YOU FOR BEING UP HERE WITH ME
EARLY IN THE MORNING AS YOU CAN
SEE WILL HAVE.
SO MANY THINGS TO TAKE CARE OF
THIS MORNING SO I REALLY
APPRECIATE YOUR TIME.
THE FOCUS OF THIS HEARING WILL
BE ON HOMEOWNERS INSURANCE
AFFORDABILITY AND ACCESSIBILITY.
IT WILL AND FORMER DECISION
MOVIE FORWARD TO HOPEFULLY COME
UP WITH A VIABLE SOLUTIONS.
THAT THAT WAS HAPPENING IN THE
FIRE -- WELFARE CRISIS -- SO
LAST OCTOBER THIS COMMITTEE HELD
A JOINT HEARING WITH THE
ASSEMBLY INSURANCE COMMITTEE AT
NAPA COLLEGE WIH THE HELP OF
THEN.
SENATOR GLAZERS SOMEONE AT THE
INCOME FOR THAT -- THEIR FOCUS
WITH THE RECOVERY EFFORTS IN THE
COMMUNITY SEND PACKED UP BY THE
WILD FIRES IN THE YEAR PRECEDING
THE HEARING CALIFORNIA HAD ITS
TWO LARGEST WILDFIRES IN HISTORY.
THE MAN TO SEE -- COMPLEX FIRE
AND THE THOMAS FIRES.
JUST.
A YEAR PRIOR THE TUBS FIRE
BECAME THE STATE'S THIRD LARGEST --
WILDFIRES AT THE TIME THE
COMMITTEE MEMBERS HOW DIFFICULT
IN PASSIONATE DISCUSSIONS ABOUT
THE UNDERWHELMING STATE OF
RECOVERY IN THAT REGION.
INCLUDING PALM THOSE PROBLEMS
WITH ADJUSTERS AND CHRONIC UNDER
INSURANCE ISSUES.
FORTUNATELY A LITTLE OVER A WEEK
AFTER THE HEARING ACCOUNTABILITY
FIRE STARTED.
WELL THE THREE PREVIOUS FAR
SHOWED WEAKNESSES IN OUR
HOMEOWNER'S INSURANCE MARKET.
RESPONSE IN PLANNING THE
DEVASTATION OF THE CAMPFIRE
EXPOSED SYSTEMATIC WEAKNESSES IN
OUR STATES INFRASTRUCTURE AND
DISASTER PREPAREDNESS.
IT'S STARTING OPEN OUR EYES TO
THE POSSIBILITY OF COMMUNITIES
BEING DEVASTATED COMPLETELY A
KILLED AT LEAST EIGHTY FIVE
PEOPLE AND DISPLACED 87%.
OF THE TOWN OF PARADISE AS A
RESULT SHE COULD KEEP GOING
OROVILLE HAVE SEEN THE
POPULATIONS GO BY 20% EACH.
PLACING ADDITIONAL PRESSURES ON
PUBLIC SERVICES AS WELL AS THE
REGIONAL ENVIRONMENT JOB MARKET
AND HOUSING STOCK.
THE CAMPFIRE DISASTER HAS
ELEVATED THE CONVERSATION ON
WILDFIRES THE FACT ON THE STATE
MAKING IT A TOP PRIORITY ACROSS
A VARIETY OF POLICY AREAS.
GOVERNOR NEW SOME CREATED A
STRIKE FORCE ALMOST AS SOON AS
HE TOOK OFFICE TO STUDY A REPORT
ON WILDFIRES INTERPLAY WITH
CLIMATE CHANGE AND THE
CALIFORNIA ENERGY MARKET.
LESS THAN A MONTH AGO THE STRIKE
TEAM RELEASED THE REPORT AND THE
GOVERNOR CALLED ON THE
LEGISLATURE TO ACT WITHIN NINETY
DAYS TO SUBSTANTIALLY IMPROVE
HOW E AS A STATE PREVENT AND
RESPOND TO WILDFIRES.
THE REPORT CALLED SPECIFICALLY
FOR THE LEGISLATURE AND THE
INSURANCE COMMISSIONER. TO
CONSIDER THE FOLLOWING.
SHOULD ALL INSURERS BE OBLIGATED
TO OFFER INSURANCE TO HOMEOWNERS
LIVING IN THE WILDLAND URBAN
INTERFACE FOR THE INSURED
PERFORMED SPECIFIC WILDFIRE
MITIGATION.
SHOULD ALL INSURERS BE OBLIGATED
TO OFFER REDUCED RATES FOR THOSE
HOMEOWNERS AND COMMUNITY SAID
pMITIGATION MEASURES.
SHOULD INSURERS BE OBLIGATED TO
OFFER CONSUMERS WERE L.
INELIGIBLE FOR HOMEOWNERS POLICY
EITHER A DIFFERENCE IN CONDITION
POLICY OR A PREMISES LIABILITY%
POLICY.
AS COMPLEMENTARY COVERAGE FOR A
FAIR PLAN FIRE POLICY.
LASTLY THE CALIFORNIAN SHARON'S
GUARANTEE ASSOCIATION POLICY
LIMITS HAVE NOT BEEN INCREASED
FOR A LEAST TWO DECADES.
IS IT TIME TO INCREASE THE
CURRENT LIMIT OF FIVE HUNDRED
THOUSAND TO RECOGNIZE THE
CURRENT CONSTRUCTION COST.
AS A RESULT THE SENATE HOUSE
ESTABLISHED SELECT COMMITTEE ON
THE WILDFIRE REPORT.
OF WHERE TO MYSELF SENATOR JONES
FORGES DOT WESSEL MORE LOCK ARE
PART OF WE ALL KNOW THAT FIRE
SEASON IS ABOUT TO START AGAIN.
SO I WOULD LIKE TO INVITE ALL
OUR PANELISTS TODAY TO BE PART
OF THE LARGER CONVERSATION.
AS WE HAVE THIS IMPORTANT
DISCUSSION I WANT ENCOURAGE ALL
OF US. TO HAVE CREATIVE THINKING
ON WHAT ROLE THE INSURANCE
INDUSTRY COMPLY AS PARTNERS TO
THE STATE OF CALIFORNIA.
AND THANK YOU SO MUCH -- FOR ALL
OF US ONCE AGAIN FOR BEING HERE
I SEE MY VICE CHAIR IS NOT HERE
TODAY.
WOULD YOU LIKE TO SAY ANYTHING
[inaudible] TO MEMBERS.%
THANK YOU SO WITHOUT ONE SHERMAN.
IF WE LOOK AT THESE ISSUES --
PROPOSITION ONE OF THREE KEEPS
SURFACING ARE ARE WE GOING TO
SPEND TIME TODAY.
REVIEWING THAT PROPOSITION AND
HAS ANYONE DONE A WHITE PAPER
THAT WOULD SAY BOY FROM GETTING
CLAIMS HERE IN YOUR REPORT.
BUT ARE THOSE SUBSTANTIATED.
THIS IS WHAT WE'RE GONNA DO
WE'RE GONNA GIVE THE PANELISTS A
AN OPPORTUNITY TO DISCUSS AND
ASTOR GOING THROUGH THERE THE
PRESENTATION WILL HAVE THE
OPPORTUNITY TO ASK THEM
QUESTIONS.
SO I WOULD LIKE TO START WITH
OUR FIRST PANEL WHICH IS THE
INSURANCE REGULATION AND
AFFORDABILITY.
FOCUS WHICH WILL BE
APPROXIMATELY FORTY FIVE MINUTES
OR SO OUR FIRST PANEL TODAY'S
INSURANCE REGULATION AND
AFFORDABILITY WE HAVE JOLT
LOCKER FROM THE DEPARTMENT OF
INSURANCE.
WRECKS FRAZIERFROM THE PERSONAL
INSURANCE FEDERATION OF
CALIFORNIA.
AND MICHAEL MADDOCK OF CONSUMER
WATCHDOG THANK YOU GENTLEMEN FOR
BEING HERE.
AND JUST A COUPLE OF
HOUSEKEEPING RULES WE HAVE THIS
ROOM APPROXIMATELY TILL NOON SO
THE FIRST PANELIST WILL.
GO ON UNTIL AROUND ELEVEN AND
OUR SECOND PANEL -- WILL BE
GOING ABOUT ELEVEN THIRTY SO
THAT WE HAVE TIME TO TO ASK ANY
QUESTIONS.
THAT WE'D LIKE SO GENTLEMEN
PLEASE INTRODUCE YOURSELF AND
WE'RE GOING TO START WITH --
JEFF AND MR Là [inaudible]
WHAT DROUGHT?
THANK YOU SIR YOU MAY PROCEED.
LOOKS LIKE THIS IS ON I GUESS
THE MICROPHONE -- Q. CHAIR
SENATOR RUBIO I APPRECIATE YOU
INVITING US A I'M HERE
REPRESENTING COMMISSIONER LARA
AND THE CALIFORNIA DEPARTMENT OF
INSURANCE AND I APPRECIATE BEING
INVITED AND GETTING THIS
OPPORTUNITY.
TO PROVIDE SOME INFORMATION THAT
WE WE WOULD LIKE TO SHARE.
IN THE PACKET OF MATERIALS THERE
IS A POWER POINT -- THAT I WILL
SIMPLY WALK THROUGH TALKING
ABOUT SOME BACKGROUND OF THE
ISSUES THAT WE ARE DEALING WITH
THAT THE DEPARTMENT OF INSURANCE.
SO I'M GOING TO TURN RIGHT TO
THE SECOND PAGE OF THAT DOCUMENT.
THERE'S JUST SOME NUMBERS ABOUT
HOW MANY HOMES THAT ARE INSURED
IN CALIFORNIA.
JUST TO KIND OF GIVE A
PERSPECTIVE OF THE THE RANGE OF
THE MARKET IN CALIFORNIA
OVER SIX MILLION HOMES -- THAT
HAVE HOMEOWNERS POLICIES.
WE DON'T TRACK HOW MANY
UNANSWERED HOMES THERE ARE I
DON'T HAVE THAT NUMBER. TWO
MILLION DWELLING POLICIES.
THOSE ARE POLICIES NOT WRITTEN
ON A HOMEOWNER'S PACKAGE BUT
WRITTEN ON A KIND OF MODEL LINE
FIRE.
POLICY A MORE LIMITED POLICY
WITHOUT LIABILITY COVERAGE.
A MILLION CONDOMINIUM POLICIES.
FOR THE PEOPLE FOR THEIR OWN
UNIT. TWO HUNDRED AND SEVENTY
THOUSAND MANUFACTURED HOME
POLICIES AND OVER TWO MILLION
RENTERS POLICIES SO THAT'S
THAT'S GIVES A SCOPE OF OUR
INSURANCE MARKET PLACE THERE ARE
MORE HOMES THAN THAT OVERALL IN
CALIFORNIA.
AND THEN ON THE NEXT PAGE PAGE.
THREE YOU GET A VIEW OF WHAT
THEY TOTAL LOSSES INSURED LOSSES
HAVE BEEN.
FROM THE LAST TWO YEARS OF
WILDFIRES.
SO TWELVE POINT THREE BILLION IN.
TWO THOUSAND SEVENTEEN
UNFORTUNATELY FOLLOWED BY AN
EVEN LARGER THIRTEEN POINT EIGHT
BILLION.
LOSSES IN.
TWO THOUSAND EIGHTEEN THE NEXT
PAGE.
PAGE FOUR TURNS THOSE NUMBERS
INTO.
WHAT THAT MEANS TO INSURERS?
EXPERIENCE. FOR HOMEOWNERS
INSURANCE.
WAS TWO HUNDRED AND 1%.
A FOR TWO THOUSAND SEVENTEEN TO
MY KNOWLEDGE THAT IS.
LIKELY A RECORD LOSS RATIO FOR
INSURERS.
IN NINETEEN NINETY ONE THE YEAR
THE OAKLAND HILLS FIRE.
THE LOSS RATIO FOR HOMEOWNERS
WAS ABOUT A HUNDRED AND 18%.
THAT WAS THE PREVIOUS HIGH.
UNTIL THIS YEAR.
THE LAST FIFTEEN YEARS OR SO
HOMEOWNERS LOSS RATIOS HAVE
HOVERED IN THE THIRTIES FORTIES
FIFTY PERCENTILE MEANING. FOR
EVERY DOLLAR OF BUSINESS THEY
RIGHT.
THEY MIGHT HAVE A PAID OUT FORTY
SOMETHING PERCENT IN CLAIMS
DOLLARS.
SO IN.
TWO THOUSAND SEVENTEEN
UNFORTUNATELY FOR EVERY DOLLAR
THEY WROTE THEY PAID OUT TO
DOLLARS IN CLAIMS.
IN A GIVES YOU A SENSE HOW THAT.
PLAYED OUT FOR DIFFERENT
INSURERS THERE AT THE BOTTOM OF
THE PAGE.
THE TWO HUNDRED AND 1% IS THE
OVERALL NUMBER BUT FOR STATE
FARM IT WAS TWO HUNDRED AND 75% --
FOR FARMERS HUNDRED FORTY NINE
SO UNDER THE TWO HUNDRED FOR
NATIONWIDE FOUR HUNDRED AND 21%.
SO MASSIVE NUMBERS MORE THAN
FOUR DOLLARS PAID OUT FOR EVERY --
PREMIUM DOLLAR RECEIVED THAT
YEAR [inaudible]
SO.
OBVIOUSLY.
A A TERRIBLE YEAR WE FOLLOW UP
IF YOU FLIP THE PAGE.
FIVE AND THE NEXT YEAR -- MAJOR
LOSSES SLIGHTLY BETTER LOSS
RATIO FOR INSURERS BUT STILL.
WOULD HAVE BEEN THE RECORD.
HAD IT NOT BEEN FOR THE YEAR
BEFORE.
AND JUST TO GIVE YOU A SENSE OF
A A COUPLE ANSWERS AGAIN
TRAVELERS AT TWO HUNDRED AND
TWENTY TWO STATE FARM MUCH
BETTER YEAR FOR THEM.
ALBEIT AN AWFUL YEAR FOR THEM
LOS WISE AT 89%.
AND JUST TO MENTION AS I
MENTIONED THE POLICIES WRITTEN
INCLUDED DWELLING FIRE POLICIES.
I JUST GIVE AN EXAMPLE OF OUR
OWN FAIR PLAN THAT IN SURE -- OF
LAST RESORT.
WHICH RIGHTS A DWELLING FIRE
FORM OF COVERAGE. FOR THE LOSS
RATIO FOR DRAWING FIRE COVERAGE
REALLY HADN'T EXCEEDED.
HADN'T EXCEEDED A 100% IN THE
PREVIOUS YEARS.
IT WENT UP TO A HUNDRED AND 64%.
AND THE FAIR PLANS LOSS RATIO
WAS TWO HUNDRED AND 57%.
A LOT OF THAT BECAUSE OF THEIR
CONCENTRATION.
IN THE MALIBU AREA WHERE -- WE
HAD COURSE SOME OF OUR MAJOR
FIRES.
SO -- THE NEXT PICTURE JUST.
IN A TO GIVE SOME PERSPECTIVE OF
WHAT THE DEPARTMENT DOES IS A
SOME SCENE FROM THE CAMPFIRE --
IN THAT SCENE YOU SEE -- JUST
LAST WEEK COMMISSIONER.
LARA LED A ANY I SEE SPONSORED
WILD FAR CAN SYMPOSIUM.
AND LEAD -- FELLOW COMMISSIONERS
FROM UTAH AND WASHINGTON.
AND OREGON UP -- TO PARADISE. TO
KINDA TO MEET WITH THE TOWN
LEADERSHIP -- HERE FROM
CONSUMERS AND AND GET A SENSE OF
THE LEVEL OF DOES THE
DEVASTATION IN THAT AREA THAT
YOU REALLY.
HE HE DON'T APPRECIATE UNTIL YOU
ACTUALLY SEE IT -- LET ME FLIP
TO THE NEXT SLIDE.
THESE ARE THE CLAIMS ISSUES THAT
ARISE AFTER.
A WHILE FIRE.
UNDER INSURANCE IS THE THEME
THAT.
YOU CAN YOU HAS BEEN REPEATED
SENSE.
OF WILDFIRE LOSSES FOR SINCE TWO
THOUSAND THREE OR SEVEN DURING.
OR MY ENTIRE EXPERIENCE IN
NINETY ONE ACTUALLY.
ALL THE YEARS I'VE BEEN WITH THE
DEPARTMENT EVERY TIME THERE'S
BEEN A WILDFIRE THERE'S BEEN AN
UNDER INSURANCE ISSUE.
AND I I GUESS I JUST POSE TO
EVERYBODY HERE -- WHEN YOU THINK
ABOUT HOW THIS ARISES IS TO
THINK OF YOUR OWN HOME OWNER'S
POLICY?
AND HOW DID THE LIMIT THAT YOU
HAVE THERE TODAY.
EVOLVE TO BE THERE LIKE WHO
CHOSE THAT NUMBER.
HOW DID THAT NUMBER? TWO HOWEVER
MANY THOUSANDS OF DOLLARS THAT
IS.
IT HAVE YOU HAD A RECENT
INTERACTION WITH YOUR AGENT.
IS THAT THE NUMBER THAT SOMEBODY
SUGGESTED TEN YEARS AGO AND IT
JUST KEPT RENEWING WITH SMALL IN.
PLACE IN FACTORS.
SO FOR ME MOST INSURANCE THAT I
TALKED TO IT IS THE NUMBER THAT
CAME FROM THEIR INSURER.
AND THAT THEY ACCEPTED THAT
NUMBER AND THAT NUMBER HAS MOVED
FORWARD.
EITHER THROUGH INFLATION OR
HOWEVER IN SIR -- SUGGESTED OVER
MANY DECADES IN THE MEANTIME IF
THEY RENEWED WITH THE SAME
ANSWER.
SO THIS IS AN ISSUE THAT YOU CAN
HAVE ANYWHERE IN THE STATE.
OF COURSE AND FOR ANY ONE OF US
BECAUSE THE MOST PEOPLE AREN'T
TOO THRILLED TO TALK ABOUT
INSURANCE OR EVEN THINK ABOUT IT.
MOST FOLKS LIKE TO WRITE THAT
PREMIUM GRUDGINGLY THE CHECK
SEND IT OFF AND NOT HAVE TO
THINK ABOUT IT AGAIN.
WHICH IS AN ISSUE SINCE IT'S FOR
MOST PEOPLE THEIR PRIMARY --
INVESTMENT IN IN YOU KNOW THAT
THEY HAVE IN LIFE.
SO SO IT IS AN ISSUE THE
CONTINUES AND IT IS A IT IS A
MAJOR DIFFICULTY FOR PEOPLE WHO
OBVIOUSLY WANT TO REBUILD.
OR RESTART THEIR LIFE AFTER
THEY'VE HAD A TOTAL LOSS LIKE
THIS -- I'M HOPING IT'S
SOMETHING WE CAN ADDRESS -- WITH
SOME LEGISLATION.
DEMAND SURGED OCCURS OF COURSE
IN THESE -- WILD FOR VINCE THAT
IS -- OCCURS BEYOND INSURANCE TO
CONTROL BUT INSURANCE POLICIES
ACCOUNT FOR THAT WITH AN
EXTENDED REPLACEMENT COST.
COVERAGE THAT IS ON ALMOST EVERY
SINGLE HOMEOWNER'S POLICY.
