WELCOME EVERYONE WE ARE GOING
TO GET STARTED. THE SENATE
INSURANCE COMMITTEE HEARING OF
FEBRUARY TWELVE WILL COME TO
ORDER. WE'RE JUST GONNA HAVE A
COUPLE MEMBERS COMING IN AND
OUT AND AS A CALM ALL JUST MAKE
SURE WE GIVEN THE SAME RESPECT.
SO THANK YOU EVERYONE FOR
JOINING JOINING US HERE TODAY-
THIS HEARING ON WILDFIRES IN
HOMEOWNERS INSURANCE WILL FOCUS
ON AVAILABILITY AND HIGH RISK
COMMUNITIES LAST MAY THIS
COMMITTEE HELD A HEARING
COVERING THE AFFORDABILITY AND
AVAILABILITY OF INSURANCE IN
THESE HIGH RISK AREAS. THE
INFORMATION PRESENTED AT THE
HEARING SUGGESTED SOME AREAS
WERE SUFFERING FROM NON
RENEWALS BUT THE INSURANCE FOR
PICKING UP SOME OF THE CONSUMER
SINCE THAT HEARING THE
DEPARTMENT OF INSURANCE RECENT
UPDATE A REPORT. ON THE NUMBER
OF NON RENEWALS AND MEALS
THROUGH THE END OF TWENTY
EIGHTEEN ALTHOUGH THERE WERE
SOME INCREASE ON FROM THE PRIOR
YEAR OF THESE NUMBERS AND NOT
SHOW ANY SAID SHIFT OR
SIGNIFICANT IMPACT TO THE
MARKET. HOWEVER THIS COMMITTEE
HAS BEEN TRACKING UP TO DATE
AND WOMAN FROM THE FAIR PLAN.
THE SEARCH ENROLLMENT SUGGEST A
MORE ALARMING TREND. POLICY
HOLDERS FOR NON RENEWED APPEAR
TO BE UNABLE TO FIND
REPLACEMENT COVERAGE AND SOME
CONSUMERS MAY NOT FIND COVERAGE
AT ALL. LAST YEAR THE SENATE
PRO TEM. ESTABLISHED IN ENERGY
INSURANCE STABILITY WORKING
GROUP TO STUDY POTENTIAL
SOLUTIONS FOR STABILIZING THE
MARKET. MEMBERS OF THE WORKING
GROUP ALL AGREED THAT
AVAILABILITY AND AFFORDABILITY
IS OF THE UTMOST IMPORTANCE AND
CONCERN. THE COMMITTEE PLANS TO
HAVE ANOTHER HEARING THAT
FOCUSES SOLELY ON
AFFORDABILITY. AND THE FAIR
PLAN AS SOON AS NEXT MONTH. THE
FOCUS OF THIS HEARING ALONE IS
AVAILABILITY AVAILABILITY AND
WE WILL SPECIFICALLY FOCUS ON
STRATEGIES FOR ADDRESSING THE
NON RENEWALS. A FEW SOLUTIONS
HAVE BEEN OFFERED BUT OFTEN
ABOUT POTENTIAL UNINTENDED
CONSEQUENCES. AND NEGATIVE.
CONSEQUENCES IN ADDRESSING THIS
PROBLEM IT CAN BE REALLY TRICKY
SO WE WANT TO MAKE SURE THAT WE
MOVE FORWARD. REALLY MINDFUL
THAT WE DON'T WANT UNINTENDED
CONSEQUENCES AND CONSUMER
SUFFERING FOR THE CONSEQUENCES.
THE PURPOSE OF THIS HEARING
TODAY IS TO CONSIDER AND
EVALUATE ALL THE FACTORS
INVOLVING. A SECURE RELIABLE
INSURANCE MARKET. THEY INTEND
IS TO PROVIDE A FORUM FOR
THOUGHTFUL CONSIDERATION OF OUR
OPTIONS. AND TODAY WE WILL
FOCUS ON TWO PANELS. BOTH
REPRESENT THEIR IDEAS ON HOW
BEST TO ENCOURAGE THE
AVAILABILITY OF THE INSURANCE
COVERAGE IN THESE HIGH RISK
AREAS THE FIRST PANEL INCLUDES
THE DEPARTMENT OF INSURANCE AND
THE PERSONAL INSURANCE
FEDERATION OF CALIFORNIA. THE
SECOND PANEL INCLUDES
REPRESENTATIVES FROM THE
REINSURANCE AND CATASTROPHIC
MODELING INDUSTRY OVER THE LAST
SEVERAL YEARS REINSURANCE AND
CATASTROPHIC MODELING HAVE BEEN
FREQUENTLY DISCUSSED BUT WE
HAVE YET TO HEAR FROM THEM. AND
WE WILL TO TODAY. I BASS THESE
WITNESSES TO JOIN US SO THAT WE
MAY HAVE A DIRECT CONVERSATION
WITH THEM ABOUT THE ROLE IN THE
INSURANCE MARKET PLACE AND IF
ANY MEMBERS WANT TO MAKE ANY
COMMENTS AT THIS TIME YOU MAY.
