATUTES DICTATE THAT THE
STATE FUND BOARD OF DIRECTORS
OPERATE IS FULLY AND COMPLETELY
AS THE GOVERNING BODY OF A
PRIVATE INSURANCE.
CALIFORNIA'S WORKER'S
COMPENSATION MARKET AND THE
EMPLOYERS AND INJURED WORKERS IT
SIR IS RELY ON THE MODERATING
AND STABILIZING INFLUENCE AND
THE CRITICAL SAFETY NET THE
STATE AND PROVIDES.
IF THE PRIVATE MARKET WILL NOT --
INSURE A BUSINESS DAY FUND WILL.
THE IMPORTANCE OF STATE FUNDS
SAFETY NET ROLE IS PARTICULAR
HIGHLIGHTED WHEN THE MARKET
CONDITIONS WORSEN AND PRIVATE
INSURANCE CARRIERS SCALE BACK
THEIR OFF SAID I THINK WE HEARD
EARLIER.
FROM ABOUT THE TIME WHEN TWENTY
SIX CARRIERS WHEN INSOLVENT.
WELL THAT'S THAT WAS IMPORTANT --
TEST OF ONE OF STATE FUNDS MAIN
FUNCTIONS BACK IT FROM.
TWO THOUSAND ONE AND TWO
THOUSAND FOUR WHEN THOSE
CARRIERS WENT -- BECAME
INSOLVENT.
ABOUT 25% OF MARKET CAPACITY
EVAPORATED.
ALSO MANY NATIONAL CARRIERS
RETREATED FROM CALIFORNIA AS IT
WAS A VERY DIFFICULT MARKET.
THE FUND GREW INTO INCREDIBLY
SHORT PERIOD OF TIME LONG
CREATED MY IN YOUR STATE FUN BUT
IT GREW.
IN A YEAR OR TWO FROM 1518% OF
MARKET 53% OF THE MARKET.
THAT'S IT HAD EIGHT BILLION
DOLLARS A PREMIUM IT WAS THE
LARGEST WORKERS COMPENSATION
CARRIER IN THE COUNTRY BY
PREMIUM BACK IN THAT.
TIME.
THEN THE LEGISLATURE STARTED TO
ADDRESS SOME OF THE INSTABILITY
IN THE CALIFORNIA WORKERS
COMPENSATION SYSTEM.
AND BEGINNING IN TWO THOUSAND
AND FOUR THE REFORMS WERE
INTRODUCED THERE WAS A PERIOD OF
RELATIVE STABILITY.
IN WORKERS COMPENSATION THAT IS
MORE OR LESS CONTINUED SINCE
THAT TIME.
AND ACCELERATE BACK IN TWO
THOUSAND AND TWELVE WITH SB.
EIGHT SIXTY THREE AND WE WENT
FROM GROWING TREMENDOUSLY
OVERNIGHT TO CONTRACT BEING
EXTREMELY QUICKLY AS THE PRIVATE
MARKET WANTED TO COME BACK INTO
THE WORK COMPENSATION SYSTEM.
SO HAVING EXPERIENCED S..
WE WILL LET ME SAY WITH IT.
AB CURRENTLY D.
V. WORKERS COMP IN THIS
ENVIRONMENT IS ENJOYING ONE OF
THE LONG GUESS I'M COMPETITIVE
MARKET CYCLES CERTAINLY IN MY
CAREER.
HI AND THE BENEFITS OF SB SIXTY
THREE WHICH REFORM THE WORKERS
COMPENSATION SYSTEM BACK IN TWO
THOUSAND AND TWELVE CONTINUE TO
DRIVE RATE.
DECREASES AND SO EMPLOYERS AND
WORKERS ARE BENEFITING FROM
THOSE RATE DECREASES EMPLOYERS
HAVE A LOT OF OPTIONS FOR
WORKERS COMPENSATION INSURANCE
TODAY.
SO HAVING EXPERIENCED THE
EXPLOSIVE GROWTH FROM
200-022-0006 -- AND THEN THE
RAPID CONTRACTION THAT STATE
FUND EPERIENCE FROM
200-072-00012 WE USE THIS PERIOD
OF RELATIVE STABILITY TO BUILD
OUR FINANCIAL STRENGTH AND RISK
MANAGEMENT STRUCTURE AND ENSURE
WE CAN MEET OUR EXISTING
LIABILITIES.