SOME INSURERS MAKE THAT AN
OPTIONAL COVERAGE.
WE HOPE THAT EVERYONE WITH BY.
AT A MINIMUM TWENTY FIVE OR 50%
AND EXTENDED REPLACEMENT COST TO
ADDRESS DEMAND SURGE.
OR THE FACT THAT AN ESTIMATE CAN
BE AN ACCURATE ESTIMATE OF
REPLACEMENT COST.
THE OTHER MAJOR COMPLAINT WE GET.
IS ABOUT THE INVENTORY PROCESS
FOR GETTING YOUR PERSONAL
PROPERTY RECOVERY.
NONE OF WE WANT TO GO INTO
DETAIL ABOUT IT BUT ESSENTIALLY
TO RECOVER THE CONTENTS COVERAGE
UNDER YOUR POLICY.
YOU WOULD HAVE TO MAKE A LIST OF
EVERY ITEM YOU OWN.
AND THE AGE OF THAT ITEM HOW
MUCH YOU PAID IN THE CONDITION
OF THAT ITEM.
THE IN SIR -- WOULD EVALUATE
EACH AND EVERY ITEM SEPARATELY.
AND THEN DETERMINE AN ACTUAL
CASH VALUE A DEPRECIATED VALUE.
FOR MOST ITEMS PAY YOU THAT
MONEY AND THEN AS YOU REPLACE
THE ITEM YOU GET THE REPLACEMENT
COST FOR THE ITEM.
SO IT IS A PAINSTAKING PROCESS.
WHICH IS PARTICULARLY HEIGHTENED
WHEN YOU'RE IN THESE SCENARIOS
WHERE YOU ARE HAVING TO MOVE
MILES AWAY IT'S NOT LIKE A ONE
OFF FIRE WHERE YOU CAN FIND A
HOME.
SOMEWHERE NEARBY BUT YOU ARE
MOVING MILES AWAY FREQUENTLY
PUTTING YOUR KIDS I DIFFERENT
SCHOOLS.
ALL KINDS OF ISSUES AND HAVING
TO GO THROUGH THIS PROCESS.
IS EXCRUCIATING IS THE WORD THAT
A LOT OF PEOPLE WOULD USE TO
DESCRIBE IT.
I WOULD SAY A LOT OF THE
INSURERS HAVE BEEN GREAT IN.
IN ALLOWING INSERT INSERTS NOT
TO HAVE TO DO THE ENTIRE
INVENTORY TO GET MAJOR PORTIONS
OF THAT.
RECOVERY BACK SO INSURERS HAVE
WAIVED AS MUCH AS 75% OF THEIR
LIMITS AND IN A COUPLE CASES A
100% OF THEIR LIMITS. TO SAVE
PEOPLE FROM HAVING TO GO THROUGH
THAT PROCESS WHICH IS THAT YOU
WILL HEAR ABOUT THAT ANY CLAIM
HOLDER OF AND YOU GO.
TO THIRD TIME LIMITATIONS ON
COVERAGES SOME OF THOSE WERE
ADDRESSED IN LAST RECENT
LEGISLATION.
AND THERE ARE OBJECTIONS
CURRENTLY TO LAND VALUES BEING
DEDUCTED WHEN REPLACING THE HOME
AT ANOTHER LOCATION.
I WILL SAY IN CALIFORNIA WE ARE
FORTUNATE TO HAVE.
A LAW THAT ALLOWS A PERSON TO
TAKE THEIR INSURANCE RECOVERY
AND INSISTS THAT CHOOSE TO BUY
OR BUILD A HOME AT ANOTHER
LOCATION.
THAT'LL PROBABLY BE.
COME INTO PLAY IN A BIG WAY IN
THE PARADISE AREA.
BUT IF THE REPLACEMENT COST OF
THE HOME IN THE INSURANCE
PAYMENT IS.
FIVE HUNDRED THOUSAND AND THE
CONSUMER WANTS TO GO BUY A HOUSE.
AND PIECE A LAND ALL TOGETHER
THAT'S FIVE HUNDRED THOUSAND
SOME IN SERVICE THE DOC THAT
LAND VALUE AND SAY NO WE'RE ONLY
WE ONLY INSURE THE HOME.
A TO GET REPLACEMENT FULL
REPLACEMENT COST ON HOME YOU
HAVE TO SPEND THAT MUCH ON THE
HOME NOT THE LAND AND THE HOME
AND THE LA DOT THE LAND VALUE.
WHICH ENDS UP ARGUABLY IS A
WINDFALL TO THE INSERT -- IF
THAT HAPPENS THE PERSON NEVER
GETS THE REPLACEMENT COST.
SO THERE'S AN ARGUMENT.
BOTH WAYS ABOUT WHETHER THAT IS
APPROPRIATE BUT IT DOES MAKE
MOVING ON MORE DIFFICULT FOR THE
CONSUMER.
SENSUALLY THEY'D HAVE TO BUY A
SEVEN HUNDRED THOUSAND DOLLAR
PROPERTY IF THEY WANTED TO GET
THEIR WHOLE FIVE HUNDRED
THOUSAND BACK.
WHICH JUST KEEP CREATES KIND OF
A IN THE WHOLE PROCESS ITSELF.
MANY OF THESE ISSUES ARE WITH
THE INSURERS CONTROL OBVIOUSLY
THEY CAN THEY COULD ADDRESS THE
UNDER INSURANCE ISSUE BY MORE --
ACCURATE ESTIMATES OF
REPLACEMENT COST.
BY COMPLETE A BETTER EXTENDED
REPLACEMENT COST TAKEN LABOR
DEAL WITH PERSONAL PROPERTY AS
THE CHOOSE.
AND THEY CAN DEAL WITH THE LAND
ISSUE AS THEY CHOOSE SO THEY CAN
BE MORE LIBERAL.
THEN THERE ARE THE NO LAW MIGHT
REQUIRE OF THEM IF THEY CHOSE TO
DO SO.
THE BIG ISSUE THAT WE ARE SEEING
NOW AS WE DO THESE WILDFIRE
WORKSHOPS -- TO HELP CLAIMANTS.
IS THE EMOTIONAL IMPACT WE HEAR
MORE AND MORE -- IS PARTICULARLY
BOTH FROM SANTA ROSA WERE SO
MUCH OF THE TOWN WAS DEVASTATED
AND THEN.
EVEN GREATER DEVASTATION OF
COURSE IN PARADISE.
AND TO THE EMOTIONAL TRAUMA OF
THEIR WHOLE TOWN BEING
DEVASTATED.
REALLY HAS A HUGE IMPACT ON ON
HOW MUCH THEY EVEN WANT TO GO
BACK AND TRY TO REBUILD RIGHT SO
THEY'RE THEY'RE A LOT THAT'S
COMING INTO PLAY.
AND NOW THE MORE RECENT CONCERN
IS ON THE RENEWAL PROCESS SO
PEOPLE WONDERING.
AM I GONNA BE ABLE TO KEEP MY
COVERAGE OR WILL I BE ABLETO
AFFORD COVERAGE IF I REBUILD IN
PARADISE FOR EXAMPLE.
WILL I BE ABLE TO AFFORD THE
COVERAGE FOR THAT NEW A NEWLY
REBUILT HOME.
AND I WOULD SAY I'D WELCOME IF
YOU HAVE ANY QUESTIONS ALONG THE
WAY YOU'RE WELCOME TO INTERRUPT
AND I'LL.
DO MY BEST TO ANSWER SO -- FEEL
FREE TO DO SO.
THANK YOU ALL FOR BEING HERE.
IF YOU HAVE A QUESTION.
THIS.
ABSOLUTELY UNDER INSURANCE -- IS
THERE A WHAT.
MOTIVATES D. MOTIVATES INSURANCE
COMPANIES FROM KEEPING A CLOSER
EYEON THAT ANDNOT.
ENCOURAGING THEIR CUSTOMERS
[inaudible]
TO INCREASE THEIR INSURANCE.
YOU WOULD THINK THERE WOULD BE --
HEY THIS MEANS MORE PREMIUM TO
YOU AND CERTAIN COMPANY RIGHT IF
YOU INCREASE THE LIMITS.
I I I WOULD SAY YOU KNOW YOU
HAVE TWO PARTIES ONE WANTING TO
SELL ONE WANTING TO BUY A AS
CHEAPLY AS POSSIBLE -- AS I SAID
PEOPLE DON'T NECESSARILY LOVE
PAYING FOR INSURANCE.
AND A SO THEY'LL AND THE
LIKELIHOOD OF A TOTAL LOSS IS
VERY SMALL.
SO YOU KNOW PEOPLE TEND TO WANNA
KEEP MINIMIZE THEIR COVERAGE.
THE ANSWER -- REALLY IS THE ONE
WHO KINDA.
MAKES THE FINAL DECISIONS HERE
IN TERMS OF WHETHER THEY'RE
GOING TO INSURE YOU FOR THAT
AMOUNT.
AND THE SERVER IS TYPICALLY THE
ONE THAT SHARES AN ESTIMATE OF
REPLACEMENT COST.
GENERATED BY WHATEVER VENDOR
THAT THEY CHOOSE TO USE.
AND YOU KNOW THE MOST OF THIS
DATA I MEAN IT'S AN ERA OF BIG
DATA.
AND AND ACTUALLY YOU CAN FIND
OUT ABOUT MORE DETAILS AMOUNTS
ANY HOME ONLINE IF YOU LOOK AT
ZILLOW OR TRULIA OR REALTOR DOT
COM.
SO THERE'S A LOT OF INFORMATION
AVAILABLE -- I THINK THE INSERTS
WOULD SAY THE INSERT ISN'T
GIVING THEM ENOUGH DETAILED
INFORMATION TO GET IT RIGHT --
IN CERTAIN CONSUMERS WOULD SAY
WOLF YOU KNOW I JUST GETTING THE
FACTS AND THEN THEN THAT'S THE
NUMBER THEY GAVE ME.
BUT HOPEFULLY I THINK IT'S
REALLY HOLDING CONSUMERS. TO BUY
MORE REALISTIC VALUE IS.
A TO ME THE RESPONSIBILITY OF
THE ANSWER -- TODAY -- IT IT
CREATES A COMPETITION PROBLEM IF
ONE IN SIR -- DOES THAT AND THE
REST OF THE MARKET DOESN'T.
BECAUSE THE IN A LITTLE THEY
WILL BE OUT OF WHACK -- PREMIUM
WISE TOO EXPENSIVE SO IT REALLY
TAKES THE WHOLE MARKET TO KINDA.
MOVED FORWARD THE SAME TIME.
THE NEXT SLIDE IS -- ACTUALLY
ARE MAILED THE CLEANS WORKSHOP.
I'M GONNA MENTION SOME OF THE
MANY THINGS THE DEPARTMENT OF
INSURANCE DOES.
OF A TO HELP HOMEOWNERS ONE OF
THE THINGS WE DID HEAR IT SAYS
MALIBU -- COMMISSIONER LARA SET
UP A A WORKSHOP BOTH A WELL
WE'VE HAD ONE AND SHE CO.
WE'VE HAD IN.
SANTA ROSA WE HAVE IN A GORE
HILLS AND THEN MOST RECENTLY IN
MALIBU WHERE WE SET UP ONE ON
ONE APPOINTMENTS WITH CONSUMERS.
TO COME IN WITH THEIR CLAIMS
ISSUES AND TALK TO ONE OF OUR
CONSUMERS STAFF.
SO THAT'S WHAT THESE PICTURES
ARE OF MEETING DIRECTLY WITH
CONSUMERS.
I WOULD SAY FOR OUR STAFF IT'S
ONE OF THE MOST REWARDING --
OPPORTUNITIES THAT THEY HAVE IN
THEIR CAREER WE MOSTLY DEAL
THROUGH MAIL AND THE PHONE BUT
TO BE THERE IN PERSON AND HEAR
FROM THE PERSON DIRECTLY.
AND BE ABLE TO ASSIST THEM.
AND AND HEAR THEM OUT PERSONALLY.
I THINK MEANS A LOT TO THE
CONSUMER BESIDES THE TECHNICAL
ASPECTS.
IT'S JUST COMFORTING AND I WISH
WE COULD DO IT EVEN MORE -- SOME
OF THE OTHER ISSUES WE DEAL WITH.
PAGE.
TEN JUST SHOWS THE THE
COMPLAINTS WE RECEIVE.
SOME NUMBERS CLAIMS RATING AND
UNDERWRITING.
IN THE LAST COUPLE YEARS AND
THEN OUR MEDIATION PROGRAM THAT
WE HAVE FOR PEOPLE WHO COME TO A
WHAT THEY BELIEVE IS AN
UNRESOLVABLE DISPUTE OVER.
A SETTLEMENT -- YOU CAN SEE THAT
OUR RECOVERIES HAVE BEEN PRETTY
MASSIVE.
FOR TWO THOUSAND SEVENTEEN A
HUNDRED AND FIFTEEN POINT FIVE
MILLION DOLLARS -- THROUGH
COMPLAINTS HANDLED BY THE
DEPARTMENT.
SO WE HAVE A STAFF -- WE TAKE.
A COMPLAINTS OVER THE PHONE
MONDAY THROUGH FRIDAY BUT YOU
CAN GO ONLINE ANYTIME YOU CAN
SUBMIT YOUR MATERIALS THROUGH
OUR WEB.
PORTAL AND YOU KNOW WE ARE THERE
TO HELP AND OUR CLAIM SERVICES
BUREAU HAS BEEN GREAT IN THAT
REGARD.
SO ON ALL MOVE FROM THERE
[inaudible]
PAGE [inaudible]
ELEVEN THINGS RIGHT [inaudible]
THIS.
I THINK ACTUALLY MINE SKIPPED
THE PAGE.
I SKIPPED A PAGE LIKE THIS GIVE
A BATES I SKIP CD I RESPONSE.
THE ONE I WANTED TO SAY THE MOST
ABOUT THE OUR CHANCE -- TO TELL
OUR SERVICES.
PM SO -- OBVIOUSLY WHEN THERE'S
A FIRE LIKE THIS OF THINGS A LOT
OF THINGS HAPPENED STATEWIDE
OFFICE OF EMERGENCY SERVICES.
FOUR NIGHTS A RESPONSE FROM MANY
AGENCY.
AND THE FEMA CONSENT BUT ONE OF
THE THINGS THAT HAPPENS IS THE
DEPARTMENT OF INSURANCE AND
STAFF. TO LOCAL ASSISTANCE
CENTERS ARE DISASTER RECOVERY
CENTERS TO IMMEDIATELY BEGIN
RESPONDING TAKE A PEOPLE. TO
THEIR CONSUMER ISSUES SO WHERE
THEY'RE USUALLY WEEKS AT A TIME
AND ARE THERE ALL DAY THESE
RECOVERY CENTERS LAST INTO THE
EVENING.
AND WHAT WE ALWAYS STAFF THEM.
I MENTIONED WE HAVE THE ONE ON
ONE WORKSHOPS -- WILL PROBABLY
HAVE MORE THOSE COMING UP IN THE
FUTURE -- IT'S IN CHICO WAS A
TWO DAY EVENT AND I THINK WE MET
WITH OVER FIVE HUNDRED CONSUMERS
AT THAT EVENT.
OF THE OTHER ONES HAVE BEEN A
LITTLE SMALLER ACTUALLY SANTA
ROSA IS.
HUGE GORE HILLS IN MALIBU WERE A
LITTLE SMALLER BUT LOT OF A LOT
OF CLEAN IT'S COMING AND LOCAL
HOMEOWNERS.
AND I THINK.
THEY ALL GO AWAY FEELING LIKE
THEY GRATEFUL TO HAVE SOMEBODY
STEP IN AND HELP THEM.
IN SURE -- SEND PERSONNEL TO
THOSE ONE ON ONE WORKSHOPS AS
WELLTHEY'LL SEND CLAIMS
ADJUSTERS SO FREQUENTLY WERE
ABLE TO TAKE THE CONSUMER.
FROM OUR OFFICER IN TO DEAL WITH
AN ADJUSTER -- THE ANSWER
SOMETHING THEY MIGHT NOT HAVE
BEEN ABLE TO OUR KIND OF RESOLVE
WITH THEIR ADJUSTER OVER THE
PHONE OR THROUGH EMAIL.
MAYBE -- THIS IN THIS WAY THEY
GO SEE SOMEBODY MIGHT BE A
SUPERVISOR AND SPEAK TO THEM
DIRECTLY.
AND I SAY THAT'S BEEN SUPER
HELPFUL THAT ONE ON ONE
INTERACTION WITH AN INSURANCE
ADJUSTER AS WELL.
AND IT WOULD BE GREAT IF THERE
COULD BE MORE OF THAT.
WE ALSO SEND REPRESENTATIVES TO
DOZENS OF OF EVENTS FOR
COMMUNITY EVENTS FOR THESE FIRES --
OF ALL TYPES OF I THINK I WENT
TO SANTA ROSA. TEN TIMES FOR
VARIOUS COMMUNITY EVENTS FOR
EITHER CLAIMANTS OR PLANNING AND
TRYING TO HELP PEOPLE AT AND WE
ARE JOINED UNITED POLICY HOLDERS
THAT MANY EVENING EVENTS -- I
DID ONE MYSELF JUST ABOUT A WEEK
AGO -- UP AND SHE CO.
I'VE DONE THEM ALSO WITHIN -- IN
SANTA ROSA AND ARE WE HAVE --
OUR OTHER DEPUTY COMMISSIONER
HAS DONE THOSE AS WELL WE DO WE
TRY TO OUT REACH ABSOLUTELY AS
MUCH AS WE CAN AND INTERACT WITH
EVERY COMMUNITY THE BEST WE CAN.
I MENTIONED THE FOR YES MANAGER
JUST ON THAT TOPIC A AND I KNOW
YOU MENTIONED EMAIL PHONE IN A
LOCATION CAN JUST GIVE US A
LITTLE BIT OF SENSE OF THE
LANGUAGE.
SUPPORT THAT YOU HAVE THE
BARRIERS CAN YOU SPEAK TO TO THE
LANGUAGE SUPPORT SPANISH
CANTONESE WHATEVER.
ALSO THERE IS A NEED FOR I WOULD
SAY.
I DON'T KNOW THAT THAT HAS BEEN
TOO MUCH OF AN ISSUE WE DO HAVE
A SPANISH SPEAKING OFFICERS AND
THROUGH THE HOT LINE WE ARE ABLE --
TO ADDRESS AN ARRAY OF LANGUAGES
AS WE HAVE TRANSLATION SERVICES
SO WE DO REACH OUT -- THROUGH
OUR OUR IN HOUSE STAFF DIRECTLY
WITH ALL LANGUAGES.
I DON'T KNOW WE DID HAVE CHINESE
SPEAKING I BELIEVE -- AND I'M
NOT SURE WAT DIALECT BUT AT AT
LEAST ACOUPLE THESE LARGER
EVENTS WE DEFINITELY HAVE HAD
SPANISH SPEAKING.
STAFF AT EVERY EVENT THAT I KNOW
THAT WE'VE ATTENDED IF THAT'S
PART OF YOUR QUESTION THANK YOU
YES THANK [inaudible]
SOME SO I MENTION OUR HOTLINE
OUR WHITE WINE I DIDN'T MENTION
THE OTHER THING IS THAT WE SEND
OUT ENFORCEMENT STAFF ARE FRAUD
OFFICERS OR INVESTIGATORS GO OUT
MOSTLY FRAUD. TO MAKE SURE THAT
ON LICENSE -- CONTRACTORS AREN'T
SHOWING UP -- WE JOIN WITH THE
CONTRACTORS STATE LICENSE BOARD.