NO SO I WILL ASK OUR FIRST
PANELIST TO COME UP. FIRST
POWNAL ARE WILL BE FOCUSED ON
IMPROVING AXIS IN THE VOLUNTARY
MARKET WE HAVE MICHAEL MARTINEZ
SENIOR DEPUTY COMMISSIONER AT
THE DEPARTMENT OF INSURANCE ALL
WHO WILL BE JOINED BY JOE LOUD
SURE THE DPARTMENT EXPERT. IS
HE HERE WITH YOU. AND REX
FRAZIER THE PRESIDENT OF THE
PERSONAL INSURANCE FEDERATION
OF CALIFORNIA WHO WILL ALSO
HAVE SALMON TAYLOR JOIN HIM
TODAY TO HELP ANSWER ANY
QUESTIONS WE MAY HAVE. THANK
YOU ALL OF YOU FOR BEING HERE
TODAY SO TODAY WE JUST WANT TO
HEAR SOME OF YOUR IDEAS ON
SOLVING THE PROBLEM OF NOT
REVEALS IN FIRE PRONE AREAS AND
WE'RE GONNA START TODAY WITH.
MISTER MARTINEZ FROM THE
INSURANCE DEPARTMENT YOU MAY
PROCEED. ALRIGHT GOOD AFTERNOON
THANK YOU VERY MUCH CHAIR
RUBIO AND- MEMBERS OF THE
SENATE INSURANCE COMMITTEE AND-
THANK YOU FOR ALLOWING ME TO BE
HERE DID MICHAEL MARTINEZ
SENIOR DEPUTY COMMISSIONER
LEGISLATIVE DIRECTOR. OF THE
CALIFORNIA DEPARMENT OF
INSURANCE TERM BEHALF OF
INSURANCE COMMISSIONER RICARDO
LARA- UNFORTUNATELY ABLE TO BE
HERE TODAY BECAUSE OF A
PREVIOUSLY SCHEDULED. A MEETING
OF THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS AND A I
SEE OUT OF STATE I AM A JOINT
HERE WITH THE JOINED HERE TODAY
WITH TO ALLOW TEACHER WHO IS.
SPECIAL ADVISER AT THE
DEPARTMENT OF INSURANCE AND HE
ACTUALLY WAS A FORMER CHIEF
DEPUTY COMMISSIONER- UNDER THE
PREVIOUS COMMISSIONER. AND AS A
VERY LONG STANDING. A HISTORY
WITH THE DEPARTMENT OF
INSURANCE. SO CAN THANK YOU FOR
GIVING US THE OPPORTUNITY TO BE
HERE TODAY I WAS ASKED BY
COMMITTEE STAFF TO BRIEFLY
UPDATE YOU ON THE CHALLENGES
BEING FACED BY CONSUMERS IN THE
HOMEOWNERS INSURANCE MARKET IN
ADDITION TO THE DEPARTMENTS AND
THE INITIAL. I LEVEL FOUGHT. ON
HOW TO IMPROVE CONSUMER ACCESS
TO INSURANCE MARKET PLACE.
INCLUDING ESPECIALLY IN THE
MOVIE THE WILDLAND URBAN
INTERFACE REGIONS OF OUR STATE.
BEFORE BEGIN HOWEVER I ALSO
WANTED TO I'D BE REMISS IF I
DIDN'T BRIEFLY COMMENT ON THE
SENATE DEMOCRATIC CAUCUS
AUCTION. ACTION PLAN JUST
PUBLICLY UNVEILED THIS MORNING
I DID WANT TO SAY THAT
COMMISSIONER LANA IS VERY
EXCITED. BY THIS PLAN AND LOOKS
FORWARD TO PARTNERING WITH YOU.