AND A POTENTIAL DISASTERS AND
ABSORB ADDITIONAL MARKET SHARE
IF NEEDED IN THE FUTURE.
TODAY WE SURE ENSURE
APPROXIMATELY A HUNDRED TEN
THOUSAND CALIFORNIA BUSINESSES
AND WE WROTE ONE POINT THREE
BILLION IN PREMIUM IN.
TWO THOUSAND EIGHTEEN MAKING US
ONE OF THE LARGEST WORKERS
COMPENSATION JURORS IN THE
NATION.
WE'VE OFFICES THROUGHOUT THE
STATE AND APPROXIMATELY FORTY
THREE HUNDRED EMPLOYEES FOCUSED
ON HELPING BUSINESSES AND
INJURED WORKERS I PREMIUM WE
INSURE APPROXIMATELY 11% OF THE
CALIFORNIA MARKET.
IN ORDER TO REST EFFECTIVELY
SERVE AS BOTH A MARKET OF CHOICE
AND AS A SAFETY NET FOR
EMPLOYERS IF NOT FIND INSURANCE.
IN THE PRIVATE MARKET.
WEHAVE TO MAINTAIN A HEALTHY
MIX OF BUSINESS.
THIS SOMETIMES IN THE PAST A
STATE PLAN IS BEEN REFERRED TO
LIKE YOUR PLAN AS A MARKET OF
LAST RESORT.
IF WE ARE MARKET OF LAST RESORT
AND ONLY HAVE THE BUSINESS THAT --
CAN'T FIND A HOME ANYWHERE ELSE
WE WON'T BE IN A POSITION TO
FLEX WHEN THE CALIFORNIA MARKET
NEEDS US.
SO TO ENSURE STATE FIVE TO
ENSURE THE STATE FINE CAN COME
EFFECTIVELY IN A QUICKLY
INVOLVING INSURANCE MARKET WE
HAVE BEEN ENGAGED IN A LARGE
SCALE.
TRANSFORMATION EFFORT THAT HAS
IMPROVED THE ORGANIZATION'S
CULTURE FINANCIAL STRENGTH
CORPORATE GOVERNANCE OPERATIONAL
EFFECTIVENESS CUSTOMER SERVICE
AND QUALITY.
ALTHOUGH WE HAVE MORE WORK AHEAD
OF US OUR EFFORTS TO DATE HAVE
YIELDED POSITIVE RESULTS AND
PROVIDE IMPORTANT BENEFITS
CALIFORNIA BUSINESSES INJURED
WORKERS.
WE MEETING SIGNIFICAN STRIDES IN
IMPROVING THE QUALITY OF A CLAIM
OPERATIONS. TO ACHIEVE BETTER
OUTCOMES FOR EMPLOYERS AND
INJURED WORKERS.
WE'VE BEEN OVERHAULING OUR
TECHNOLOGY BY REPLACING LEGACY
PLATFORMS WITH STREAMLINED
MODERN SYSTEMS TO MAKE IT EASIER
FOR CUSTOMERS TO DO BUSINESS
WITH US AND STRENGTHEN OUR
CYBERSECURITY POSITION.
AND THAT ARE THE TECHNOLOGY
PLATFORMS THE NEWER PLATFORMS
ARE LESS EXPENSIVE TO MAINTAIN.
WE'VE BEEN BUILDING A CULTURE
THAT WILL SUPPORT OUR VISION TO
BECOME CALIFORNIA'S WORKER'S
COMPENSATION.
CHOICE.
WITH THE LIVING A BETTER
EXPERIENCE FOR OUR CUSTOMERS AND
WE'RE PROVIDING INDUSTRY
LEADERSHIP IN FIGHTING FRAUD.
I'D LIKE TO HIGHLIGHT TO AREAS.
WHERE WE BELIEVE WE'VE LED THE
WAY IN MAKING A POSITIVE IMPACT?
IN THE WORKERS COMPENSATION
SYSTEM AND WHERE WERE ABOUT TO
LAUNCH A NEW TECHNOLOGICAL
IMPROVEMENT TO IMPROVE INJURED
WORKER AND MEDICAL PROVIDER
EXPERIENCE.