AND SO HAVE TO ADD TO A POLICE
PRESENCE -- IN IN THE AREA.
UNFORTUNATELY IN AREAS LIKE
PARADISE I UNDERSTAND THERE WAS
A LOT OF LOOTING -- THAT'S NOT
OUR MAIN ROLE TO PROTECT BUT WE
HOPE BY OUR PRESENCE WE HEALTH --
MINIMIZE THAT SOMEWHAT.
SO NOW KNOWING AND FLIPPED
FORWARD -- TO THE SLIDE THAT
SAYS WHAT YOU CONTROL.
SO THIS IS THE SLIDE THAT KIND
OF REFLECTS THE UNDERWRITING
PROCESS OF JUST A FEW YEARS AGO.
AND THIS IS PROBABLY YOU MIGHT
GET A POSTCARD LIKE THIS FROM
YOUR LOCAL FIRE DEPARTMENT.
OF WE WANT EVERY HOMEOWNER TO
TAKE ACTION. TO MITIGATE THE
RISK AT THEIR HOME SO IS USUALLY
A DEFENSIBLE SPACE.
APPROACH IS WHAT THIS TALKS
ABOUT THAT A CLEAR IT.
MAKE SURE THERE'S NOT A LADDER
OF FLAME THAT CAN MOVE FROM ONE
TREE TO THE NEXT.
THE NEXT PUSH TO YOUR HOME AND
CONTROL WHAT YOU HAVE.
THAT'S KIND OF THE OLD SCHOOL.
AND IF YOU FLIP TO THE NEXT
SLIDE.
WHAT THE IS -- FOR CONSIDERS YOU
SEE NEW SCHOOL UNDERWRITING.
AND THIS ONE DOESN'T HAVE -- THE
CIRCLE ON BUT YEARS DOES MINE
DOESN'T OKAY.
SO GENERALLY WHAT AN INSERT --
LOOKS AT TODAY.
IS WELL BEYOND JUST THE SINGLE
PROPERTY HAT THEY ARE UNDER
WRITING FOR COVERAGE.
THEY LOOK AT WHAT MIGHT BE A TWO
HUNDRED AND FIFTY YARDS OR
CONFERENCE AROUND THAT PROPERTY
IT MIGHT BE A MILE WIDE
CIRCUMFERENCE IF THEY'RE TAKING
INTO ACCOUNT.
WIND OR OTHER ISSUES AND THEY'RE
LOOKING AT THE SLOPE THE FUEL
LOAD IN TERMS OF BROCHURE TIMBER.
AND THEY'RE LOOKING AT THE
ACCESS TO THE PROPERTY AND THIS
IS ONE OF THE FIRST FILTERS THAT
YOUR PROPERTY GOES THROUGH.
SO THIS IS A LOOK UP PERIOD
GRANITE BAY.
THEY MIGHT TAKE AA CIRCLE
AROUND SOME PORTION OF THIS AREA.
TO DECIDE WHETHER THEY'RE GOING
TO ENSURE THAT HOME OR NOT.
USING A MODEL THAT MIKE SCORE
THAT INDIVIDUAL HOME TAKING INTO
ACCOUNT ALL THAT OTHER
INFORMATION.
ABOUT HOW EASY IT IS TO GET
THERE AND HOW MUCH RISK THERE IS
AROUND THE HOME GENERALLY.
IF YOUR HOME DOESN'T GET THROUGH
THAT UNDERWRITING FILTER.
IT WON'T MATTER IF YOU HAVE DONE
EVERYTHING YOU CAN AT YOUR OWN
PROPERTY. TO MEDIATE
[inaudible]
THE RISK.
THE NEXT PAGE THIRTEEN ARE THE
UNDERWRITING LOSS.
PEOPLE ASKED WHY DO YOU.
AT THE DEPARTMENT LET THE
INSURER NON RENEW ME I'VE BEEN
WITH THEM FOR TWENTY YEARS I'VE
NEVER HAD A LOSS.
NOTHING IS CHANGED HERE AND NOW
I'M BEING NON RENEW.
WELL THERE ARE VERY FEW LAWS
THAT REGULATE INSURANCE OR
UNDERWRITING.
THEY ARE BASICALLY THAT AN
ANSWER -- HAS TO USE.
RISK BASED -- DECISION MAKING
AND THEY HAVE TO APPLY IT
CONSISTENTLY.
SO WHEN THEY LOOK AT A RISK THEY
CAN'T USE THEIR BIASES THAT ARE
UNRELATED TO LOS.
I DON'T LIKE THAT GUY -- IS A
TROUBLE MAKER IT HAS TO BE ABOUT
RISK.
SO OF WITH THE INTRODUCTION OF
THE MODELS THAT I MENTIONED ON
THAT LAST PAGE.
IN SERVERS INCORPORATING THAT
HAS MADE THEM IT'S A NEW SCREEN
THEY DIDN'T PUT THEIR WHOLE BOOK
THROUGH TEN YEARS AGO WHEN YOU.
CAME ON BOARD AS AN INSURED WITH
THEM NOW THEY USE IT AND NOW YOU
MIGHT FIND THAT WHILE YOU WERE
PERFECTLY FINE RISK.
UNDER THEIR UNDERWRITING
GUIDELINES OF TEN YEARS AGO TO
DATE YOU DON'T MAKE THE CUT.
AND SO THEY SEND OUT A NON
RENEWAL.
TYPICALLY.
THEY GO WITH THE MANDATE OF THE
FORTY FIVE DAY NOTICE SOME DO A
LITTLE LONGER.
TELLING YOU.
YOU KNOW WHEN THIS POLICY WOULD
HAVE WHEN IT EXPIRES ON WHATEVER
JULY FIRST.
YOU WILL NOT RECEIVE RENEWAL
COVERAGE WITH OUR COMPANY YOU
NEED TO FIND COVERAGE ELSEWHERE
JUST A QUICK REMINDER YOU HAVE
THREE MINUTES SIR THANK YOU OKAY
WELL MOVE ON QUICKLY.
SO THEY HAVE TO GIVE THE
ANSWERED WITH A SPECIFIC REASON
INSERT CAN CONTESTED.
BUT BASICALLY THEY ARE THAT'S
THAT'S WHERE IT STANDS.
SO WHAT HAS HAPPENED WITH THE
INTRODUCTION OF THIS NEW TOOL
AND WITH THE FIRES WE'VE HAVE.
BEEN HAVING.
GOING TO FLIP -- TO LET'S SEE
HERE.
CONCERNED GETTING A THE REAL
TIME ISSUES WE'RE DEALING WITH.
THAT FORTY FIVE DAYS NOTICE I
MENTIONED SEEMS UNFAIR TO A LOT
OF PEOPLE.
THE IT IS VERY HARD TO
IMMEDIATELY FIND NEW COVERAGE
TODAY FORTY FIVE DAYS SUFFICE
YEARS AGO.
TODAY IF THE MARKET.
IS OF LESS AVAILABLE TO FOLKS IT
IS THEY REALLY HAVE TO SHOP
BEYOND THEIR TYPICAL
CIRCUMFERENCE OF AGENTS OR A AND
THEY NEED TO GO FURTHER AND THAT
TAKES LONGER.
THERE'S NO STANDARDS SECOND
BULLET FOR WHAT WOULD MAKE ME
MORE INSURABLE WHAT DO I AIM FOR
IF I'M GOING TO MITIGATE MY HOME.
BUT WHAT IS IT THAT I NEED TO DO
THE HOME HEARTENING BESIDES THE
DEFENSIBLE SPACE.
AND THEN AS WAS MENTIONED
EARLIER THE ISSUES WITH THE
COVERAGE LIMITS AVAILABLE IN
BOTH THE CARE.
GUARANTEE ASSOCIATION AND WITH
FAIR PLAN.
AN ISSUE IS THIS NEW PARADIGM
THIS NEW CHANGE OF HOW THINGS
ARE UNDERWRITING AND FIRES
PROGRESS.
THAT'S COUNTY THAT'S CATCHING A
LOT OF CITIZENS WHO MOVED TO AN
AREA BECAUSE IT WAS LESS
EXPENSIVE.
MEETS THE INCOME THEY HAD MAYBE
THAT'S THE REPORT THEY'VE MOVED
TO RETIRE.
AND NOW ALL OF A SUDDEN
INSURANCE HAS CHANGED THE WORLD
HAS CHANGED ON THEM THEY HAVE A
FIXED INCOME.
THEY MAY NOT BE ABLE TO AFFORD
THIS NEW PARADIGM OF HOW
INSURANCES UNDER RIGHT IS UNDER
WRITTEN AND READ IT.
SO ONE OF THE THINGS THAT'S
OCCURRING NEXT SLIDE IS FAIR
PLAN GROWTH.
I PUT GROWTH IN QUOTES BECAUSE
THE FAIR PLAN OVERALL HAS NOT
GROWN.
IT IS ACTUALLY GOING DOWN IN
NUMBERS BUT ITIS GROWING IN
THOSE WILDFIRE -- URBAN
INTERFACE AREAS.
SO WHILE IT'S GONE DOWN.
FIFTEEN FIFTEEN THOUSAND OVERALL
IN THE URBAN AREA IT HAS
INCREASED BY ELEVEN THOUSAND
FIVE HUNDRED HOMES AS OF THE END
OF LAST YEAR.
IN THE WE WE HAS -- IS
REFERENCED.
AND THAT'S FOR PEOPLE PRESUMABLY
THAT CAN'T FIND COVERAGE.
WESLEY LOOKED AT RENEW THEIR
POLICY.
ALSO AGO QUICKLY HERE THE
INSURANCE RATES.
NOTE US SENATOR MORE LIKE YOU
HAD A QUESTION HERE.
THE WAY RATES ARE SET IN
CALIFORNIA WE HAVE A PRIOR
APPROVAL PROCESS.
INSURERS THAT WANT TO CHANGE THE
RATES UP OR DOWN MUST APPLY TO
THE DEPARTMENT OF INSURANCE AND
STABILITY SUBMIT A RATE
APPLICATION THAT DETAILS.
WHY THEY BELIEVE THEY HAVE A
NEED FOR THAT ST STE?
SO THE BASIS FOR MAKING THAT
DECISION IS.
PRINCIPALLY THEIR LOSS
EXPERIENCE FROM THE RECENT PAST
SO FOR A LARGE COMPANY LIKE
STATE FARM THE PRINCIPLE OF
MOTIVATION FOR THE INCREASE.
IS GOING TO BE BASED ON THEIR
LOSS EXPERIENCE OVER THE LAST
YEAR.
STATE FARM IS SO LARGE AS TO
HAVE ONE YEAR OF EXPERIENCE
GIVES THEM ENOUGH CREDIBILITY
FOR RATE.
SO.
YOU TAKE THAT LAST YEAR'S
EXPERIENCE.
AND YOU YOU PROJECT WHETHER YOU
THINK NEXT YEAR IS GOING TO BE
LIKE LAST YEAR.
OR LESS LIKE IT MORE YOU KNOW
MORE LOS LESS LOSS IT'S A
PROJECTION THAT IS MADE BY THE
ACTUARY LOOKING AT THE TREND
[inaudible]
SO.
THE LOSS RESULTS SO WHEN WHEN
THE RATE IS APPROVED.
WHATEVER IS APPROVED IF IT'S AN
INCREASE.
IT IS DISTRIBUTED OVER A SET OF
FACTORS.
SO IT'S NOT DISTRIBUTED EVENLY
SO.
I'LL HAVE ANOTHER SLIDE THAT I
THINK SHOWS THIS.
IT'S NOT DISTRIBUTED EVENLY IT
GOES OUT TO THE HIGHER RISK
AREAS WILL ABSORB MORE OF THAT
RATE INCREASE.
THE OTHER PIECE THAT I MAY BE
THE INDUSTRY WILL TALK ABOUT THE
THE PAPER TALKS ABOUT.
BACKGROUND PAPER IS ABOUT HOW WE
DO CATASTROPHE LOSSES.
AND IN CALIFORNIA WE USE WE TAKE
CATASTROPHES SUCH AS THE
CAMPFIRE.
WE REMOVE THEM FROM THE
INSTRUCTORS LOS EXPERIENCE.
SO ALL OF THAT 2100% LOSS RATIO
OF TWO THOUSAND SEVENTEEN OR THE
AND 70% OF TWO THOUSAND EIGHTEEN
THAT DOESN'T GET LOADED DIRECTLY
INTO THE RACE.
THE CATASTROPHE LOSSES ARE TAKEN
OUT OF THEIR THEIR AVERAGED.
OVER A TWENTY PLUS YEAR.
TIME FRAME AND THEN AND THEN ADD
IT BACK IN AS A FACTOR.
SO YOU MULTIPLY THE NON
CATASTROPHIC RATES BY A
CATASTROPHE FACTOR IT'S
COMPLICATED.
BUT IT IS A WAY OF ACCOUNTING.
FOR CATASTROPHE EVERY YEAR IN
THE INSURERS RATES WHETHER THERE
IS A CATASTROPHE OR NOT THERE IS
A CATASTROPHE LOADING.
THAT REFLECTS THEIR AVERAGE
CATASTROPHE PAYMENTS CAN I ASK
YOU TO WRAP UP YOUR COMMENTS
PLEASE THANK AND WRAPPED THEM UP.
THIRDLY.
I THINK ALL JUST THE I'LL JUST
TURN TO SLIDE NINETEEN WHICH IS
A FIRE LINE WHILE FIERY FACTORS.
IN THAT THIS IS FROM A RATE
FILING FROM A GIVEN AND SIR --
AND IT IS AN INTERESTING IT
TELLS A BIG STORY JUST IN THAT
IT SHOWS ITS CURRENT.
FIRE LINE RATE FACTORS SO HOW
MUCH DID CHARGES AN INSURED
BASED ON THE SCORE FROM THEIR
WILDFIRE RISK MODEL.
NOW THE SCORE OF WHICH THIS
PARTICULAR MODEL USES A SCORE OF
ZERO TO THIRTY ZERO BEING NO
WILD FIRE RISK. THIRTY EXTREME
WILD FIRE RISK AND YOU CAN SEE
THE SURCHARGE AND THAT CURRENT
FILE FIRE LINE SCORE HOW IT
INCREASES BASED ON THE SCORE.
AND WHAT THEY'RE PROPOSING. TO
INCREASE THAT.
PRETTY DRAMATICALLY IN THE FINAL
PROPOSED FACTOR.
SO IF YOU LOOK DOWN AT A SCORE.
THIRTY THEY CURRENTLY CHARGE
THAT PERSON DOUBLE THE PREMIUM
THAT THEY WOULD CHARGE FOR A
PERSON IN AN URBAN AREA.
WHAT THEY'RE PROPOSING TO CHARGE
THAT PERSON IS THREE TIMES THE
AMOUNT THEY WOULD CHARGE IN AN
URBAN AREA?
IF YOU LOOK OVER TO THE LEFT
EARNED EXPOSURES.
YOU SEE THAT THE ONLY RIGHT ONE
RISK IN THAT A SCORE OF THIRTY
AND IN FACT AS YOU LOOK UP THAT
TABLE FROM THAT.
ONE THEY WRITE VERY FEW RISKS.
ANY ANYWHERE ABOVE.
A NINE REALLY SO IT'S A VERY
SMALL NUMBER.
SO YOU CAN SEE WHEN AN INSURER
TAKES A RATE INCREASE AND I
THINK THERE'S A MENTION OF
COMMONLY A SIX POINT 9%.
INCREASE.
THAT INCREASE IS DISTRIBUTED --
SO THAT THE GREATEST AMOUNT OF
THAT RATE INCREASE HAPPENS TO
THE PEOPLE AT THESE THIS LEVEL
OF SCORE.
AND IF IT AT AND THE END STAYS
NEUTRAL FOR THE PERSON DOWN AT
THAT LOW RISK AREA.
AND SO.
BETWEEN NON RENEWALS AND RATE
INCREASES THIS IS THE REALITY
FOR CONSUMERS THROUGHOUT THE
STATE.
WHICH IN THEIR AREAS AT A THIRTY
IN ALMOST EVERY COUNTY IN TE
STATE -- THAT THAT THEY'RE
FACING FOR THEIR INSURANCE.
THANK YOU FOR THAT WE'RE GONNA
HAVE TO A MOVE ON TO OUR NEXT
PANELIST BUT THANK YOU SO MUCH
AND I WILL GIVE ARE A MEMBERS AN
OPPORTUNITY TO ASK QUESTIONS AT
THE END JUST SO WE MAKE SURE
THAT WE'RE RESPECTFUL OF ALL THE
VISITORS HERE AND THE PANELISTS.
SO IF YOU DON'T MIND THAT WE'RE
GONNA MOVE ON TO MISS RACKS
THANK YOU.
THANK YOU VERY MUCH AND THANK
YOU FOR THE OPPORTUNITY TO
TESTIFY TODAY.
ABOUT HOMEOWNERS INSURANCE
REGULATION AND AFFORDABILITY
ISSUES.
BUT ISSUES WITH HOMEOWNERS
INSURANCE AVAILABILITY WHICH THE
NEXT PANEL WILL DISCUSS IN
GREATER DEPTH.
HAVE THEIR ROOTS IN SEVERAL PAST
REGULATORY DECISIONS AND IT'S
IMPORTANT TO IDENTIFY THESE
POLICY CHOICES THAT HAVE BEEN
MADE.
AN ACKNOWLEDGED THEIR DIRECT
CONSEQUENCES.
AND INSURERS ABILITY TO SERVE
COMMUNITIES THREATENED BY WILD
FIRE.
IS DIRECTLY RELATED TO ITS
RELATIONSHIP WITH THE DEPARTMENT
OF INSURANCE.
WHICH HAS A DUAL ROLE.
ON THE ONE HAND THE DEPARTMENT
IS EMPOWERED TO PREVENT
EXCESSIVE RATES.
AND CAN EVEN ORDER INSURERS TO
REDUCE PREVIOUSLY APPROVED RATES
THAT IT BELIEVES HAVE BECOME
EXCESSIVE OVERTIME.
ON THE OTHER HAND.
THE DEPARTMENT.
MUST MONITOR SOLVENCY TO ENSURE
THAT INSURERS CAN PAY CLAIMS.
IN THIS BALANCING ACT IF THE
DEPARTMENT RESTRAINTS AND
INSURERS RATES TO AGGRESSIVELY.
THE PLACES FINANCIAL PRESSURE ON
THAT INSURER.
WHICH WILL THEN REDUCE EXPOSURE
TO HIGHER RISK AREAS.
WHERE THEY CANNOT GET ADEQUATE
RATE?
OVER THE PAST TEN YEARS.
THE DEPARTMENT IN CALIFORNIA HAS
APPROACHED RATE REGULATION IN A
MANNER THAT'S VERY DIFFERENT
THAN THE REST OF THE COUNTRY.
ACCORDING TO THE NATIONAL
ASSOCIATION OF INSURANCE
COMMISSIONERS AS OF TWENTY
SIXTEEN CALIFORNIA HAD THE
THIRTY SECOND HIGHEST AVERAGE
HOMEOWNER'S INSURANCE PREMIUM IN
THE COUNTRY.