CHAIR RUBIO AND SENATE
PRESIDENT PRO TEM TONI ATKINS
PLUS ALL ON THIS CRITICAL ISSUE.
OF INSURANCE AVAILABILITY FOR
HOMEOWNERS AND FINDING A
SOLUTION TO ADDRESS INCREASING
ON RENEWALS IN EVERY AREA OF
OUR STATE IN ADDITION TO
ENGAGING ON OTHER OF THE PLAN
ELEMENT. LEADERSHIP IN TAKING
AMBITIOUS STEPS TO ADDRESS
INSURANCE NON RENEWALS EXPAND
ACCESS TO HOMEOWNERS INSURANCE.
KEEP INDUSTRY ACCOUNTABLE
ENGAGE OUR LOCAL MUNICIPALITIES
AND PROTECT OUR MOST VULNERABLE
COMMUNITIES ARE ALL VERY
IMPORTANT GOALS TO COMMISSIONER
LOT AS WELL. IN THE DEPARTMENT
ANDERSON LOOK FORWARD TO
PARTNERING WITH ALL OF YOU. ON
SOLUTIONS THAT KEEP
CALIFORNIANS SAY FROM THE
DOUBLE THREATS OF WILDFIRES AND
CLIMATE CHANGE OR WANTED TO.
HELP THAT GIVEN THAT WAS JUST
FOR RECENT NEWS FROM THIS
MORNING. SO TODAY THERE ARE
TENS OF THOUSANDS OF
CALIFORNIANS AS WE KNOW WHO ARE
DEALING WITH AN INSURANCE
CRISIS MANY ARE FACING ABRUPT.
SUBSTANTIAL INCREASES IN
INSURANCE PREMIUMS ALL OTHERS
CANNOT FIND IT IN MENTORED
ENSURE THAT WILL RIGHT THERE
ARE COVERAGE. FOR THOSE THAT
CANNOT FIND IN COVERAGE THERE
IS ONLY THE FAIR PLAN THE
INSURER OF LAST RESORT. WHICH
INCLUDES NO COVERAGE FOR WATER
DAMAGE NO COVERAGE FOR
LIABILITY AND NO COVERAGE FOR
INCIDENTAL WORKERS COMPENSATION
EXPOSURES. WE HAVE HEARD
DIRECTLY FROM MANY OF YOUR
CONSTITUENTS PLEASE KNOW THAT
THE DEPARTMENT HAS RECEIVED.
DOUBLE THE CONSUMER COMPLAINTS
ABOUT NON RENEWALS IN TWENTY
NINETEEN AND TWENTY EIGHTEEN.
FROM CONSUMERS LOCATED. ZIP
CODES DESIGNATED BY CAL FIRE AS
HAVING THE GREATEST RISK OF
WILDFIRE. COMMISSIONER LOT OF
HAS ALSO BEEN HOLDING TOWN
HALLS ROUND TABLES AND
WORKSHOPS WITH HOMEOWNERS
BUSINESS OWNERS LOCAL
GOVERNMENT OFFICIALS AND STATE
LEGISLATORS INCLUDING SEVERAL
OF YOU AND YOUR COLLEAGUES HERE
IN THE STATE SENATE. THROUGHOUT
THE STATE. IN FACT SINCE LAST
SPRING COMMISSIONER LARA AND
DEPARTMENT STAFF HAD MET WITH
THOUSANDS OF CALIFORNIANS UP
AND DOWN ACROSS THE STATE. AT
TWENTY TOWN HALLS AND SEVENTEEN
COUNTIES AND HOW TWENTY SIX
MORE TOWN HALLS AND MANY OTHER
COUNTIES PLANNED- THIS NEXT
TOWN FOR MONTHS AGAIN WITH
SEVERAL OF YOU. HAVE I WOULD
SAY IF YOU HAVEN'T HAD OR HAVE
THE OPPORTUNITY TO. THE TOWN
HALL IN YOUR DISTRICT WITH
COMMISSIONER LOT OF PLEASE DO.