FIRST I'D LIKE TO TALK ABOUT A
ABOUT THE OPIOID EPIDEMIC -- AND
STATE FUNDS REACTION TO IT. FOR
YEARS NOW THE COUNTRY'S BEEN
EXPERIENCING OPIATE OPIATE AT
EPIDEMIC AND IT BECAME VERY
OBVIOUS THAT.
WORKERS COMPENSATION WAS A HOT
SPOT WHERE PEOPLE I MEAN.
ADDICTED.
TO PAIN KILLERS THAT WERE
ORIGINALLY INTRODUCED FOR END OF
LIFE CANCER PAIN AND WE'RE BEING
USED.
ALL TOO FREQUENTLY.
WE LAUNCHED IN TWO THOUSAND
FOURTEEN A COMPREHENSIVE OPIOID
REDUCTION STRATEGY.
AND IN THAT TIME FRAME WE'VE
BEEN ABLE TO REDUCE THE NUMBER
OF PRESCRIPTIONS THE INJURED
WORKERS BY 71% OVER THE LAST
FIVE YEARS.
THE NUMBER OF PATIENTS TAKING
HIGH DOSES OF OPIOIDS DALY
MORPHINE EQUIVALENTS BETTER
DANGEROUS HAS BEEN REDUCED FROM
ONE THOUSAND FOUR HUNDRED AND
FIFTY EIGHT TO ONE HUNDRED
AMONGST OUR INJURED WORKERS.
THE STRATEGY TOOK A TWO PRONGED
APPROACH WHICH INCLUDED EARLY
PREVENTION NEW CASES AND
REDUCTION OF CHRONIC OPIATE
USAGE AN EXISTING CASE.
THE STRATEGY ALSO INCLUDED
ELEMENTS SUCH AS PEER TO PEER
PHYSICIAN REVIEW PROGRAMS
EDUCATION FOR INJURED WORKERS
ENTRY OF IT BEING PHYSICIANS.
AND FUNCTIONAL RESTORATION
PROGRAMS GRAINGER WORKERS TAKING
CHRONIC HIGH LEVEL OF THIS
EFFORT WE HAVE HELP TO IMPROVE
AND POTENTIALLY SAVE THE LIVES
OF MANY INJURED WORKERS.
ALSO LIKE TO TALK ABOUT THE
UTILIZATION REVIEW WITH IS A HOT
TOPIC IN THE WORKERS
COMPENSATION SYSTEM.
IN MAY NEXT MONTH STATE FUND
WILL LAUNCH A NEW UTILIZATION
REVIEW MANAGEMENT SOLUTION FOR
CALLING YOU ARE CONNECTED.
THIS SOLUTION EMPOWERS DOCTORS
TO TREAT PATIENTS FASTER AND
MORE EFFECTIVE.
YOU ARE CONNECTED WILL HELP US
PROVIDE DOCTORS WITH GREATER
PERSPECTIVE BUT LACKS ABILITY.
AND HELP REDUCE THE IMPACT OF
SYSTEM WIDE ADMINISTRATIVE
PROCESSES ON INJURED WORKERS
TREATMENT AND RECOVERY.
YOU ARE CONNECTED RESPONSE IN
REAL TIME TO DR STREET NEAR
REQUEST THIS ALLOWS INJURED
WORKERS TO RECEIVETHE CARE THEY
NEED FASTER CIVIC AND RECOVER AS
QUICKLY AS POSSIBLE.
UNDER CALIFORNIA LAW DOCTORS ARE
REQUIRED TO RECEIVE
AUTHORIZATION BEFORE THEY CAN
PROVIDE TREATMENT AND THE LAW
ALLOWS UP TO FIVE DAYS FOR THIS
REVIEW.
PROVIDING TREATMENT
AUTHORIZATION IN REAL TIME
ALLOWS DOCTORS TO ESTABLISH A
TREATMENT PLAN AT THE TIME OF
CARE. FOR THE INJURED WORKER
KNOWS IMMEDIATE WHETHER NEXT
AXLE.
THIS REDUCES STRESS ON THE
PATIENT AND IMPROVED TREATMENT
EFFICIENCY THROUGHOUT THE SYSTEM.