AND WHEN THAT IS ADJUSTED FOR
AVERAGE HOUSEHOLD INCOME IT
DROPPED TO FORTY THIRD IN THE
COUNTRY.
THIS LOWER PREMIUM LEVEL WAS A
STARK CHANGE FROM SEVERAL YEARS
EARLIER WHEN IN TWO THOUSAND
NINE CALIFORNIA HAD THE
FOURTEENTH HIGHEST AVERAGE
PREMIUM.
SO DURING THAT PERIOD.
THE AVERAGE HOMEOWNERS PREMIUM
IN THE NATION INCREASED BY 45%.
WHILE IN CALIFORNIA THE AVERAGE
INCREASED BY ONLY EIGHT POINT 1%.
SO HURRICANE STATES HURRICANE
EXPOS STATES SUCH AS LOUISIANA
AND FLORIDA NOW HAVE AVERAGE
PREMIUMS ALMOST DOUBLE THAT OF
CALIFORNIA.
SO WITH RESTRAINED RATES
THERE'S GENERALLY A MARKET
RESPONSE RELATED TO AVAILABILITY.
EVEN BEFORE THE TWENTY SEVENTEEN
FIRE SEASON.
THE HOMEOWNERS INSURANCE MARKET
WAS ALREADY REACTING.
ACCORDING TO THE STATE'S FOURTH
CLIMATE CHANGE ASSESSMENT.
THE STATE WIDE NUMBER OF SURPLUS
LINE AND FAIR PLAN POLICIES IN
HIGH RISK AREAS HAD ALREADY
STARTED TO INCREASE BY.
TWENTY FOURTEEN WELL BEFORE THE
FIRES.
AND WHILE THE ABSOLUTE NUMBERS
WERE SMALL.
THE TREND WAS REAL.
AND IT WAS FORESEEABLE.
AND COULD ACCELERATE FOLLOWING
THE MASSIVE TWENTY SEVENTEEN AND
TWENTY EIGHTEEN FIRES.
WHILE THE ADMITTED MARKET
CARRIERS HAVE BEEN CONCERNED
ABOUT RATE INADEQUACY ON A
STATEWIDE LEVEL.
LOCAL GOVERNMENT OFFICIALS AND
RESIDENTS.
IN HIGH FIRE RISK AREAS HAVE
VOICE THE OPPOSITE WITH
COMPLAINTS ABOUT HIGH PRICES.
AND THIS IS A DISCONNECT WORTH
CONSIDERABLE PUBLIC DISCUSSION.
WHILE THE GULF STATES HAVE
ALREADY HAD A CLIMATE DRIVEN
INCREASE IN INSURANCE RATES
CALIFORNIA HAS NOT.
CALIFORNIA REGULATIONS BUT NOT
STATUTES.
THIS IS NOT A BROADSIDE AGAINST
PROP ONE OF THREE WHICH PERMITS
WHAT I'M ABOUT TO TALK ABOUT --
BUT IT'S A REGULATORY SESSION BY
THE DEPARTMENT OF INSURANCE SO
CALIFORNIA REGULATIONS.
CONTINUE TO PROHIBIT INSURERS
FROM USING CLIMATE CHANGE
MODELING AND PRICING.
INSTEAD REQUIRE INSURERS TO
PREDICT FUTURE LOSSES BASED UPON
THE AVERAGE OF THE LAST TWENTY
YEARS OF LOSSES AS JOE MENTIONED.
CALIFORNIA'S RECOGNITION OF A
NEW NORMAL DOES NOT YET EXTEND
TO INSURANCE RATES.
THIS CLIMATE CHANGE RESTRICTION
IS ON TOP OF CALIFORNIA'S
CONTINUED REGULATORY PRINT
PROHIBITION AGAIN THIS IS NOT
REQUIRED BY PROP ONE OF THREE ON
ALLOWING INSURERS TO INCLUDE
THEIR ACTUAL COSTS OF
REINSURANCE.
IN INSURANCE RATES.
AS THE WORLD REINSURANCE MARKET
RECOGNIZES CALIFORNIA'S CLIMATE
RISK AND SEEKS HIGHER PRICES
FROM CALIFORNIA INSURERS.
CALIFORNIA RATING RULES CONTINUE
THE LEGAL FICTION THAT INSURERS
TO NOT BUY REINSURANCE.
IF INSURANCE CANNOT ACHIEVE RATE
ADEQUACY IN HIGH RISK AREAS
AVAILABILITY ISSUES COULD WORSEN.
AND MEASURES TO FORCE INSURANCE
RENEWALS.
IN AREAS WITH ANADEQUATE RATES.
OBVIOUSLY RISK SHUTTING DOWN THE
NEW BUSINESS MARKET ENTIRELY
BECAUSE FEW INSURERS WOULD
LIKELY RISK ENTERING INTO NEW
CONTRACTS WITH INDEFINITE
DURATIONS.
WHEN THEY'RE GONNA BE SUSTAINING
A LOS?
DURING LAST YEAR'S HECTIC DEBATE
ABOUT UTILITY COSTS WILD FIRES
FEW HAD TIME TO UNDERSTAND THE
DIFFICULTIES ALREADY PRESENT IN
THE INSURANCE INDUSTRY.
AND WE'RE GRATEFUL FOR THIS
COMMITTEE'S WILLINGNESS TO
EXPLORE THE COMPLICATED AND
COMPETING INTERESTS.
AND THE RESIDENTIAL PROPERTY
INSURANCE MARKET IN CALIFORNIA
THANK YOU [inaudible]
IS. TO MICHAEL MADIGAN.
THANK YOU MAY PROCEED THANK YOU
IT'S MY PLEASURE -- MADAM
MEMBERS MIGHT MATTER COUNSEL FOR
CONSUMER WATCHDOG.
THANK YOU FOR YOUR INVITATION TO
BE HERE TODAY MY MY REASONABLY
BRIEF PRESENTATION IS IN THREE
PARTS USUALLY WILL I'M SMILING
ABOUT BEING HERE WE USUALLY
DON'T GET INVITED TO AFTER THE
PARTY'S OVER SO WE APPRECIATE
COMING.
IF THE THREE PARTS ARE OF BONE.
WHAT IS CONSUMER WATCHDOG HOW
PROP ONE OF THREE IMPACTS THE
ISSUES BEFORE US AND THE
WATCHDOG SUGGESTIONS?
CONSUMER WATCHDOG THE NONPROFIT
ORGANIZATION DEDICATED TO
PROVIDING EFFECTIVE VOICE FOR
TAXPAYERS AND CONSUMERS.
IN AN ERA WHEN SPECIAL INTERESTS
DOMINATE PUBLIC DISCOURSE.
GOVERNMENT AND POLITICS.
IN NINETEEN EIGHTY EIGHT
CALIFORNIA'S REVOLTED AGAINST
EXCESSIVE AUTO HOMEOWNERS AND
BUSINESS INSURANCE PREMIUMS AND
PASS PROP ONE OF THREE IT WAS A
BALLOT MEASURE WRITTEN BY -- THE
FOUNDER OF CONSUMER WATCHDOG
HARVEY ROSENFELD A TO REIN IN
THE INSURANCE COMPANIES USING
THE PROVISIONS OF PROP ONE OF
THREE CONSUMER WATCHING AS LOWER
RATES AND SAVE CALIFORNIANS
BILLIONS OF DOLLARS OVER THE
LAST THIRTY YEARS.
CALIFORNIA USED TO BE THE WILD
WEST WHEN IT CAME TO INSURANCE
SAYS CALIFORNIANS HAD TO BUY
INSURANCE INSURANCE COMPANIES
WERE ABLE TO CHARGE WHATEVER
THEY CAN GET AWAY WITH.
IN ESSENCE THERE WAS AN OF
INEFFECTIVE SHARE OF UNTIL PROP
ONE OF THREE CAME TO TOWN.
PROBABLY NOT THREE LOWERED RATES
IT SAID INSURANCE COMPANIES HAD
OPEN THEIR BOOKS.
FULLY DISCLOSING JUSTIFY WHAT
THEY CHARGE CONSUMERS AND THEY
CAN'T USE MONEY FOR EXTRA ON
REASONABLE EXPENSES THE
INSURANCE COMPANIES WOULD LIKE
TO PASS THROUGH THE CONSUMERS.
ANOTHER PROP ONE OF THREE
CONSUMERS HAVE RIGHTS AND POWERS
LIKE THE RIGHT TO A PUBLIC
HEARING CHALLENGE INSURANCE
COMPANIES RATES.
AND EVEN TAKING THEM TO COURT
FOR VIOLATING THOSE RIGHTS.
PROBLEM THREE MADE THE INSURANCE
COMMISSIONER IN ELECTED OFFICE
THAT HAS THE ANSWER TO THE
PUBLIC.
AS DO YOU GUYS.
THERE ARE TYPES OF INSURANCE A
REGULAR PROBLEM OR TWO BUT
PERSONALAUTOMOBILE TO ONLY FIRE
EARTHQUAKE HOMEOWNERS AND A
WHOLE BOATLOAD OF STUFF I DON'T
UNDERSTAND LIKE.
IN THE MARINES AND GO ASK AND
FIDELITY ALL THAT STUFF.
BUT ALSO HAVE THEM MELHAM
MEDICAL MALPRACTICE MULTI PERIL
AND UNITED STATES LONGSHOREMEN
AND HARBOR WORKERS COMPENSATION
ACT.
THE ELEMENTS OF PROP ONE OF
THREE OUR PRIOR APPROVAL.
REASONABLE NOT EXCESSIVE LOWER
RATES TRANSPARENCY AND AN
INTERVIEW TO PROCESS.
PROP ONE OR THREE REQUIRES AS
WAS MAGICALLY PRIOR APPROVAL
CALIFORNIA'S DEPARTMENT OF
INSURANCE BEFORE INSURANCE
COMPANIES CAN RAISE OUR
AUTOMOBILE AND HOMEOWNER'S
COUNTY INSURANCE RATES.
UNLIKE OUR HEALTH PREMIUMS LIKE
MINE WENT UP 30% THIS YEAR FOR
MY FAMILY AND WHY THEY DO IT
BECAUSE THEY CAN.
THEY CAN'T BECAUSE HEALTH
INSURANCE IS NOT COVERED BY
PROPERTY PRIOR APPROVAL.
TRANSPARENCY AND WIENER
INTERVENOR PROVISIONS.
AUTO HOME AND BUSINESS YOURS
CANNOT BE EXCESSIVE.
RATES DETERMINE THE TOTAL AMOUNT
OF MONEY AND INSURANCE COMPANY
COLLECT FOR EACH KIND OF
COVERAGE THEY SELL.
INSURANCE COMPANIES ARE REQUIRED
TO CHARGE RATES THAT ARE NOT
EXCESSIVE IN LIHT OF THE
PROFITS INVESTMENT INCOME.
THE EXPENSES THEY PASSED THROUGH
IN THE RATES THEY CHARGE MUST BE
REASONABLE.
AND IMPROPER THREE HAS AN
INTERVENING PROCESS.
PROBLEM THREE AUTHORIZED
CONSUMER PARTICIPATION IN THE
ADMINISTRATION.
OF INSURANCE RATES.
THE PERMANENT CONSUMER
INTERVENOR TO RECOVER ADVOCACY
EXPERT FEES AND EXPENSES UNDER
CERTAIN CIRCUMSTANCES.
PROP ONE OF THREE HAS SAVE
CONSUMERS BILLIONS OF DOLLARS IN
IN YOUR PACKET THERE'S A THERE'S
A NICE GRAPHICS GOT THINGS
COLORS IT SHOWS THAT -- WE HAVE
SAVED OVER THE LAST THIRTY YEARS
A HUNDRED FIFTY FOUR BILLION
DOLLARS TO CONSUMERS.
AND DURING THE 200-022-0062
THOUSAND SIXTEEN CONSUMER
WATCHED A GREAT CHALLENGE
SAVINGS.
OR NINETY SIX PLUS MILLION FOR
MED MALLON BUSINESS. ONE POINT
FIVE BILLION FOR TOTAL HOMEOWNER
SAVINGS. ONE POINT SEVEN BILLION
FOR TO A LOT OF SAVINGS FOR
COMBINED SAVINGS OF THREE POINT
TWO EIGHT ONE BILLION DOLLARS.
IN ADDITION TO THE SAVINGS
ACHIEVED IN A CALIFORNIA'S
CONSUMER PROTECTION SYSTEM.
IT'S IMPORTANT TO NOTE THAT THE
SYSTEM OF STRONG REGULATION.
OF THE INSURANCE COMPANIES AS
FOSTERED A ROBUST AND CAN
EXTREMELY COMPETITIVE MARKET.
HELPING CALIFORNIA TO BECOME THE
SECOND LEAST CONCENTRATED AUTO
INSURANCE MARKETS IN THE NATION.
WELL EFFECTIVE REGULATION WILL
ALLOW FOR REASONABLE PROFITS
HOMEOWNERS INSURANCE IN
CALIFORNIA HAVE ENJOYED AN
AVERAGE ANNUAL RETURN ON THAT
WORTH OF FOURTEEN POINT 1%.
COMPARED WITH THE NAY POINT 5%
ANNUAL AVERAGE NATIONALLY.
EVEN INCLUDING THE MASSIVE
LOSSES INCURRED BY THE ANOMALOUS
PGA ANY NEGLIGENCE ASSISTED YEAR
OF TWENTY SEVENTEEN INSURERS IN
CALIFORNIA RETURN ON NET WORTH
DROPPED TO RESPECTABLE SEVEN
POINT 1% [inaudible]
PART.
TWO THE ACCESS AND AFFORDABILITY
OF HOMEOWNERS INSURANCE.
IT SURE IS COME TO CALIFORNIA
ARE ACTUALLY FACING AN
UNPRECEDENTED PRESSURES ON THEIR
ABILITY TO WRITE INSURANCE
POLICIES THROUGHOUT CALIFORNIA.
DUE TO THE INCREASE IN FREQUENCY
AND SEVERITY WILDFIRES.
THAT IS EXACERBATED BY CLIMATE
CHANGE.
THE POTENTIAL IMPACTS ON THE
INSURANCE INDUSTRY MAY BE
GROUPED INTO UNDERWRITING RISKS.
AND REST TO THE ASSETSTHAT THE
TEACHERS DEVELOP TO FUND LOSSES
AND TO PROVIDE RETURN ON
INVESTORS.
ON THE INVESTMENT SIDE OF THE
BUSINESS NSURANCE ARREST TO THE
VALUE OF FOSSIL FUEL RELATED
ASSETS CONSTITUTES TRANSNATIONAL
RISKS.
TRANSITION RISKS OF INSURERS
INVESTMENTS IN FOSSIL FOR
RELATED ENTITIES.
ARE THE FINANCIAL RISKS
INCLUDING INVESTMENT LOSSES. TO
INSURERS AS THE WORLD
DRASTICALLY REDUCES THE USE OF
FOSSIL FUELS.
THE INVESTMENT IN UNDERWRITING
FOSSIL FUEL RELATED ENTITIES ARE
PROJECTS BY THE INSURANCES STIRS
INDUSTRY.
ARE CAUSALLY RELATED TO THE
EXACERBATIONS CLIMATE CHANGE.
THAT IS WHY WE RECENTLY
SUBMITTED A PETITION THE
COMMISSION A LARA TO ISSUES
SOLVENCY. TO ENSURE THE SOLVENCY
OF THE INSURANCE INDUSTRY AND
PROTECT CONSUMERS IN CALIFORNIA.
WE WANTED THE INSURANCE INDUSTRY
TO DISCLOSE ALL THEIR
INVESTMENTS IN FOSSIL FUEL
RELATED ENTITIES.
AND THE FOSSA FOR RELATED
COMPANIES AND PROJECTS THAT THE
UNDER RIGHT OR OTHERWISE INJURE.
THE IMPACT ON CLIMATE CHANGE A
WEATHER RELATED EVENTS WEATHER
RELATED EVENTS BECAUSE
APPROXIMATELY 90% OF THE NATURAL
DISASTERS.
AND THEIR COSTS IN ANAVERAGE
YEAR.
IN TWENTY SEVENTY RECORD
BREAKING GLOBAL COSTS. FOR SUCH
EVENTS WERE THREE HUNDRED TWENTY
BILLION.
THE VAST MAJORITY IS THE IMPACTS
93% THOSE TODD TOTAL LOSSES WERE
NORTHERN CALIFORNIA.
THE TUBS FIRE IN NAPA VALLEY WAS
A COST AS WELL FARM THE GLOBAL
INSURANCE INDUSTRY'S HISTORY.
AND THE LARGEST IRVINE
CONFLAGRATION.
THESE TRENDS ALSO ESTABLISH A
NEXUS BETWEEN INTENSIFYING
HAZARDS AND CONSUMERS WHO
CONTINUE TO MOVE INTO THE
WILDLAND URBAN INTERFACE AREAS
OR THAT WE AREAS.
THE RESULTS ARE MATERIAL FOR
PROPERTY INSURERS GLOBAL LOSSES
IN.
TWENTY SEVENTEEN REDUCE THAN
THAT RETURN ON NET WORTH FROM
40% TO THE 7% THAT I MENTIONED.
LET'S GET PRIDE THROUGH ALL THE
OTHER THINGS THAT I WAS GOING TO
SAY SINCE TROLL TOOK UP ALL OF
OUR TIME.
YOU'RE WELCOME AND YOU HAVE
THANK YOU VERY MUCH.
AND HAVE TO SAY THAT WE NEED TO
REMAIN VIGILANT TO INSURANCE
COME WITH INSURANCE COMPANIES WE
MUST REGULATE UP FRONT.
WE MUST MAKE SURE THAT.
EVEN THE FACT THAT THE V..
PERSIST ON NOT WISHING TO HAVE
LIMITS ON THEIR CONTACT AND
LOBBY AGAINST TRANSPARENCY.
RATHER THAN EXPAND TRANSPARENCY
IN THE REDDIT CONSUMERS.
SO WHAT'S THE SOLUTION LET'S
JUST GET TO THE SOLUTION AND
AFFORDABILITY OF HOMEOWNERS
INSURANCE.
THE CALIFORNIA DEPARTMENT OF
INSURANCE WHICH RECEIVE INCREASE
COMPLAINTS FROM CONSUMERS OF
HOMEOWNERS INSURANCE COVERAGE IN
THE WILL WE IS INCREASINGLY
DIFFICULT TO OBTAIN.
AND IF AVAILABLE IS ON
AFFORDABLE TO MANY THAT NEED.
WE DO NOT BELIEVE THAT THE
INSURANCE INDUSTRY WILL
VOLUNTARY AGREE VOLUNTARILY
AGREED TO CHANGE ITS CURRENT
BUSINESS PRACTICE.
OR HOW IT USES CERTAIN DECISION
MAKING TOOLS.
RELYING ON VOLUNTARY INDUSTRY
CHANGES IS HIGHLY UNLIKELY TO
RESULT IN ANY SOLUTION THAT
BENEFITS CONSUMERS.
HOMEOWNERS ARE ALSO COMPLAINING
THAT THEIR INSURERS HAS
INCREASED THEIR PREMIUMS DUE TO
THE REAL OR PERCEIVED WILDFIRE
RISK.
CDI HAS REVIEWED CASES WERE
HOMEOWNERS ARE PAYING AN ANNUAL
PREMIUMS OF EIGHT HUNDRED TO A
THOUSAND DOLLARS BUT UPON
RENEWAL SAW INCREASES TO AS HIGH
AS TWENTY FIVE HUNDRED TO FIVE
THOUSAND SOME OF THESE
HOMEOWNERS HAVE.