LET ME KNOW AND WE'D BE MORE
THAN HAPPY AND WILLING TO. I
ALSO HAVE MY STAFF HAVE A HELL
OF A MAN SHOULD BE REACHING TO
YOUR DISTRICT OFFICE STAFF. TO
SET ONE UP ONE UP IF ONE HASN'T
BECAUSE WE DO WANT TO ENSURE
THAT- CERTAINLY MEMBERS OF THIS
COMMITTEE. HAVE THAT TO HAVE
THAT OPPORTUNITY. THE CLEAR
INDICATIONS FOR TOWN HALLS ARE
SOBERING. AND I MEAN I MEAN
YOU'RE YOU'RE YOU'RE SHARING IT
IT'S JUST THOUGHT SENIORS
LIVING ON FIXED INCOMES TRYING
TO GET BY THE PREMIUM INCREASES
MAKING IT VERY HARD. THE IMPACT
HOME VALUES TAX REVENUES I MEAN
WE'RE HEARING ALL OF THIS HOMES
FALLING OUT OF ESCROW. BECAUSE
PROSPECTIVE HOME BUYERS ARE
FINDING INSURANCE COVERAGE TO
BE COST PROHIBITIVE. AND WE'RE
HEARING ALL OF THIS OUT THESE
TOWN HALLS AND WE CONTINUE TO
AND IT'S SOMETHING THAT- THAT
I'M SURE ALL OF YOU HAVE AS
WELL SO FOR THESE HOMEOWNERS
THE- UPSHIFT INSURANCE OF THE-
AVAILABILITY IS THE MAJOR
FINANCIAL DILEMMA. AND THERE
CONTINUES TO BE VERY HARD AND
DIFFICULT CLEAR PATHWAY OUT. SO
WHAT ARE SOME COMPREHENSIVE
SOLUTIONS. HELP IMPROVE ACCESS
TO THE STATE'S INSURANCE MARKET
PLACE. FIRST OF ALL WE PRESS
THE PAUSE BUTTON. AS YOU KNOW
SB SENATE BILL EIGHT TWENTY
FOUR THAT WAS AUTHORED BY THEN
SENATOR RICARDO LARA THOSE
CHAPTER IN TWENTY EIGHTEEN WAS
IMPLEMENTED FOR THE FIRST TIME
LAST DECEMBER. BY THE
DEPARTMENT IN PARTNERSHIP WITH
ADMINISTRATION SPECIFICALLY
CALLOW YES AND CAL FIRE AND IS
CURRENTLY PROTECTING OVER ONE
MILLION HOMEOWNERS. INTO ONE
HUNDRED AND SEVENTY SIX THE
CODES ACROSS THE STATE FROM NON
RENEWAL FOR AN ENTIRE YEAR.
MISTER LOTT HAS ALSO ASKED
INSURANCE INDUSTRY TO
VOLUNTARILY EXTEND THIS
PROTECTION TO HAUL ALL
HOMEOWNERS STATEWIDE WELL WE
ALL COLLECTIVELY WORK TOGETHER
ON HOW BEST TO MOVE FORWARD.
OBVIOUSLY AS WE ALL KNOW THIS
WHEN YOU'RE FIX IS REALLY IT'S
A PAUSE IT'S A POSITIVE
TEMPORARY FIX NOT A PERMANENT
SOLUTION AND THE GOAL HERE WAS
INTENDED TO WE BELIEVE CALM THE
MARKET TO ALLOW TIME FOR THE
GOVERNOR. INSURANCE
COMMISSIONER AND DEPARTMENT
LEGISLATORS CONSUMERS INDUSTRY
AND COMMUNITIES TO DEVELOP
LASTING SOLUTIONS AT LEAST SO
WE DO HAVE THIS TEMPORARY-
AGAIN POSSIBLE IN BUTTON IN
PLACE. SECOND INSURANCE RATES
HAVE BEEN INCREASING IN
RESPONSE TO THE RECENT
DESTRUCTIVE WILDFIRES IN OUR
STATE. THE DEPARTMENT HAS
APPROVED TWO HUNDRED AND TEN.
HOMEOWNERS RATE INCREASES FROM
TWO THOUSAND SIX TO TWENTY
NINETEEN. WITH MORE ON THE
HORIZON. THAT MEANS MANY
INSURERS HAVE ALREADY BEEN INTO
THE DEPARTMENT SEEKING MULTIPLE
RATE INCREASES. AND IT WILL BE
TO THAT JUST. A IT'S A IT'S A
pTHAT THAT WE HAVE HAD AGAIN
THESE MULTIPLE RATE INCREASES
INTO THE DEPARTMENT. AND WE
BELIEVE CONTRAST TO SOME
SUGGESTIONS MADE BY SOME IN THE
INDUSTRY THAT THE DEPARTMENT.