IN ADDITION TO PROVIDING REAL
TIME AUTHORIZATION FOR TREATMENT
WITHIN THE CALIFORNIA MEDICAL
TREATMENT UTILIZATION SCHEDULE
THAT'S A MOUTHFUL.
I AM CREATING THIS ELECTRONIC
CONNECTION WITH PARTICIPATING
PROVIDERS WILL ALSO ENABLE US TO
PROVIDE GREATER FLEXIBILITY.
TO PROVIDERS TO CUSTOMIZE
TREATMENT PLANS FOR THEIR
PATIENTS WHEN THEY WOULD LIKE TO
TRY TREATMENT DOES NOT CLEARLY
WITHIN THE GUIDELINES BUT COULD
BE HELPFUL TO EXPAND IT RECOVERY.
I REDUCING THE ADMINISTRATIVE
BURDEN ON PROVIDERS AND REDUCING
THE TIME IT TAKES TO GET
TREATMENT FOR INJURED WORKERS
WILL BOTH REMOVE COSTS IN THE
SYSTEM THAT DO NOT GO DIRECTLY
TO INJURED WORKER BENEFITS AND
SPEED UP TREATMENT AND RECOVERY.
WITH A FOUNDATION OF MORE THAN A
HUNDRED YEARS SERVING CALIFORNIA
STATE FUND IS A RELIABLE
PROVIDER OF WORKERS COMPENSATION
INSURANCE FOR THOUSANDS OF
BUSINESSES.
HAVE A STRONG FOUNDATION ON
WHICH WE ARE COMMITTED. TO
BUILDING A MORE MODERN
COMPETITOR INSURANCE KERRY WITH
A HELPFUL AND RISK THE WORK
FORCE AS WE CONTEMPLATE THE
FUTURE WE'D LIKE EVERY OTHER OR
EVERY ORGANIZATION BASED MANY
CRITICAL ISSUES.
SOME OF THOSE CHALLENGES INCLUDE
CONTINUED SUCCESSFUL INVITATION
OF CRITICAL TECHNOLOGY THAT WILL
OUR OPERATIONS THE SCALE MORE
EFFECTIVELY IMPROVE OUR
CUSTOMERS EXPERIENCE.
ENSURING OUR INFORMATION
TECHNOLOGY SYSTEMS MEET THE EVER
GROWING.
DEMAND FOR CYBERSECURITY.
EXCESSIVELY LAUNCHING OUR NEW
AND INNOVATIVE INCENTIVES SAFETY
PROGRAMS.
AND USING INNOVATION INTO THE
ORGANIZATIONS ARE DISCIPLINED
APPROACH TO ENSURE THE
ORGANIZATION IS ACTIVELY
PREPARING TO MEET SHIFTING
MARKET DEMANDS.
DEVELOPING EFFECTIVE LEADERSHIP
SUCCESSION PLANS MISTER STATE
BANS LEADERSHIP REMAINS STRONG
AND CONTINUE TO ADVANCE A MATURE
AN ENTERPRISE RISK MANAGEMENT
PROGRAM THAT REINFORCES CAPITAL
MANAGEMENT.
INCREASE ENVIRONMENT OF RISK
EDUCATED DECISION MAKING.
I WILL END BY THANKING YOU FOR
YOUR LEADERSHIP.
AND I LOOK FORWARD TO WORKING
WITH THE LEGISLATURE OVER THE
COMING YEARS TO STRENGTHENED
CALIFORNIA'S WORKERS
COMPENSATION SYSTEM AND HELP
KEEP CALIFORNIA WORK.
THANK YOU VERY MUCH MR STEINER I
REALLY APPRECIATE YOU STOPPING
BY AND SHARING THE INFORMATION
AND DOWN.
I'M JUST MOVING FORWARD IN THE
INTEREST OF TIME WE HAVE TO
CLEAR OUT SOON BUT I JUST WANT
TO THANK YOU AND HAVE ALL THE
OTHER PALACES STOP BY TODAY IT'S
REALLY AN IMPORTANT THAT WE
SHARE THIS ESPECIALLY.
I MEAN SO MANY NEW MEMBERS ON
THIS COMMITTEE SO REALLY THANK
YOU FOR YOUR TIME AND BEFORE WE
CLOSE.