CONDUCTED EXTENSIVE AND COSTLY
DEFENSIBLE SPACE ANOTHER
MEDICATION LIKE THE ONE BEFORE
YOU RIGHT NOW.
BUT THESE ACTIONS DID NOT LOWER
PREMIUMS WHILE AN INHERENT RISK
OF WILDFIRES IN CERTAIN AREAS
INCREASES THE COST OF A
HOMEOWNER'S INSURANCE POLICY.
THERE ARE CHANGES THAT CAN BE
ENACTED TO LESSEN THE SEVERITY
OF THESE HIGH PREMIUM INCREASES.
I PROPERTY INSURED UNDER A
POLICY OF RESIDENTIAL.
PROPERTY INJURES IS ELIGIBLE FOR
A PREMIUM CREDIT AS COMPARED TO
OTHER SIMILARLY GEN AND
DEFENSIBLE SPACE CRITERIA FOR
OFFERING ISSUING AND RENEWING
HOMEOWNERS INSURANCE POLICY.
OWNER SHOULD ALSO HAVE ACCESS TO
FRAUD TO A FUND OR GRANT
PROGRAMS THAT WOULD PROVIDE TEN
THOUSAND DOLLARS TOWARD THE
MITIGATION.
SIMILAR TO WHAT ALABAMA OFFERS
ITS CITIZENS.
SO HERE THE MAIN IDEAS TO
CONSIDER.
INSURANCE COMPANIES SHOULD NOT
CANCEL OR NOT RENEW A POLICY
BASED ON WEATHER RELATED CLAIMS
OR CERTAIN NUMBER OF CLAIMS IN
THE SPECIFIC SPECIFIED TIME
PERIOD OR FOLLOWING A DECLARED
DISASTER.
INSURANCE COMPANY SHOULD NOT
CANCEL OR RENEW A POLICY THAT
HAS BEEN IN EFFECT FOR A CERTAIN
TIME PERIOD UNLESS A STRICT
RECISION STANDARD IS MATT.
INSURANCE COMPANIES MUST OBTAIN
APPROVAL FROM THE INSURANCE
COMMISSIONER BEFORE THEY CAN
REDUCE THE VOLUME OF POLICIES IN
A GIVEN AREA.
AND INSURANCE COMPANIES MUST
PROVIDE MITIGATION DISCOUNTS AND
CONTINUE COVERAGE TO INSURERS TO
MAKE INVESTMENTS IN HARDENING
THEIR HOMES I KNOW ONE INSURANCE
COMPANY THAT DOES THAT WORK FOR
IT FOR THIRTEEN YEARS AND WHEN
YOU DO THE DEFENSIBLE SPACE.
AND YOU LIVE IN A FAR WISE
COMMUNITY THEY WILL GIVE YOU
THAT DISCOUNT THEY WILL CONTINUE
TO WRITE YOU.
INSURANCE COMPANIES SHOULD BE
REQUIRED TO OFFER HOMEOWNER'S
INSURANCE IN THAT THE WILDLIFE.
WILDFIRE URBAN.
THE WE WE THANK IF THE INSURED
CONDUCTS SPECIFIC WILD FIRE
MITIGATION.
INSURANCE COMPANIES SHOULD OFFER
A MITIGATION PREMIUM CREDIT FOR
THOSE PROPERTY OWNERS WHO
CONDUCT PROPER MITIGATION.
THE CDI SHOULD NOT ALLOW THE USE
OF THE BLACK BOX WILD VIRUS
MODELS.
ANY WILD VIRUS MODELS USED IN
RATING OR UNDERWRITING MINCED
MUST NOT BE TREATED AS A
PROPRIETARY BLACK BOX.
IT MUST HAVE PRIOR APPROVAL BY
THE CD I MUST BE TRANSPARENT AND
MUST BE SUBJECT TO PROPER THREE
INTERVENTION AND CHALLENGE.
CD I MUST REQUIRE AN APPEAL
PROCESS BEFORE THE ADVERSE
DECISION IS FINALIZED ENSURE
THAT HOMEOWNERS INSURANCE RATES
IN PREMIUMS ARE ADEQUATE.
AND NOT EXCESSIVE FOR THE WILD
VIRUS.
AND THE STATE OF CALIFORNIA.
SHOULD QUIT PASSING THROUGH ALL
THE COST TO CONSUMERS WHETHER
IT'S FROM P. JEANNIE DISASTER OR
FROM WILDFIRES. TO CONSUMERS.
THEY SHOULD CREATE A FINDER
GRANT PROGRAM TO GIVE HOMEOWNERS
IN EXCESS OF UP TO ABOUT TEN
THOUSAND DOLLARS. TO HELP
MITIGATE WHILE FIRE EXPLOSION
HARDEN THEIR HOMES IN ORDER TO
ACQUIRE OR MAINTAIN THEIR
HOMEOWNER'S INSURANCE OR
RECEIVER PREMIUM DISCOUNTS. FOR
CRYING OUT LOUD ALABAMA DOES
THAT.
I COULD USE IT I HAVE A TWELVE
BEAUTIFUL. HUNDRED TWENTY FOOT
REDWOOD TREES THAT GOT THE
BEETLE BY.
THAT HAS TO COME DOWN.
THAT'S ABOUT FIFTEEN THOUSAND
DOLLARS.
I'M GONNA GO CRACK MY KIDS PIGGY
BANK TO GET THAT DONE IT WOULD
BE NICE TO HAVE THAT FUND SO
FINALLY.
INSURANCE COMPANIES WILL NOT BE
ALLOWED TO USE CLIMATE CHANGE IS
A WAY TO GET THE CAMEL'S NOSE
UNDER THE PROTECTIVE PROP ONE OF
THREE TENT.
ESPECIALLY SINCE THEY ARE PART
OF THE REASON CLIMATE CHANGES
EXACERBATING THE RISKS THAT THEY
DON'T WANT TO ENSURE.
HISTORICAL DATA IS WORKING AND
WILL CONTINUE TO WORK JUST FINE.
INSURANCE COMPANIES WILL NOT
WALK AWAY FROM THIS MASSIVE AND
PROFITABLE CALIFORNIA ASSURANCE
MARKET.
THEY DIDN'T MALPRACTICE INSURERS
IN NINETEEN SEVENTY FIVE THE
MINUTE THEY LEFT THE STATE THE
NEXT DAY THERE I DON'T KNOW HOW
MANY MALPRACTICE INSURERS DOING
QUITE WELL RIGHT NOW
[inaudible]
SO. FOR THAT I JUST LIKE TO
THANK YOU FOR THE INVITATION AND
THANK YOU FOR LISTENING.
I THANK YOU FOR BEING HERE WE
REALLY APPRECIATE ALL OF YOU
BEING HERE AT THIS POINT I WILL
OPEN IT UP FOR MEMBERS STYLE
QUESTIONS ANYONE HAVING ANY
QUESTIONS.
WE WILL WAIT FOR MR.
SENATOR TO TAKE A SEAT.
THANK YOU SURE I I WISH I HAD A
DIME FOR EVERY TIME I FOR THAT --
I HAD HOW DID YOU.
COME TO THE AMOUNTS THAT YOU
PROVIDED HAD OUT HOW WOULD I
VERIFY THESE SAVINGS.
YOU COULD GO WITH THE CONSUMER
FEDERATION OF AMERICA THEY HAVE
THAT THEY'RE THE ONES THAT --
CALCULATED THAT -- A LOT OF
THOSE SAVINGS ARE -- TAKEN FROM
THE CALIFORNIA CDI -- THE
DEPARTMENT INSURANCE
INFORMATION THAT'S AVAILABLE AND
THEN WE HAVE IT AVAILABLE ON OUR
WEBSITE THE CONSUMER WATCHDOG.
USE THE TERM OF THE SECOND LEAST
CONCENTRATED STATE COULD YOU
EXPLAIN THAT A LITTLE MORE -- I
BELIEVE THAT WAS IN THERE TO THE
THE IDEA THAT THERE IS -- THE
COMPETITION.
THE ISSUE IS THAT WE HAVE AN
EXTREME -- HIGH LEVEL OF
COMPETITION THEY WE KNOW THAT
THEY'RE NOT CONCENTRATED INTO A
COUPLE OF COMPANIES AS ARE IN
OTHER STATES SUCH AS FLORIDA.
TEXAS.
AND AND WHY WOULD THAT BE.
WHY WHY WOULD WE HAVE SO MUCH
COMPETITION WHEN WE HAVE A
GOVERNMENT REGULATED?
INDUSTRY NOW WELL GOVERNMENT
REGULATION IN AND OF ITSELF IS A
GOOD THING IN FINANCIAL MARKETS
SPECIALLY FINANCIAL MARKET IS
THE FIFTH LARGEST IN THE WORLD
COST NSURANCE -- AND THE IDEA
THAT YOU HAVE A PRETTY GOOD A
REFEREE BLOW AND THE A CALLING
THE BALLS AND STRIKES IS
IMPORTANT AND WITH THE INSURANCE
INDUSTRY WANTS MORE THAN
ANYTHING EVEN WHEN THEY DON'T
WANT TO ADMIT AND SELF.
IS CERTAINTY.
THEY WANT HAVE A LEVEL PLAYING
FIELD THEY WANT CERTAINTY TO
COMPETE ON A LEVEL BASIS WITH
EVERYBODY ELSE.
AND PROP ONE OF THREE PROVIDES
THAT.
THE ACTUAL DISCLOSURE OF THIS
INFORMATION ALLOWS THE INSURANCE
COMMISSIONER TO HELP INSURANCE
COMPANIES DO THE BEST THEY CAN.
HAVING BEEN ON BOTH SIDES OF THE
THE THE THE EQUATION HERE AS AN
INSURANCE EXECUTIVE AND NOW IT'S
A CONSUMER ADVOCATE.
I CAN SAY THAT INSURANCE
INDUSTRY HIGHER EXISTS EXTREMELY --
THOSE OF THE GENTLEMAN TO MY
LEFT -- MISTER FRASIER'S
EXTREMELY TALENTED AND SMART
PEOPLE.
AND THEY ARE ALSO ALSO THINK
SOMETIMES THAT DAY NO MORE THAN
THE REGULATOR AND A LOT OF TIMES
THEY DO.
THE REGULATOR HAS TO PLAY CATCH
UP ALL THE TIMES TO THESE REAL
SMART INSURANCE EXECUTIVES AND
ATTORNEYS.
AND TO DO THE PROPERLY THEY HAVE
TO HAVE P FRONT REGULATION
MEANING EVERYTHING HAS TO BE
COMPLETELY SET FORTH RIGHT UP
FRONT.
THAT'S A PROBLEM -- THREE THIS
PROBLEM WITH THE SAYS WHATEVER
IT IS YOU GOT TO SHOW US YOU
WANNA RAISE PREMIUMS FINE SHOW
US.
DO IT THE CALIFORNIA DEPARTMENT
OF INSURANCE HAS THE EXACT RULES
AND REGULATIONS THEY KNEW TO
FOLLOW AND THEY DO A QUITE WELL
IN A RIDICULOUSLY DIFFICULT.
AND AND BUSY MARKET THAT'S THE
CALIFORNIA INSURANCE MARKETS.
SO ON ON THE BOTTOM OF PAGE TWO
OF OUR REPORT IT STATES IN THE
LAST SENTENCE.
CALIFORNIA'S RATE MAKING SYSTEM
HAS NOT UNDERGONE SOME OF THE
RADICAL CHANGES THAT HAVE
OCCURRED IN OTHER AREAS OF THE
COUNTRY.
RIGHT WHAT WOULD THAT MEAN.
IT IS THE TEXAS NGUYEN PROBLEM --
THE FLORIDA HURRICANE DISASTER
PROBLEM CALIFORNIA HAS A KICK
SOME SERIOUS ISSUES THAT WILD
FIRES IS GOT EARTHQUAKES
CALIFORNIA ALSO HAS THE
CALIFORNIA EARTHQUAKE AUTHORITY
THAT I KNOW ISSUES OF COME
RECENTLY BEFORE YOU -- AND THE
HIT THE PURPOSE OF THE HIGHLY
REGULATING AND MONITORING WHAT
GOES ON JUST LIKE WHAT HAS
HAPPENED IN OUR IN THE CRASH IN.
TWO THOUSAND EIGHT WHERE ARE THE
FINANCIAL MARKETS TOOK A TUMBLE
THE INSURANCE INDUSTRY DIDN'T.
THE INSURANCE INITIALLY DIDN'T
TUMBLE BECAUSE OF THE MCCARRON
FERGUSON ACT WHICH REQUIRES
STATES TO REGULATE NOT THE
FEDERAL GOVERNMENT TO REGULATE.
AND THE LOCAL REGULATION BEHIND
ELECTED INSURANCE COMMISSIONER
KEEPS THEM ON THEIR TOES AND ARE
ABLE TO REGULATE AND PAY MORE
ATTENTION.
THANK YOU WELCOME SIR -- MISTER
WALKER -- ON PAGE -- SEVENTEEN
YOU HAVE AN EXAMPLE THE FAIR
PLAN RATE INCREASE AND IT HAS A
TWENTY POINT 1%.
INCREASE APPROVED -- THAT EXCEED
7% SO COULD YOU EXPLAIN.
WELL FIRST AN ANSWER -- ANY
ANSWER CAN OF CAN FILE FOR
GREATER THAN 7%.
THEY JUST TAKE -- THE THERE IS
THE OPPORTUNITY FOR A CONSUMER
ADVOCACY GROUPS SUCH AS CONSUMER
WATCHDOG. TO CHALLENGE THAT RATE
INCREASE AND IF A HEARING IS
REQUESTED IT DOES HAVE TO GO TO
HEARING.
IF IT IS GREATER THAN A 7%
INCREASE SO ANY ANY COMPANY CAN
FILE FOR THAT.
THE FAIR PLAN IS NOT.
A PROP ONE OF THREE SUBJECT
ENTITY THEY'RE NOT.
AN ANSWER -- AND AND UNDER THAT
DEFINITION SO THEY FILE.
FOR WHATEVER THEY THINK THEY
NEED.
AND THE THE POINT OF THAT OF
COURSE IS. TO SHOW THAT EVEN
THOUGH THEY TOOK A 20% INCREASE.
THERE WERE CONSUMERS AND URBAN
BOOK OF BUSINESS WHICH IS.
THE MAJORITY OF THEIR BUSINESS
GOT A SIGNIFICANT DECREASE.
BECAUSE OF THE WAY THAT RAPE IS
DISTRIBUTED.
IN PEOPLE IN THAT MOVIE THEY GOT
SIGNIFY RATE INCREASES SO IT'S
7% IN THE AGGREGATE.
YEAH THAT'S IN THE AGGREGATE OR
NOT KIDS 20% IN THE CRICKET
THANKS MISTER FRAZIER YOU'VE
BEEN ACCUSED OF BEING BRIGHT.
DON'T LISTEN TO EMERGE.
I DIDN'T HEAR HANDSOME BUT I
COULD THROW THAT IN -- YOU FOR A
YOU USED A LOT OF INTERESTING
TERMS IN YOUR PRESENTATION --
RESTRAINED RATES [inaudible]
GREAT INADEQUACY.
CLIMATE RATE INCREASES --
PROVIDED IN OTHER STATES.
CLIMATE CHANGE PRICING AND YOU
CAN ONLY RAISE RATES BASED ON
TWENTY YEAR TREND SINCE RIGHT
NOW WE HAVE A TWO YEAR TREND
IT'S AWFUL RATE -- SO I I'M BUT
BUT THE THING YOU DID DID YOU
SAID IT'S AN ARMATURE THAT KIND
OF POPS OUT TO ME THE MOST AND I
LIKE YOU.
TO EXPLAIN A LITTLE MORE AS WE
DOES NOT ALLOW FOR RE INSURANCE
AND AND COULD YOU EXPLAIN THAT A
LITTLE BIT MORE WHY.
IS THAT THE CASE.
WHAT'S A POLICY CHOICE BY THE
DEPARTMENT OF INSURANCE IN.
WHAT I HOPE TO CONVEY IN MY
COMMENTS IS?
BLEACHER INTO HISTORY POSITION
ISN'T THAT PROP ON A THREE IS
GOOD OR BAD IT'S OBVIOUSLY AND
HOW.
THE REGULATOR CHOOSES TO
IMPLEMENT PROP ONE OF THREE AND
THE REGULATIONS PROMULGATED BY
THE DEPARTMENT TO IMPLEMENT PROP
ONE OH THREE AND IT'S JUST A
COMPLICATED BUNDLE OF CHOICES.
AND SO IN THE THREE ASPECTS OF
THE BUSINESS YOU'VE GOT
UNDERWRITING RATING AND CLAIMS
[inaudible]
AND DID YOU HEAR MOST OF THE
POLICY PROPOSALS ARE LET'S MAKE
CLAIMS BE PAID MORE.
LET'S RESTRICT UNDERWRITING SO
THAT WE HAVE IT'S HARDER TO NON
RENEW AND YOU JUST HAVE TO SORT
OF TAKE EVERYBODY WITH NO REAL
CONNECTION TO THE THIRD ELEMENT
WHICH IS RIGHT.
RIGHT IT'S EASY TO SAY TAKE
EVERYBODY PAY HIGHER CLAIMS AND
THEN WE'RE GOING TO GO AHEAD AND
NOT LET THEM CHARGE ENOUGH.
AND NOT SUSTAINABLE TO LET'S NOT
RIGHT.
AND SO THE DEPARTMENT OF
INSURANCE HAS CHOSEN IT'S NOT
REQUIRED BY PROPOSITION ONE OF
THREE BUT DEPARTMENT OF
INSURANCE HAS CHOSEN. TO
APPROACH THE RATE MAKING AS A
FREE INSURANCE IS NOT A PART OF
DECISION MAKING FOR INSURANCE
COMPANIES.
AND INSURANCE COMPANIES IN
REALITY DO USE REINSURANCE IN
THE USE IT FOR RISK MANAGEMENT
PURPOSES THAT USE IT SO THEY CAN
PRODUCE NEW BUSINESS THEY DON'T
HAVE TO TELL THEIR AGENTS.
OPERATIC CAPITAL WE CAN'T
PRODUCE ANY MORE BUSINESS SO
SORRY -- YOU CAN'T WRITE ANYMORE
YOU CAN'T ERNIE INNER EARNING
MORE COMMISSION RIGHT SO WE
INSURANCE ISN'T ACCEPTED REGULAR
PART.
OF THE INSURANCE MARKET NOW THE
POLICY CONCERN OF THE
DEPARTMENT'S UNDERSTANDABLE
WHICH IS PROP ONE OF THE THREE
SUBJECTS INSURANCE COMPANY RATES
TO PRIOR APPROVAL BUT IT DOESN'T
SUBJECT RE INSURANCE.
RATES TO PRIOR APPROVAL SO THE
FEAR HAS ALWAYS BEEN WELL IF WE
ALLOW THE UNDERLYING COST
INCREASES OF REINSURANCE TO BE
PASSED ALONG.
THEN THAT'S SORT OF A WAY TO GET
AROUND THE PROP ON A THREE RATE
CONTROLS AND I UNDERSTAND THAT
THEORETICAL CONCEPT BUT THERE'S
A PRICE TO BE PAID.