HAS NOT BEEN ADEQUATELY
APPROVING RATE INCREASES MADE
BY INSURERS. WHEN ENSURE CAN
TAKE CLEARLY DEMONSTRATE THAT A
FILED RATES. IS NOT EXCESSIVE.
IN ADEQUATE UNFAIRLY
DISCRIMINATORY THE DEPARTMENT
HAS APPROVED THE INCREASE.
UNFORTUNATELY THIS ALREADY
MEANT AND DOES MAIN DOUBLE
DIGIT AND EVEN TRIPLE DIGIT
INCREASES FROM ANY POLICY
HOLDERS AND HIGH RISK LOCATIONS.
I WANTED ALSO GIVEN THAT THE
HEARING SUBSEQUENT PANEL- WOULD
BE TALKING ABOUT REINSURANCE
INVOLVED FOR WRIST MODELS I DID
WANNA SEE ALSO COUPLE ITEMS A
COUPLE REMARKS ON THOSE TWO
ITEMS. DATA INSURERS ARE
PREVIOUSLY ARGUED AGAINST THE
DEPARTMENT'S REFUSAL TO ALLOW
THEIR COSTS FOR INSURANCE TO BE
INCLUDED IN AND INSURERS RATES
ASSESSMENT WE DO HAVE CONCERNS
WITH DIRECTLY ADDING
REINSURANCE COSTS TO RAISING
INCLUDING ALLOWING HOLE
UNREGULATED MARKET DRIVEN RATES
INTO THE PRIOR APPROVAL PROCESS
CAN UNDERMINE RATE REGULATION
PROP ONE OF THREE IS MANDATED
PRIOR APPROVAL OF TRANSPARENT
RATES. AS WELL AS UNDERMINE OUR
CONSUMER PROTECTIONS FROM
EXCESSIVE RATES WE DO FEEL THAT
RE INSURANCE COVERAGE IS NOT A
STANDARDIZED LONG ANSWERS AND
CAN ACTUALLY COVER AN ENTIRE
STATE OR MULTIPLE STATES AND
IT'S REALLY HARD TO BE ABLE TO
REALLY DETERMINE OKAY WHAT'S
FOR CALIFORNIA WHAT'S IN THIS
PARTICULAR WILL BE WHAT'S THE
COST FOR INSURANCE IN SPECIFICS
PARTS OF THE STATE VERSUS THIS
BROAD SWATH. THAT CAN BE TAKEN.
THUS WE BELIEVE COMPLICATING
EFFORTS TO OVERSEE THE TRUE
ACTUAL COST INVOLVED FOR STATES
AS DIVERSE AND VARIED AS AS
CALIFORNIA. INSURERS WOULD ALSO
LIKE TO USE CATASTROPHIC
CATASTROPHE RISK MODELS AND THE
RATE MAKING PROCESS TO PROTECT
THEIR CATASTROPHE LOSSES FOR
THE COMING POLICY PERIOD RATHER
THAN THE CURRENTLY USE. CAT
LOADS. OUR MODELS ARE GENERALLY
PROPRIETARY PRODUCTS LACKING
ANY TRANSPARENCY TO THE
CONSUMER PUBLIC LOCAL
GOVERNMENTS REGULATE TORE. AND
THE PREDICTIVE ABILITY HAS
LIMITATIONS AND AS THE COMEDIAN
ALICE'S INDICATED STILL IN ITS
EARLY ADOLESCENCE. SOLELY
ALLOWING INSURERS TO CHARGE
EVEN MORE FOR INSURANCE IS NOT
GOING TO MAKE THE INSURANCE
MARKET PLACE. A SOLELY BETTER.
ESPECIALLY SINCE NO INSURERS TO
THE DEPARTMENTS KNOWLEDGE TO
DATE. HAVE GUARANTEED THEY
WOULD KEEP OR INCREASE THEIR
HIGHER WILD FIRE EXPOSURE
BUSINESS ESPECIALLY WHEN IN THE
MOVIE. EVEN IF THEY COULD
INCLUDE THE REINSURANCE COSTS
ENTIRELY AND RISK MODEL
PROJECTIONS AND THE RATES. SO
THAT THAT IS AN IMPORTANT
CONSIDERATION THAT THE
DEPARTMENT BELIEVES. SHOULD BE
A CONSIDERED AS WE MOVE FORWARD
IN THIS POLICY DISCUSSION.