I WANTED TO INVITE OUT MEMBERS
OF THE PUBLIC TED TO MAKE.
BRIEF INTRODUCTIONS ON SORRY.
I KEEP MISSING YOU I'M MY
APOLOGY SIR.
THE HIT.
THE PERSON I ATE MY APOLOGIES
YOU KNOW MR MORE LIKE PLEASE AND
ASK YOUR QUESTION WHAT IS YOUR
MARKET SHARE NOW.
ABOUT 11% BY PREMIUM.
AND THEN -- YOUR BALANCE SHEET
LOOK.
WE ARE FINANCIALLY VERY STRONG
WE HAVE A PLUS THAT WE BELIEVE
WILL ALLOW US TO WITHSTAND.
A ONE IN ONE HUNDRED YEAR KIND
OF CAT CAT IS THE TASK VIEW TO
THE CALIFORNIA SYSTEM AND STILL
REMAIN.
TWICE THE MINIMUM RISK BASED
CAPITAL REQUIRED.
TO AVOID BEING CONSERVE -- YOUR
NONPROFIT AND OF ATTACHED TO THE
STATE [inaudible]
YOU HAVE.
I'M MASSIVE CLAIMS [inaudible]
SOMETHING HAPPENS.
THEN YOU MAKE IT UP WITH RATE
INCREASES.
WELL IF WE HAD IF WE HAD KEPT.
CATASTROPHIC CLAIM INVENTIVE
DEPEND ON WHAT IT.
WHAT IT WAS -- IF IT WAS
EARTHQUAKE RELATED OR TERRORISM
RELATED WE HAVE REINSURANCE.
BUT GENERALLY YOU RATE INCREASES
COME FROM CHANGES IN THE
UNDERLYING CONDITIONS NOT CAT
CATASTROPHES I MEAN SO THAT WILL.
OCCUR ADAMCATASTROPHE I HAVE
NOTHING IN MIND I'M JUST.
WELL WHAT HAPPENS IF.
YOUR RESERVES RUN LOW
[inaudible]
YOU.
I'M TO US -- NO THEY WAIT A
SECOND YOU KNOW WE'RE STRUGGLING
OR YOUR RAISE RATES AND YOU
DON'T I'M COMPETITIVE YOU BECOME
LESS THAN.
ELEVEN AND I WE OPERATE JUST
LIKE EVERY OTHER INSURANCE
CARRIER WE YOU KNOW WE'RE IN A
COMPETITIVE RATE ENVIRONMENT IT
BUT WE ALSO HAVE TO KEE OUR
RESERVES A STRONG AND SO.
ABSOLUTELY IF.
IF RESULT STARTED DETERIORATE.
ACTUAR ELLIE WE WOULD LOOK AT
THAT AND WE WOULD FILE OF A RATE
CHANGE THAT WAS NECESSARY TO
ADDRESS THAT BUT WE DO HAVE
SIGNIFICANT SURPLUS SO THAT WE
COULD WITHSTAND SOME
DETERIORATION WITHOUT NEEDING
ANY KIND OF A SPECIAL ASSESSMENT.
WE HAVE TO CHANGE RATES ON AN
ONGOING BASIS FIFTEEN YEARS
AFTER TWO THOUSAND OR WERE.
CRUISING AT A I WOULD SAY WHERE
IT FINANCIALLY AS STRONG AS
WE'VE EVER BEEN.
THANK YOU VERY MUCH OUT ONCE
AGAIN THANK YOU OFFER FOR COMING
HERE TODAY AND DIET HELPS INFORM
OUR DECISION AS WE MOVE FORWARD.
WE REALLY APPRECIATE YOUR TIME
THANK YOU.
AND I DID -- YOU KNOW I WOULD
LIKE TO JUST GIVE COLLECTIVELY
AMENDED TO ANYBODY THAT WANTS TO
INTRODUCE THEMSELVES AND MAKE
ANY COMMENTS.
THE NO INTEREST I THE NO
INTEREST I WILL ADJOURN THIS
MEETING THANK YOU VERY MUCH
EVERYONE FOR COMING AND HAVE A
WONDERFUL AFTERNOON THANK YOU TO
THE COMMITTEE MEMBERS AS WELL.
THANK YOU