BECAUSE AS THE WORLD US DOWN
LOOKING A CALIFORNIA AND WHAT
WHAT ARE THE MESSAGES THAT THEY
GET.
THE NEW NORMAL WHEN THEY SEE
THESE GIGANTIC LOSSES AND
THEY'RE EXPERIENCING GIGANTIC
LOSSES AROUND THE WORLD.
DO YOU THINK THE REINSURANCE
WORLD OF SAYING HEY I GOT A HUGE
APPETITE FOR CALIFORNIA AND I
REALLY REALLY WANT. TO GIVE
GREAT DEALS TO THESE INSURANCE
COMPANIES DOING BUSINESS THERE
THAT'S NOT WHAT THEY'RE SAYING.
THEY ARE -- INCREASING THEIR
PRICES INSURANCE COMPANIES HAVE
TO FIGURE OUT HOW TO DEAL WITH
THAT SEVEN INSURANCE COMPANIES
REINSURANCE COSTS GO UP 30%
GUESS WHAT.
THEY HAVE NO WAY TO FUND THAT
EXCEPT JUST OUT OF PROFITABILITY.
AND SO THEY THEN HAVE TO FIGURE
OUT WELL.
IF WE DON'T HAVE ENOUGH RATE
COMING IN.
THEN WHAT DO WE DO WE CAN'T PAY
LOWER WE CAN'T BE HARDER ON
CLAIMS THAT'S NOT A RIGHT WAY TO
DO IT RIGHT SO THERE'S ONLY ONE
OTHER PART OF THE BUSINESS AND
THAT'S UNDERWRITING.
AND IF YOU CAN'T GET ENOUGH
PRICE YOU HAVE TO START FIGURING
OUT HOW DO I. D. LEVERAGE MY
BOOK IN A WAY TO REDUCE THE
AVERAGE RISK IN THE BOOK OF
BUSINESS.
AND THAT'S A STERILE WAY OF
SAYING HOW DO I SAY NO TO MORE
PEOPLE.
WE HAVE TO READ NON RENEW MORE
PEOPLE.
WE HAVE TO NOT WRITE AS MUCH NEW
BUSINESS WHEN YOU'RE LOOKING AT
AREAS WHERE YOU CAN'T GET STATE
APPROVAL. TO CHARGE AN ADEQUATE
RATE.
AND SO IT'S NOT THAT WE HAVE A
GENERAL COMPLAINT ABOUT.
THE DEPARTMENT AND CONSUMER
WATCHDOG APPROACH ON RATES IT'S
FINE IF THEY WANT TO TO TAKE THE
POSITION THEY'VE TAKEN IN COURT.
WHICH HAS BEEN.
THEY WANT CALIFORNIA INSURANCE
RATES FOR THE ADMITTED MARKET.
CONFESS KATORI RATE UNDER THE
TAKINGS CLAUSE OF THE
CONSTITUTION.
THEIR POLICY POSITION IS THEY
WANT RATES TO BE AS LOW AS
POSSIBLY THEY CAN BE WITHOUT IT
BEING A TAKING.
OKAY.
THAT'S FINE THAT'S THEIR LEGAL
POSITION BUT THERE'S A
CONSEQUENCE TO THAT AND THAT'S
THE FRUSTRATING PART IS THAT
THEY DON'T ACKNOWLEDGE THE
CONSEQUENCE.
OF THE PREDICTABLE CONSEQUENCES
OF THEIR POLICY CHOICE THE
POLICY CHOICES TO PUSH RATES
DOWN.
BUT THEN THEY SAY WELL THAT'S
NOT RIGHT OH BY THE WAY PAY MORE
IN CLAIMS WITH NO QUESTIONS
ASKED OR FEWER QUESTIONS AND BY
THE WAY YOU HAVE TO SAY YES TO
EVERYBODY
OKAY SO AT SOME POINT.
WHEN YOU YOU HAVE PLENTY OF TIME
TALKING?
JOE HOW OFTEN PUBLIC.
AND SO IT'S JUST A POLICY CHOICE.
AND COMPANIES ARE TRYING TO
FIGURE OUT HOW CAN THEY ACHIEVE.
THE ABILITY TO OPERATE -- THE
END IF YOU LOOK AT WHAT THE
RESULTS ARE IN THE FIRST
EIGHTEEN YEARS OF THE CENTURY ON
A DIRECT BASIS.
PURSES ON A NET BASIS WHERE WE
ACTUALLY GET TO LOOK AT
REINSURANCE.
WELL THEY'RE QUITE A DIFFERENT
PICTURE.
OKAY THE DEPARTMENTS A
IMPLEMENTATION OF PROP ON A
THREE WOULD HAVE YOU BELIEVE IN
THE FIRST EIGHTEEN YEARS OF THE
CENTURY.
THAT INSURANCE COMPANIES HAVE
MADE MONEY.
ON OTHER CA AND THEIR COMBINED
RATIO BECAUSE THEIR COMBINED
RATIO OVER THE FIRST EIGHTEEN
YEARS IS ABOUT.
NINETY NINE POINT 6%.
BUT IF YOU LOOK AT ACTUALLY
THEIR INSURANCE PREMIUMS THEY
PAID VERSUS THE REINSURANCE
RECEIVABLES THAT THEY RECEIVED
IT'S A COMPLETELY DIFFERENT
STORY WITH A LOSS IN THE FIRST
EIGHTEEN YEARS OF ABOUT TWENTY
FIVE BILLION DOLLARS.
SO IT IS -- THE OTHERS JUST AT A
DISCONNECT THAT WE THINK.
WE OUGHT TO HAVE A DISCUSSION
ABOUT BUT THEN MISTER WALKER HOW
COME THE INSURANCE -- FOR
EARTHQUAKES ALLOWS FOR CHARGING.
FOR REINSURANCE AND WE HAD THAT
DISCUSSION [inaudible]
JUST RECENTLY.
YES SO OBVIOUSLY.
INSURERS DON'T WRITE BUSINESS IN
CALIFORNIA JUST BECAUSE IT LOOKS
GOOD ON THE RESUME THEY ARE HERE
TO MAKE MONEY AND I'M SURPRISED
TO HEAR THEY'VE NEVER MADE MONEY.
BUT THIS IS JUST OUT OF THEIR
GENEROSITY -- MAYBE THEY WOULD
BE HERE I DON'T THINK THAT'S
TRUE -- EARTHQUAKE A FOUR
EARTHQUAKE IN MED NOW THERE IS A
REINSURANCE COMPONENT.
UNDERSTANDING THAT THEY ARE VERY
SPECIALIZED COVERAGES SO WE'RE
NOT TALKING ABOUT.
AUTO OR HOME OR COMMERCIAL TYPE
PERIL.
SLICE COVERAGE WITH QUICK ALMOST
NEVER HAS A LOSS UNTIL IT DOES
RIGHT AND THEN IT IS A BIG.
ONE AND SO -- THERE ARE OTHER
FACTORS THAT PLAY INTO THAT.
ABILITY TO CHARGE A PREMIUM FOR
EARTHQUAKE INSURANCE THERE'D
LEVERAGE FACTOR ARE THE PROFIT
MAKING ABILITY IS DIMINISHED
BECAUSE OF THAT REINSURANCE LOAD
SO IT ISN'T LIKE A FREE RIDE FOR
EARTHQUAKE.
AND MET MAO ALSO ESPECIALLY
COVERAGE MOST CLAIMS ACTUALLY
END UP IN LITIGATION AND A
SETTLEMENT KNOWS NOT SO MUCH
STRAIGHT UP CLAIMS.
SO WE DO RECOGNIZE SPECIALITY
COVERAGES.
BUT I WOULD SAY YOU KNOW FROM
OUR PERSPECTIVE WE GIVE RATE
BASED ON NEED.
AND IF YOU LOOK AT THE EXAMPLES
FOR EXAMPLE OF THE FAIR PLAN
THAT YOU POINTED OUT.
THEY ARE GETTING A 20% INCREASE
WE WOULD LIKE THAT RATE TO BE AS
LOW AS POSSIBLE BUT THAT'S NOT
HOW WE DON'T.
IMPOSE WHAT WE WISH WE IMPOSE
WHAT THE DATA SUGGESTS THE RATE
SHOULD BE.
AND SO THEY GOT A RATE INCREASE
PARTICULARLY FOR THE MOVIE.
THAT OTHER EXAMPLE I GAVE OF THE
FIRE LINE SCORES.
THAT COMPANY ALREADY HAS A
SIGNIFICANT SURCHARGE FOR PEOPLE
IN THE WILD FIRE AREA SO WE DO
ALLOW RATE FOR THOSE AREAS THEY
DO CHARGE MORE.
AND I'LL SAY OUR PROCESS OF
USING THIS CATASTROPHE LOAD.
THESE LAST COUPLE YEARS ARE
PROBABLY CAUSING THAT
CATASTROPHE LOW TO INCREASE BY
ABOUT MAYBE 40%.
THOSE LOSSES ARE GOING TO BE
LOADED INTO INSURERS RATES FOR
THE NEXT DECADE OR MORE.
UNLESS THE RESERVES SUBROGATION
RECOVERY TO HELP PULL THOSE
LOSSES BACK OUT.
SO WE DO ALLOW FOR THE RATE THIS
WILL BE A DRAMATIC RATE INCREASE.
DESPITE THE CATASTROPHE LOAD.
ASSESS THAT WE USE FOR CONSUMERS
AROUND THE STATION IMPORTANT.
I THINK JILL FOCUS ON THE FAIR
PLAN IS IS GREAT BECAUSE OF SEEK
KNOWLEDGE THE FAIR PLAN ISN'T
UNDER THE SAME RULES.
HEY THERE ACTUALLY ENTITLED TO
AN ACTUAL RELEASE ON RATE.
AND THE IMPLEMENTATION OF PROP
ON A THREE THE DEPARTMENT HAS
CHOSEN DOES NOT.
YIELD UNNATURALLY SOUND RIGHT.
AND SO YOU SEE WHEN YOU HAVE.
DIFFERENT STANDARDS THE FAIR
PLAN GETS A 20% INCREASE.
RIGHT SO I THINK THAT'S AN
EGGNOG AND BY THE WAY I BELIEVE
THE IMPLEMENTATION OF THE THE
THE FIRE LINE RELATIVITY'S FOR
FIRE LINE.
IN THE FAIR PLAN THEY'RE ALLOWED
TO CHARGE HIGHER -- HIGHER
AMOUNTS AT THE UPPER END OF THE
RISK RANGE WERE AS IN THE
ADMITTED MARKET THOSE WOULD BE
SUPPRESSED AND AND SUBSIDIES
WOULD BE BORNE BY URBAN AND
SUBURBAN CUSTOMERS TO REDUCE THE
IMPACT.
IN IN THE WILL BE SO THERE ARE
JUST DIFFERENT POLICY CHOICES
HERE THAT ARE THERE ARE INVOLVED
AND IT'S IT'S NOT MEANT TO BE --
A CRITICISM ASMUCH AS IT'S
GOING TO BE IF WE'RE GOING TO BE
TOLD THAT THERE SHOULD BE
RESTRICTIONS ON UNDERWRITING.
WELL LEAST ACKNOWLEDGE THE THE
RATING CHOICES THE DEPARTMENT
HAS MDE THAT ARE DRIVING THESE
UNDERWRITING RESPONSES AND THAT
THAT'S WE DON'T SEE THAT
ACKNOWLEDGMENT HAVING BEEN MADE.
MADAM CHAIR I JUST WANT TO CLOSE
WITH ONE LAST QUESTION AND THAT
IS MISTER FRAZIER.
THEN WHY IS THERE SUCH A HIGH
LEVEL OF COMPETITION IN THE
STATE OF CALIFORNIA THE SECOND
HIGHEST ACCORDING [inaudible]
TO MICHAEL.
WHAT WELL I MEAN I CERTAINLY
THINK THE REPORT SHOWED THAT
SINCE IN THE LAST TWENTY YEARS
THE NUMBER OF COMPANIES HAVE
REDUCED BY A THIRD?
OKAY.
YOU KNOW THERE'S A TREND IN THE
TREND IS GOING.
WELL THE EXTRACTION IT'S HARD TO
KNOW I MEAN THERE AGAIN WITH ANY
REGULATORY SYSTEM THERE ARE
PLUSES AND MINUSES THE THE THE
IMPLEMENTATION OF PROP ONE OH
THREE IT'S PROBLEMATIC IN SOME
WAYS BUT IT INSULATES COMPANIES
FROM COMPETITION IN A LOT OF
WAYS AS WELL RIGHT.
SO -- SO THERE'S A LOT OF
REASONS FOR COMPANIES TO HAVE
MARKET SHARE TO STAY.
RIGHT SO AGAIN WE'RE NOT HERE TO
HAVE A BROADSIDE AGAINST PROP
ONE OH THREE ASSISTS THERE ARE
SOME IMPLEMENTATION DECISIONS
THAT HAD CONSEQUENCES AND WE
JUST WANTED KNOWLEDGE MEN OF
THAT.
THANK YOU THANK YOU MEASURE
THANK YOU ANY OTHER MEMBERS
WISHING TO ASK QUESTIONS.
WELL I JUST HAVE ONE ASK
QUESTIONS IF I MAY -- I'VE HEARD
CENTER MORE LIKE NOTE THAT TO
YOUR TRêN IS NOT ENOUGH.
TO PREDICT THE FUTURE SO I'M
CURIOUS ABOUT HOW WOULD
PROBABILISTIC MODELING HELP
ADDRESS CLIMATE CHANGE.
IS IT YES.
THANK YOU.
WELL THE THE CONCERN IS THAT THE
THE MESSAGING WE'RE RECEIVING
FREQUENTLY IS THAT WERE IN THE
NEW NORMAL AND THERE'S A WORRY.
WILL NINETEEN BE LIKE.
SEVENTEEN EIGHTY AND WHO KNOWS
RIGHT NOW EVERYONE HOPES IT'S
NOT AND WE HOPE OVER OVER TIME --
AS THE STATE HAS MORE
INVESTMENTS IN FUEL MANAGEMENT
AND AND OTHER ISSUES THAT WE CAN
REDUCE OSSES IN THE AGGREGATE.
BUT IF WE ARE GOING TO HAVE
CONTINUED YEARS OF CATASTROPHIC
LOSSES THAN LOOKING AT THE
AVERAGE OVER THE LAST TWENTY
YEARS OR THEY'RE SORT OF A
SMOOTHING OF LOSSES OVER TIME.
IS NOT.
A A A A USEFUL PROTECTION OF IF
THINGS HAVE CHANGED WHERE THE
FUTURE IS GOING TO BE DIFFERENT
FROM THE PAST.
SO THE POINT IS IF THERE IS A
MODELING METHODOLOGY THAT MORE
ACTUALLY REFLECTS THE RISK OF
LOSS MOVING FORWARD THAT'S NOT.
REALLY.
ANTON USING LAST TWENTY YEARS
THEN WE WOULD LIKE THE CASE TO
AT LEAST MAKE THE ARGUMENT THAT
THIS IS A MORE -- APPROPRIATE
METHOD OF BUILDING A RATE.
AND IF WE CAN'T PROVE IT THEN
THE DEPARTMENT IS FINE TO SAY NO
BUT RIGHT NOW WE'RE NOT EVEN
PERMITTED TO MAKE THAT CASE.
THANK YOU WELL THANK YOU
GENTLEMEN FOR YOUR TESTIMONY
KERRY WE COOK ON ANOTHER TWO
HOURS BUT I REALLY APPRECIATE
YOUR TIME AND YOUR INSIGHT AND
THAT.
WE'RE GONNA BY THE NEXT PANELIST
TECH COMMA.
ON THE NEXT PANEL WILL BE ACCESS
TO HIGH FIRE RISK AREAS.
AND WE'RE GONNA FIGHT -- MARK
SECOND VICE PRESIDENT STATE
GOVERNMENT RELATIONS OF AMERICAN
PROPERTY CASUALTY INSURANCE
ASSOCIATION AS WELL THE STATE'S
EATEN REGULATION I'M SORRY
REGULATORY AFFAIRS ADVOCATE ROLE
COUNY REPRESENTATIVE OF
CALIFORNIA.
AND YOU MAY PROCEED THANK YOU
FOR BEING HERE.
THANK YOU.
THANK YOU MADAM CHAIR MEMBERS OF
THE COMMITTEE FOR INVITING ME TO
TALK ON WHAT I THINK IS ONE OF
MORE IMPORTANT ISSUES THAT WE
FACE.
MY NAME IS MARK SEGMENT NINE
VICE PRESIDENT STATE GOVERNMENT
RELATIONS FOR THE AMERICAN
PROPERTY CASUALLY INSURANCE
ASSOCIATION.
I RARELY AGREE WITH MR MATIC
ANYTHING MISTER MATTOX SAYS IN
HIS NEW LIFE BUT I DO AGREE THAT
MISTER FRASIER'S BRILLIANT SO
WE'LL START THERE -- ACCESS TO
INSURANCE IS KEY TO HOMEOWNERS
OF ITS ONE OF THINGS WE NEED TO
PAY ATTENTION TO A YOU CAN'T GET
A MORTGAGE WITHOUT HOMEOWNERS
INSURANCE -- UNFORTUNATELYTHE
FLIP SIDE OF THAT AS WE FIND OUT
THAT WHEN A LOT OF PEOPLE PAY
OFF THEIR MORTGAGE THEY DO THEY
DROP THEIR HOMEOWNER'S INSURANCE --
WE ACTUALLY SPENT A LOT OF TIME
IS AN ASSOCIATION TRIED TO
REMIND PEOPLE -- THAT THEY NEED
TO UPDATE THEIR INSURANCE
POLICIES AND THEY NEED TO MAKE
SURE THAT THEY MAINTAIN THEIR
INSURANCE POLICIES EVEN IF THEY
PAID OFF THEIR HOUSES -- AS
HIGHLIGHTED BY THE PREVIOUS
PANEL WE NEED TO BE CAREFUL NOT
TO CONFUSE AVAILABILITY WITH
AFFORDABILITY -- RATE INCREASES
ARE OUT THERE AND PEOPLE ARE
SEEN THEM -- BUT THE IT THE
DESIRE NOT TO PAY INCREASED
INSURANCE POLICY IS NOT THE SAME
THING AS NOT HAVING ACCESS TO AN
INSURANCE POLICY.
THE PREVIOUS PANEL ALSO TALKED
ANOTHER ISSUE THAT IS KEY HERE
WHICH IS OF INSURER CAN'T GET
ADEQUATE RATE TO COVER THE REST
THAT THEY BELIEVE THAT THEY FACE --
THIS IS NOT A BUSINESS THAT YOU
MAKE IT UP IN VOLUME -- THEY
HAVE TO USE OTHER TOOLS AND ONE
OF THE FEW OTHER TOOLS IS TO USE
UNDER WRITING TO CHOOSE WHERE
THEY WANT TO WRITE AND HOW MANY
POLICIES THEY WANT TO WRITE IN
VERY SERIOUS.
INJURES ALSO FACE RESTRICTIONS
PLACED ON THEM BY RE INSURERS --
WE TALK ABOUT THE COSTA
REINSURANCE BUT INJURY RANCHERS
WILL ONLY PROVIDE COMPANIES WITH
A CERTAIN AMOUNT OF CAPACITY --
BECAUSE THAT'S THE RISK THAT
THEY WANT TO TAKE SO IF A
RANCHER IS LIMITED THE COMPANY'S
CAPACITY THAT WILL ALSO REDUCE
THE AMOUNT OF POLICIES THAT THEY
CAN WRITE.
SEVERAL YEARS AGO GOVERNOR BROWN
STARTED THE TREE MORTALITY TASK
FORCE -- AS PART OF THAT AND AT
THE REQUEST OF MANY WORLD
ELECTED OFFICIALS THERE WAS AN
INSURANCE SUBCOMMITTEE THAT WAS
CREATED -- STATES NUYS SPENT
MANY HOURS OF OUR LIFE THAT WILL
NEVER GET BACK ON THIS TASK
FORCE.
BUT ONE OF THE ISSUES THAT A
LOOK THAT WAS AVAILABILITY AND
WHAT WE DISCOVERED IS THAT WHILE
THERE IS A LOT OF ANECDOTAL DATA
ON BOTH SIDES OF IT IT IS VERY
DIFFICULT TO FIND ACTUAL DATA ON
THE AVAILABILITY -- EYES POINT
AS POINTED OUT THAT STEP
BRIEFING COMPANIES NEED TO BE MY
MIND FOR MANAGING THEIR RESTORE
SURE THE REST ARE NOT OVER THE
CONCENTRATED ONE POTENTIALLY
RISKY AREA.
I ONCE WORKED FOR A COMPANY THAT
HAD AN INSURANCE AGENT THAT SOLD
FOUR HUNDRED POLICIES IN A
MOBILE HOME PARK.
IT WAS GREAT UNTIL THAT MOBILE
HOME PARK BURNED DOWN -- SO
COMPANIES ARE REEVALUATING THEIR
WRISTS AS THEY AS CONDITIONS
CHANGE AS WE BEGIN TO UNDERSTAND
WHAT WE NOW ARE REFERRED TO AS
THE NEW NORMAL.
IS THAT WERE NEVER CONSIDERED
FIRE WHICH ARE NOW BEING
CONSIDERED FIRE REST THE
QUESTION IS.
IF COMPANY A DECIDES NOT TO
RENEW POLICIES IN AN AREA ARE
THERE COMPANIES THAT WILL STEP
IN AND WRITE THE BUSINESS THIS
IS THE KEY QUESTION WE NEED TO
DO. ONE OF THINGS WE DISCOVERED
AS WE'RE HAVING THESE
CONVERSATIONS OF THE TASK FORCE
ON AVAILABILITY.
IS A LOT OF IT IS DETERMINED BY
HOW IT CONSUMER PERCHES
INSURANCE EVAN AND CONSUMER HAS
A WHAT IS NOT A CAPTIVE AGENT
AND THAT AGENT ONLY SELLS ONE
COMPANIES INSURANCE.
AND THAT COMPANY DECIDES TO
READJUST THEIR BOOK AND MAY NOT
BE WRITING IN THAT PARTICULAR
AREA.
THAT CONSUMER MAY GET A
PERCEPTION THAT THERE'S NOT
INSURANCE AVAILABLE THE SAME
THING CAN BE SAID FOR A COMPANY
FOR AN INDIVIDUAL WHO WORKS WITH
AN AGENT THEM ONLY HAVE A COUPLE
OF AGENTS.
SO WHAT WE TO SWAT WE SET UP IN
THE TASK FORCE WHICH I THINK
IT'S ONE OF THINGS THAT WE MAY
SEE THAT WOULD BE VERY HELPFUL
IS A SIERRA INSURANCE FINDER.
THIS WAS A CONCEPT THAT THE
MARKET IS INEFFICIENT BECAUSE
CONSUMERS DO NOT HAVE THE
ABILITY TO HAVE GOOD INFORMATION.
A GOOD FRIEND OF MINE WHOSE
HOUSE LIVES JUST OUTSIDE THE WAS
LEE AREA GOT A 5100% INCREASE ON
HIS INSURANCE POLICY.
BUT HE WEN OUT AND SHOPPING
FOUND A BETTER POLICY FOR LESS
RISK BUT HE'S BEEN IN THE CHARTS
INDUSTRY FOR FORTY YEARS SO WE
KNOW THESE THINGS.
MOST CONSUMERS DEL THE CONCEPT
TIMED INSURANCE FINDER WHICH IS
BEING PILOTED AND THE THE C. R.
T. ZERO CHARGE FIGHTER AND IS
ALSO PART OF AB. EIGHTEEN SEVEN
THE FIVE LEVINE IS THAT
CONSUMERS WHO CAN'T FIND
INSURANCE CAN PUT THEIR
INFORMATION ON A WEBSITE
COMPANIES AND AGENTS THAT
REPRESENT COMPANIES THAT ARE
STILL WRITING IN THESE
BUSINESSES.
AREAS CAN THEN FIND AND
HOPEFULLY CONNECT AND HOPEFULLY
WE'LL BE ABLE TO KIND OF TAKE
CARE OF THAT -- AS YOU KNOW
CONSUMERS INSURANCE COMPANIES
ARE REQUIRED PROVIDE HOMEOWNERS
INSURANCE EITHER DIRECTLY OR FOR
THROUGH THE FAIR PLAN THE FAIR
PLAN IS AS REFERENCE IN YOUR
MATERIAL THROUGH THE INSURER OF
THE LAST RESORT.
ALTHOUGH ORIGINALLY CREATED IN
THE NINETEEN SIXTIES AFTER THE
URBAN.
UNREST AND STILL PRIMARILY FOCUS
ON URBAN AREAS THERE IS A
GROWING BOOK OF BUSINESS FOR THE
FAIR PLAN DEALING WITH WHILE
THESE WILDFIRE INTERFACE AREAS.
I IN MANY WAYS THE FAIR PLAN
AXES A CANARY IN THE COAL MINE
WE CAN ANTICIPATE THAT IF THE
FAIR PLAN POLICY COUNTS CO OP WE
MADE THAT MAY SIGNAL MAY SIGNAL
A PROBLEM IN THE ADMITTED MARKET
THAT WE NEED TAKE A LOOK AT
HOWEVER WE NEED TO BE.
CAREFUL THAT WE FULLY UNDERSTAND
THE RATES -- THERE WAS
CONVERSATIONS EARLIER ABOUT THE
APRIL RATE INCREASE WELL
IRONICALLY THE FAIR PLAN SAW A
HUGE SURGEON POLICIES IN MARCH
WAS THAT DUE TO THE IMPENDING
RATE INCREASE THAT AGENTS WERE
PUSHING WE DON'T KNOW.
ANOTHER THING WE NEED TO TRACK
IS HOW LONG TO POLICY STAY WITH
THE FAIR PLAN -- WHAT THE FAIR
PLAN IS FOUND IS AT 12% OF THEIR
POLICIES STAY LESS THAN FOUR
MONTHS?
IN WHICH THAT MEANS THAT THESE
PEOPLE ARE THAN FINDING COVERAGE
OUT IN THE MINUTE MARKET WHICH
IS WHAT WE WANT THEM TO BE.
ALL WE ALSO NEED TO LOOK AT THE
SURPLUS LINES MARKET WITH HER
LITTLE REFERENCE HERE -- THE
STAFF ANALYSIS REFERENCES SOME
OF THE MORE EXOTICS A SURPLUS
LINES COMPANIES LIKE LLOYDS OF
LONDON OF MANY OF OUR NOT THAT
EXOTIC MANY OF MORE -- DID BY
ADMITTED INSURERS -- SUCH AS A I
G. A NATIONWIDE LIBERTY OTHERS
HAVE THESE COMPANIES THE USE
THAT BECAUSE THEY ALLOW THE
FLEXIBILITY TO WRITE IN HIGH
RISK AREAS WE HAVE SEEN SOME
INCREASE.
IN THE SURPLUS LINES MARKET WE
DON'T KNOW WOODS IS VERY THICK
HOW SIGNIFICANT IS.
CLEARLY THE MARKET IT'S HARD IN
AND COMPANIES ARE TAKING A CLOSE
LOOK AT THE REST IN THEIR BOOK
OF BUSINESS.
THERE IS ANOTHER TOOLMENTION IN
THE STAFF BRIEFING THAT CAN HELP
MORE INSURERS RIGHT BUSINESS
THAT IS A BETTER USE OF MODELING.
BY THIS TIME OF MODEL IN ANY
PREDICTIVE MODELING WE ARE
HEARING A LOT ABOUT HOW THINGS
HAVE CHANGED IN CALIFORNIA HOW
WE'RE LIVING IN A NEW NORMAL.
UNFORTUNATE OUR MODELS DO NOT
ALLOW US TO LOOK FORWARD THEY
ONLY ALLOW US TO LOOK BACKWARDS.
AND USE THAT ANALOGY HOW THIS
BECOMES PROBLEMATIC IN A CAR
YOUR WINDSHIELD IS MUCH BIGGER
THAN YOUR REAR VIEW MIRROR
BECAUSE YOU DO NEED TO SEE WHERE
YOU'RE GOING AND THE INSURANCE
INDUSTRY HAS THAT SAME ISSUE.
WE HOPE THAT BY BETTER USE OF
PREDICTIVE MODELING THAT ALLOW
COMPANIES TO BETTER UNDERSTAND
THE RISKS WHEN INSURANCE CAN
UNDERSTAND THE RISKS THAT THEY
CAN UNDERSTAND THEIR APPETITE.
MY ASSOCIATION REPRESENTS A
BROAD -- CROSS SECTION OF LARGE
MEDIUM AND SMALL INSURERS IN
MANY CASES SMALL MEDIUM INSURERS
MAY USE THESE DIFFERENT MODEL IN
AN UNDERWRITING TOOLS AND THEY
HAVE AN APPETITE TO WRITE IN
HIGH RISK AREAS WERE SMALL
COMPANIES DO NOT.
REMEMBER DURING A PARTICULARLY
HEATED CONVERSATION DURING THE
INSURANCE TASK FORCE MEETING
WHEN A CAPTIVE AGENT WAS TALK
ABOUT AVAILABILITY PROBLEM GRASS
VALLEY.
I HAVE ONE OF MY MEMBERS ON THE
PHONE TO SEND OUT WITH OUR
COMPANY WRITING POLICIES IN
THERE BUT THEY WERE LOSING
POLICIES TO OTHER COMPANIES.
SO WE NEED TO UNDERSTAND THAT
THERE IS A VARIETY OF COMPANIES
THAT MAY BE WILLING TO WRITE IN
THIS AREA WE NEED TO MAKE SURE
THAT WE FOSTER THAT.
AND THE ADDRESS OF TIME --
BREAST AND TAKE QUESTIONS.
WELL IT TO THE PRECEDING APPLE
HOLDER QUESTIONS UNTIL YOU'RE
DONE THANK YOU SO MUCH INTRODUCE
YOURSELF PLEASE THANK YOU GOOD
MORNING I'M STACY HEATING RURAL
COUNTY REPRESENTATIVES OF
CALIFORNIA AND I REALLY
APPRECIATE THE INVITATION TO
COME AND SPEAK THIS MORNING.
I DON'T CLAIM TO BE AN EXPERT ON
INSURANCE IN ANY WAY SHAPE OR
FORM BUT I AM YOU KNOW I HAVE A
LOT OF KNOWLEDGE OF COUNTIES IN
RURAL COUNTIES AND WHAT'S GOING
ON THERE AND SO.
I'LL SPEAK FROM THAT PERSPECTIVE
THIS MORNING AND MARK IS
COMPLETELY RIGHT WE DID GIVE A
LOT OF OUR LIVES TO HIM HE
SUBGROUP OF THE OF ON INSURANCE
TO THE TREE MORTALITY TASK FORCE
IT WAS ABOUT A YEAR AND A HALF
PERIOD I THINK THAT WE WORKED ON
THAT.
A LOT OF OUR MEMBER COUNTIES
PARTICIPATED THAT GROUP ARE OUR
LOCAL ELECTED THEM WORKED REALLY
HARD TO TRY.
TO FIND SOLUTIONS I MEAN IT
WASN'T A COMBATIVE GROUP BUT
THEY WANT TO FIND SOLUTIONS FOR
THEIR CONSTITUENCIES BECAUSE IF.
THEY'RE NOT CALLING THE
DEPARTMENT OF INSURANCE THEY'RE
CALLING THEIR LOCAL ELECTED
OFFICIALS SAYING MY POLICY JUST
GOT NON RENEWED OR CANCELLED OR
MY A PREMIUM JUST WENT UP THREE
AND A HALF TIMES AND I DON'T
KNOW WHAT TO DO ABOUT THAT AND
THEN WHEN.
THEY ARE ELECTED WITH THE COLOR
ELECTED THAN THEIR ELECTED CALLS
ME IF THEY'RE ON MY BOARD SO
THAT'S WHAT I'M HEARING AND THAT.
I WANT TO TURN YOUR ATTENTION TO
PAGE BACK TO PAGE TWENTY OF
DOLE'S.
OF DOLE'S PRESENTATION BECAUSE
HE KIND OF DENTAL WORK FOR ME
AND I DIDN'T ANTICIPATE THAT SO
GOD BLESS HIM ON THAT.
BUT AND HE HAS.
A LOVELY CHART HERE THIS IS THE
NUMBER OF CONSUMER COMPLAINTS.
ABOUT HOMEOWNER NON RENEWALS.
AND PREMIUM INCREASES.
THE TOP LINE SHOWS THE COUNTIES
IN -- HI WILD FIRE RISK AREAS
JUST BETWEEN TWO THOUSAND
SEVENTEEN IN TWO THOUSAND
EIGHTEEN YOU CAN SEE THE NUMBER
OF COMPLAINTS THAT THEY GOT THAT
WENT OUT FROM. 1-009-420-0017 TO
HAD TO TWO HUNDRED SEVENTY SIX
IN TWO THOUSAND EIGHTEEN SO --
THOSE COMPLAINTS ARE STILL GOING
UP AND WE'RE STILL HEARING FROM
OUR COUNTIES THAT THEIR
CONSTITUENCIES ARE STILL GETTING
NON RENEWED AND CANCELLED -- IN
THEIR AREAS AND THEY'RE STILL
HEARING ABOUT THIS AND ONE THING
I WANT TO POINT OUT THAT WHILE
THE NARRATIVE THIS YEAR'S KIND
OF SHIFTED TO COMMUNITY
PROTECTION FROM WILDFIRES AND
SORT OF WHY DID THOSE DARN
COUNTIES BUILD IN THESE HIGH
WILD FIRE RISK AREAS IN THE WE
WE RIGHT.
WE'RE GETTING OUR FIT WE'RE
GETTING A LOT OF FISH SHAKEN OUT
US RIGHT NOW.
IN A LOT OF OUR COUNTIES THIS IS
A PROBLEM THAT HAS GROWN UP
AROUND THEM RIGHT A LOT OF THE
ESTABLISHED COMMUNITIES HAVE
BEEN THERE FOR DECADES AND A LOT
OF THOSE FOLKS LIVING THERE HAVE.
BEEN THERE FOR GENERATIONS SO.
DUE TO YOU KNOW FORCE MANAGEMENT
CLIMATE CHANGE AND AND THINGS
LIKE THAT THIS WILDFIRE PROBLEM.
HAS COME UP AROUND A LOT OF
THESE PEOPLE THAT HAVE HOMES IN
THESE AREAS AND AND THEY'VE BEEN
LIVING THERE WITH THEIR FAMILIES
FOR FOR DECADES.
AND A LOT OF THESE DEVILISH WE
COMMUNITIES ARE.
IN LOW INCOME AREAS UNDER AB
FIFTEEN FIFTY AS WELL SO WE'RE
NOT TALKING ABOUT.
YOU KNOW POSH HOMES ON NICE REAL
ESTATE IF YOU GO TO LAKE COUNTY
ALL YOU'LL SEE WHAT I'M TALKING
ABOUT YOU KNOW.
SO.
THESE ARE FOLKS THAT NEED
AFFORDABLE ACCESSIBLE INSURANCE
POLICIES FOR THEIR HOMES AND AND
ARE STRUGGLING WITH SOME OF
THESE ISSUES THAT HAVE ALREADY
BEEN DISCUSSED HERE TODAY -- SO
AVAILABILITY DOES NOT
NECESSARILY MEAN SUSTAINABLE AND
AND WE'VE TALKED ABOUT SOME OF
THE RATE INCREASE ISSUES ALREADY --
AND IT.
SO LET ME READ YOU AN EMAIL THAT
I GOT FROM ONE OF MY COUNTY SO
SAN LUIS OBISPO COUNTY AND MY
BOARD MEMBER SENT ME THIS IT
SAYS IT'S FROM ONE OF HIS
CONSTITUENTS.
JUST ONE EXAMPLE I DO NOT KNOW
IF THERE'S ANYTHING THAT YOU CAN
DO TO HELP BUT WE HAVE RECEIVED
NOTICE THAT OUR PROPERTY
INSURANCE HAS BEEN CANCELLED.
SO FAR MY AGENT HAS NOT BEEN
ABLE TO FIND A REPLACEMENT
COMPANY THEY HAVE NEVER BEEN TO
OUR PROPERTY TO SEE WHAT EVASIVE
MEASURES WE TAKE TO MAKE OUR
PLACE SECURE.
ALSO HOMEOWNERS WITH MORTGAGES
THAT DO NOT GET NEW INSURANCE
PLACE THEMSELVES IN A PLACE THAT
THE BANKS COULD FOR CLOTHES.
WELOVE IT HERE BUT LIKE OTHERS
WILL BE FORCED TO SELL AND
RELOCATE TO STATE THAT DOES NOT
HAVE THESE ISSUES.
IF YOU GET IF YOU GET A CHANCE
TO LOOK INTO THIS WE WOULD
APPRECIATE IT THANKS.
AND MANY OF OUR MEMBERS ARE
COMING TO US WITH THESE TYPES OF
OF REQUESTS FROM THEIR
CONSTITUENCIES.
AND SO WE'RE NOT TRYING TO FORCE
ANYTHING YOU KNOW WE'RE NOT
TRYING TO FORCE THE INDUSTRY
WE'VE BEEN TRYING TO WORK WITH
THEM.
FOR MONTHS NOW.
WE HAVE TRIED TO LOOK INTO THE
MODELS YOU KNOW THE FIRE LINE
MODEL THAT WAS MENTIONED IN THE
ROOM IN THE STAFF REPORT FOR
THIS HEARING.
LOOKS AT THINGS FROM A VERY SORT
OF LANDSCAPE SCALE RATHER THAN
WHAT THE COMMUNITIES ARE DOING
AND WE THINK THERE'S A LOT OF
ISSUES THERE.
A LOT OF OUR FOLKS THAT LIVE OUT
IN OUR COUNTIES ARE COMMUNITIES
ARE DOING VERY VERY GOOD WORK
AROUND THEIR HOMES TO PROTECT
THEM AND MAKE THEM MORE FIRE
RESISTANT DOING THEIR DEFENSIBLE
SPACE.
AND WE EVEN WORKED IN THE TASK
FORCE AND CAME UP WITH A REALLY
GOOD TERRORISTS PRODUCTION MODEL
WE WORKED WITH CAL FIRE FOR A
LONG TIME ON THAT OUR COUNTY IS
DEAD.
AND THAT KIND OF STALLED AND
DIDN'T GO ANYWHERE AND AND IT'S
A REALLY GOOD LIKE FIVE PAGE
RISK REDUCTION MODEL TIERED.
SO THAT HOMEOWNERS IF THEY MET
CERTAIN CRITERIA COULD PERHAPS
GET SOME DISCOUNTS ARE SOME
ASSURANCE THAT THEY WOULD BE NON
RENEWED.
AND THAT SORT OF STALLED IN KIND
OF SAD YOU KNOW IN A IN A POOL
SOMEWHERE IN THERE IT IS -- AND
IT IS SORT OF BUDGET IMPACTS
TOOK COUNTIES LOCAL GOVERNMENTS
IS KIND OF THE LAST THING I HEAR
ABOUT YOU KNOW LOSS FROM
PROPERTY TAXES THE FOLKS MOVE
AWAY OR CAN'T FIND ANYBODY TO
SELL THEIR HOMES TO OR THAT SORT
OF THING.
IT'S KIND OF THE LAST THING ON
OUR MEMBERSHIPS MIND IT'S WE
DON'T WANT OUR CONSTITUENTS TO
NOT HAVE INSURANCE WE DON'T WANT
THEM TO SUFFER LOSSES.
THAT THEY CAN'T BE COVERED FOR
IF I CAN OTHER CAMP FIRE BREAKS
OUT.
AND WE'VE SEEN SOME VERY
PERSONAL THINGS AND PERSONAL
IMPACTS ARE BUTTE COUNTY.
SUPERVISOR LOST HIS HOME IN THE
CAMP FIRE.
AND SO IT'S VERY PERSONAL THE
ASSN VERY PERSONAL TO OUR BOARD
MEMBER SO.
WE'RE HERE LOOKING FOR SOLUTIONS
WE WANT TO CONTINUE WORKING WITH
THE INSURANCE INDUSTRY ON
SOLUTIONS TO THIS PROBLEM
BECAUSE IT IS.
VERY PERSONAL TO OUR MEMBERSHIP
AND TO THEIR CONSTITUENCIES AND
WE'RE HOPING THAT AS WE GO
FORWARD.
WE CAN CONTINUE WORKING WITH
THEM AND WITH THE DEPARTMENT OF
INSURANCE TO TRY TO SORT OF SEE
IF WE CAN COALESCE AROUND SOME
SOLUTIONS.
MOVING AHEAD THANK YOU
[inaudible]
THANK [inaudible]
ANY QUESTIONS [inaudible]
MORE LIKE [inaudible]
BY. TO HAVE JOKES.
AND EXPLAIN.
I HAVE A FEW MINUTES BUT I AYE
BEFORE ASSAM.
SOMEONE ELSE TO COME UP I JUST
WANNA ADDRESS JOB SOMETHING THAT
YOU MENTIONED OUT YOU SAID.
LET'S JUST GET IN THAT THE FAIR
PLAN IS GROWING AND SO I WANT
YOU TO ADDRESS A PARTICULAR
QUESTION FROM THE GOVERNOR'S
REPORT THAT SAYS.
SHOULD INSURERS BE OBLIGATED TO
OFFER CONSUMERS WHO ARE L.
INELIGIBLE FOR HOMEOWNERS POLICY
THEIR DIFFERENCE IN CONDITIONS
POLICY OR A PREMISES LIABILITY
POLICY AS COMPLEMENTARY COVERAGE
FOR FOR PLAN.
FIRE POLICY CAN YOU ADDRESS THAT
QUESTION I CERTAINLY IF YOU GO
TO THE FAIR PLAN WEBSITE YOU
REALIZE FAIR PLAN HAS ALREADY
ADDRESSED THIS ISSUE BY STATURE
THE FAIR PLAN IS A FIRE ONLY
POLICY AND THAT WAS A POLICY
DECISION MADE BY THE LEGISLATURE
WHEN THE FAIR PLAN WAS.
EXCEPT AS SET UP -- THEY DO
OFFER A DIFFERENT WHAT IS CALLED
THE DIFFERENT CONDITIONS POLICY
I THINK THERE EIGHT OR NINE
COMPANIES THAT OFFER IT -- YOU
CAN EITHER GET IT THAT WAY OR
SURPLUS LINES COMPANIES ARE THE
COMPANIES WILL CALL WHAT'S
CALLED THE WRAPAROUND POLICY AND
THAT WILL PROVIDE THE OTHER
PROTECTIONS THAT.
THE TYPICAL HOMEOWNER'S POLICY
WOULD HAVE SO THE THAT PRODUCT
IS AVAILABLE.
THANK YOU CONTENT WILL THANK YOU
FOR THAT STATES IF I MAY USE
MENTIONED A FIVE PAGE REPORT A
YOU CAME UP WITH FOR RISK
ASSESSMENT I JUST WANNA MAKE
SURE IF YOU CAN.
MAKE SURE I GET IT I WOULD LIKE
TO SEE IT THANK YOU.
EITHER WITH ME I CAN GIVE THAT
TO YOU DIRECTLY AND THEN I'LL
SEND THE ELECTRONIC VERSION TO
HUGH LATER THANK YOU SO MUCH
TROUBLE TO BE THANK YOU SO MUCH
FOR BEING HERE AND TAKEN AT THIS
TIME THIS MORNING TO COME AND BE
WITH US.
REALLY APPRECIATE YOUR INSIGHT
AND DEAD THANK YOU AGAIN.
SO AT THIS POINT SINCE WE DO
HAVE A COUPLE OF MINUTES I WOULD
LIKE TO PASS TOOL IF HE CAN COME
UP I KNOW THAT.
YOU KNOW YOU HAD A LOT OF
INFORMATION TO SHARE AND I
THOUGHT WE WOULDN'T HAVE TIME
BUT CAN YOU ADDRESS PEACH TREE
MANY WERE SAYS THE NUMBERS OF
CONSUMER.
COMPLAINTS FOR HOMEOWNERS NON
RENEWALS AND PREMIUM INCREASES
ACTS I BELIEVE IT'S AN IMPORTANT
DISCUSSION THAT WE DIDN'T GET TO
HALF AND SELL.
PAGE TWENTY HAVE YOU CAN SHARE A
LITTLE BIT MORE INSIGHT ON ON
THIS PAGE IN PARTICULAR.
IT TO SIX IS POINT THANKS. FOR
POINTING IT OUT AND I'M HOPING
IT WAS HELPFUL.
WE HAVE HAD THIS INCREASE IN
COMPLAINTS ABOUT PREMIUMS GOING
UP WE ALWAYS GET SOME.
OR GETTING PEOPLE BEING NON
RENEWED.
OUR POINT HERE IS NOT ONLY IS
THAT INCREASING JUST GENERALLY
STATE RIGHT WHY'D BUT MOST MOST
OF THAT.
BOOK OF OF THOSE THAT INCREASE
IS COMING FROM A LIMITED NUMBER
OF COUNTIES.
NOW SO THEY ARE ARE SIERRA
FOOTHILLS IN THOSE COUNTY SAID
TO HAVE A LOT OF WE WE EXPOSURE --
WHILE STATEWIDE YOU MIGHT THINK
THIRD THERE ISN'T A CRISIS IF
YOU ARE IN ONE OF THOSE COUNTIES.
YOU MIGHT START TO BELIEVE THAT
THERE IS.
GIVEN IN OUR YOUR OWN EXPERIENCE --
ANNIE ONE HOMEOWNER MIGHT THINK
WE'LL.
IS A LOT HARDER THAN I THOUGHT
IT WASN'T AN ISSUE AT ALL WHEN I
MOVED HERE.
AND NOW ALL OF A SUDDEN I'M NON
RENEWED AND CAN'T CAN'T FIND
COVERAGE OR IN GETTING A PREMIUM
INCREASE.
DOUBLE AND TRIPLE OF WHAT I PAID
JUST A FEW YEARS AGO.
SO IT'S THE BULK OF THE INCREASE
IS COMING FROM.
A SMALL SUBSET OF THE STATE
RIGHT AT THE BOTTOM OF THERE'S
WE'RE GETTING.
HUGE INCREASE FROM 38% OF THE
STATE IS MAKING THE BULK OF THE
COMPLAINTS THAT'S BECAUSE THEY
ARE IN THAT MOVIE AREA
[inaudible]
AND THANK YOU ORTEZ WE HAVE UP
HERE ANY MEMBER LIKE TO ASK A
QUESTION SAYS THAT PERTAINS TO
IMAGES.
DISCUSSED.
NOW.
THANK YOU VERY MUCH FOR FOR
COMING UP IN ENSURING THAT WITH
AS WELL -- WE ACTUALLY DID GOOD
TIMING DESPITE THE FACT THAT
CHOI BELIEVED TO COLOR TIME AS
FROM IS FROM.
RIGHT MA'AM BUT WE DID GOOD
TIMING SO THAT'S GOOD YOU KNOW I
LIKE GORDON ALIKE EFFICIENCY
CELLS SO THANK YOU VERY MUCH FOR
BEING HERE AND AND SITTING WITH
US THIS MORNING -- NOW I WOULD
LIKE TO GIVE THE PUBLIC AN
OPPORTUNITY TO COME AND ASK
QUESTIONS ANYBODY WELCOME TO
COME UP.
PLEASE STATE YOUR NAME AND ASK A
QUESTION -- MAKE YOUR COMMENTS
THANK YOU PLEASE INTRODUCE
YOURSELF.
MADAM CHAIR -- JOHN NOR WOULD ON
BEHALF OF THE INDEPENDENT
INSURANCE AGENTS AND BROKERS OF
CALIFORNIA AND THE CALIFORNIA
INSURANCE WHOLESALERS
ASSOCIATION.
I I DID WANT TO MAKE JUST A FEW
COMMENTS BY -- SUNDAY AND MONDAY
WENT TO A CONVENTION FOR THE
INDEPENDENT INSURANCE AGENTS AND
DR NUMBER OF AGENTS AND BROKERS
I THOUGHT I WOULD SHARE SOME
ANECDOTAL INFORMATION ON THIS
TOPIC.
TO GLEAN FROM THAT -- I AGREE
WITH THE PROPOSITION THAT
OVERALL IN CALIFORNIA WE REALLY
WE DON'T HAVE A HOME MORTGAGE
MARKET CRISIS AT ALL.
BUT AS BROKERS TOLD ME IF YOU
LIVE IN THE IN THE FOOTHILLS ARE
IN THE MOUNTAINS OR ANYTHING
WITH A CANYON EXPOSURE.
OR YOU KNOW IN THE BRUSH HIGH
RISK AREAS THAT IS AN
UNPRECEDENTED MARKET RIGHT NOW
AND SO IT JUST INDIVIDUALS I
TALKED.
TO ONE ROKU TOLD ME THEN THIS
HERE FOOTHILLS HE SAYING
PREMIUM ARMS FOR HOMEOWNERS
INSURANCE AND IN THE FIVE TO
TWENTY THOUSAND DOLLAR A AREA
ANNUALLY THAT'S THAT'S HUGE.
YOU KNOW FROM THAT STANDPOINT
AGAIN THERE'S SOME VERY NICE
HOMES UP THERE AND YOU KNOW THAT
THAT MAKES A DIFFERENCE.
AS WELL -- A BROKER I TALKED TO
SAID THAT THEY RARELY EVER USE
THE FAIR PLAN BUT IN THIS CASE --
HE HAS.
HAS SUBMITTED THIRTY FOR PLANNED
REQUESTS JUST IN THE LAST MONTH
FOR OUR APPLICATIONS JUST IN THE
LAST MONTH -- WE'RE ALSO SEEING
PEOPLE TRYING TO DO THINGS TO
REDUCE OUR HOMEOWNER'S INSURANCE
ONE BROKER TOLD ME THIS IS
SAYING -- TEN THOUSAND UP TO
FIFTY THOUSAND DOLLAR DEDUCTIBLE
POLICIES IN HOMEOWNERS INSURANCE
THAT'S SOMETHING I THINK IS
PRETTY MUCH UNPRECEDENTED WE
HAVEN'T SEEN THAT FOR A LONG
TIME -- OTHER ONE OTHER BROKER
TOLD ME THAT.
USUALLY WHEN THE MARKET WITH A
MINUTE COMPANIES ARE WRITING YOU
CAN PLACE BUSINESS AND NOT NOT
ADMITTED AREA AND SHE SAID THAT
SHE'S GETTING TURN DOWNS FROM
THE NOT ADMITTED.
AREA BECAUSE COMPANIES LIKE
LEXINGTON IN SCOTTSDALE ARE
REACHING THEIR CAPACITY -- FOR
EXPOSURES IN THE FIRE AREAS AND
LASTLY I TALKED TO ONE INSURANCE
EXECUTIVE WHO BASICALLY SAID.
YOU KNOW WE'RE GONNA HAVE TO NON
RENEW POLICIES WE DON'T WANT TO
NON RENEW JUST BECAUSE WE CAN'T
FIND THE REINSURANCE FOR RIGHT
RIGHT NOW AND THAT'S RESTRICTING
OUR ABILITY TO WRITE I THINK PUT
THIS ALL COMES DOWN.
TO IS THAT YOU KNOW LIKE.
PROBABLY ANY OTHER INDUSTRY YOU
KNOW INSURANCE INDUSTRY LIKES
CERTAINTY AND THERE'S ALWAYS THE
RIGHT NOW WE'RE SEEING OVER THE
LAST FEW YEARS.
EVERY FIRE MAP THAT WAS BEEN
DONE BUT FOR INSURANCE COMPANY
Và AND DONE FOR CALIFORNIA.
THE UTILITIES ECCENTRIC BUT
PROVED TO BE WRONG -- SO THE IN
THE AREA OR WE'RE SEEING LOSSES
THEIR UNPRECEDENTED GOING FROM A
FEW HUNDRED MILLION DOLLARS TO
THE ABOVE TEN BILLION DOLLARS --
THAT'S A HUGE INCREASE THE
INSURANCE INDUSTRY WANTS TO SEE
CERTAINTY THEY WANT TO KNOW
WHAT'S GOING. TO HAPPEN BUT I
THINK WE ARE SITTING IN
CALIFORNIA IS THE WORLDWIDE
MARKET DOESN'T KNOW WHAT'S GOING
ON IN CALIFORNIA ONE IS GOING TO
STOP.
YEAH WOULD YOU KNOW IF THE
THINGS THAT WE CAN DO -- TO TO
AND WE ARE DEAL WITH THE VIRAL
LOAD AND THINGS LIKE THAT WILL
BE SUCCESSFUL HOW MUCH TIME WILL
TAKE X. ACTRESS SO I JUST
THOUGHT THOSE -- EDU DEL TWENTY
HOW SHOULD.
BE WOULD BE IMPORTANT TO YOUR A
CONSIDERATION.
THANK YOU THANK YOU FOR BEING
HERE.
YOU MAY PROCEED THANK YOU
MORNING CARA CROSS AND I'M
REPRESENTING TODAY INSURANCE
SERVICES OFFICE WHICH PROVIDES
THE FIRE LINE PRODUCT -- I
WANTED TO MAKE A COUPLE
OBSERVATIONS THIS MORNING.
I'M CONCERNED ABOUT THE
IMPLICATION THAT FIRE SCORES ARE
NOT GOOD INDICATORS.
ON WHEN IN FACT THE DEPARTMENT
OF INSURANCE HAS ALLOWED THE
FAIR PLAN TO USE FIRE SCORES AND
ALSO IS MISTER LARGER SAID.
THEY HAVE BEEN APPROVING --
RATES THAT WERE INSURERS HAVE
USED FIRE SCORES.
I'M FROM A COMPETITIVE
STANDPOINT INSURERS ARE ALWAYS
GOING TO USE THE TOOLS AT OUR
BEST AVAILABLE TO THEM.
BAR LINE IS A SCIENTIFICALLY AN
AXE HURLEY VERIFIED TOOL
RECOGNIZED THROUGHOUT THE UNITED
STATES AND CANADA AS A CRITICAL
TOOL FOR INSURERS TO MORE
ACCURATELY AND RESPONSIBLY
MANAGED EXPOSURE TO WILDFIRE.
THIS IS NECESSARY IN THE STATE
WITH THE NEW NORMAL -- FIRELIGHT
HAS BEEN AVAILABLE TO THE
INSURANCE INDUSTRY FOR OVER
FIFTEEN YEARS IT WAS DEVELOPED
IN CONJUNCTION WITH MULTIPLE
STAKEHOLDERS INCLUDING THE
INSURANCE INDUSTRY.
THE FIRE PROTECTION AND
SCIENTIFIC COMMUNITY UC BERKELEY
NASA AND THE DEPARTMENT OF
DEFENSE.
FROM AN INSURANCE STANDPOINT
FIRE SCORES PROVIDE THEM THE
ABILITY TO MEASURE THE TRUE
EXPOSURE PRESENTED BY WILD FIRE
THIS IS CRITICAL TO MAINTAIN.
RISK BASE PRICING AND
RESPONSIBLY MANAGING EXPOSURE.
IN ADDITION THE ABILITY TO MORE
ACCURATELY IDENTIFY WILD FIRE
EXPOSURES HIS HELP INSURERS WHO
BEFORE MAY HAVE BEEN HESITANT TO
ASSUME GREATER RISK IN CERTAIN
REGIONS.
EXPAND THEIR BOOKS THE BUSINESS
IN THESE HAZARDS.
ON THE MITIGATION FRONT TO GAIN
A BETTER UNDERSTANDING OF THE
EFFECTIVENESS OF INDIVIDUAL
MITIGATION EFFORTS WE ARE
ACTIVELY ENGAGING STAKEHOLDERS.
WE ARE WORKING WITH THE WESTERN
FIRE CHIEFS ASSOCIATION AND
LOCAL WILD FIRE EXPERTS AND
OTHER STAKEHOLDERS INCLUDING
NATIONALLY RECOGNIZED THE TEST
LAB TO EVALUATE VARIOUS
PREVENTION METHODOLOGIES.
SUCH AS FUEL REDUCTIONS BUILDING
HARDENING AND OTHER MITIGATION
EFFORTS.
AND THEIR EFFECTS OF THE DAMAGED
HUNDRED PATTERNS CREATED BY
WILDFIRES.
THE GOAL THESE EFFORTS IS TO
OBTAIN THE DATA NECESSARY TO
PROPERLY EVALUATE THESE MEASURES
FROM ACTUAL PERSPECTIVE.
THANK YOU.
THANK YOU VERY MUCH IS THERE
ANYONE ELSE I WOULD LIKE TO COME
UP AND MAKE A COMMENT TO ASK
QUESTIONS.
OKAY WITH THAT I WILL JUST TURN
IT OVER TWENTY MEMBERS LAST
COMMENTS.
THANK YOU MISTER MOORE LIKE
WHO'S BEEN SUCH A TROOPER HAS
BEEN BY MY SIDE THE ENTIRE TIME
I TRULY APPRECIATE THAT.
AND DEBT THANK YOU AND THIS IS
REALLY OUR INFORMATIVE AND AS I
SHOWED EARLIER OFF.
WE'RE NOW TASK -- IN THE SENATE
SELECT COMMITTEE ON WILDFIRES TO
TO COME UP WITH A VIABLE
SOLUTION SO CLEARLY THIS IS
HELPFUL IN TERMS OF INFORMING
OUR DECISION MOVING FORWARD AND
SO I REALLY APPRECIATE ALL THE
TIME THAT YOU SPEND HERE SHARING
AND TA.
AND EVERYONE WE BEHAVING WELL
ALSO THANK YOU THAT'S A JOKE BUT
THANK YOU AND ACT WITH THAT -- I
WILL ADJOURN THE MEETING AND
WE'LL SEE YOU SOON THANK YOU