PLEASE KNOW THAT WE ARE NOT
BEYOND. CONSIDERING OPTIONS
OKAY I MEAN THIS IS SOMETHING
THAT'S PART OF THE AS THIS
POLICY THE DISCUSSION MOVES
FORWARD BUT I DO WANT TO SAY
THAT AS WITH ALL POLICY DEBATES
ON ALL ISSUES SHOULD BE ON THE
TABLE. AND HOW ARE WE DO ARGUE
THAT CONSISTENCY TRANSPARENCY
FAIRNESS AND REGULATOR
OVERSIGHT SHOULD BE TANTAMOUNT
TO CONSUMERS AND POLICYMAKERS.
BACK TO THE CONFERENCE OF
SOLUTIONS. BUT I DO WANT TO
JUST DO THAT PLAGUE OF. THIRD
THE DEPARTMENT PLEASE WE NEED
TO MODERNIZE THE INSURANCE
SAFETY NET KNOWN AS THE FAIR
PLAN ARE CALIFORNIA'S INSURER
OF LAST RESORT. SO AS MANY
PEOPLE KNOW THE FAIR PLAN IS
BECOMING THE ONLY OPTION FOR
HOMEOWNERS BECAUSE INSURANCE
COMPANIES WILL NOT WRITE. THEM
A POLICY AGAIN SPECIAL IN THE
MOVIE BECAUSE WE KNOW A
COMMISSIONER LOT ON A NOVEMBER
FOURTEENTH TWENTY NINETEEN HE
ORDERED THE FAIR PLAN TO OFFER
COMPREHENSIVE INSURANCE POLICY
OPTION TO IN ADDITION TO ITS
FIRE ONLY POLICY. INCREASED ITS
COVERS ON THAT ALLOW PAYMENTS
BY CREDIT CARD IN MONTHLY. WE
BELIEVE EVERY INSURANCE COMPANY
DOES CURRENTLY OFFER TODAY. AND
THE FAIR PLAN IS OBJECTING TO
THIS PROPOSED ORDER AND IS
CURRENTLY WE THE DEPARTMENT
ISN'T PENDING LITIGATION ON
THIS ISSUE- BUT ALL THAT BEING
SAID WE DO BELIEVE THE CHANGES
ARE LONG OVERDUE FOR CONSUMERS.
LASTLY LEASE FOR TODAY FOR THE
CONVERSATION. CALIFORNIA
CONSUMERS. A CLEAR PATH TO
INSURANCE COVER COVERAGE AND WE
BELIEVE THIS CAN BE CONSIDERED
AND SHOULD BE CONSIDERED IN
THREE WAYS. FIRST THE STATE
NEEDS A CLEAR CONSISTENT
STATEWIDE MITIGATION STANDARD
TO FOCUS THE EFFORTS OF
HOMEOWNERS AND COMMUNITIES
TOWARDS HAVING. AND MAINTAINING
HEART AND EXISTING HOMES. AND
HEART AND COMMUNITIES SECONDLY
A STRUCTURAL SYSTEM FOR
VERIFYING WHO MEETS THE
STANDARDS SO SOMEONE ACTUALLY
TO VERIFY IS THIS HOME IS THIS
COMMITTEE MEETING THAT STANDARD.
THIRDLY A AN INCENTIVE AN AMPLE
TIME FOR HOMEOWNERS IN
COMMUNITIES TO MEET THE
STANDARD. ALL OF THAT WRAPPED
IN WHICH WE BELIEVE WOULD HELP
AND ENSURE AND HOMEOWNERS
MEETING A CLEAR COMMITMENT BY
INSURERS TO WRITE INSURANCE
COVERAGE FOR HOMES THAT MEET
THE STANDARD. AND WE BELIEVE US
PROVIDING STRONG INCENTIVE TO
REDUCE WILD FIRE RISK BECAUSE
AGAIN I UNDERSCORE INCREASING
RATES WHICH AGAIN IS BY AND
LARGE BEING DONE AT THE
DEPARTMENT- IN ITS CURRENT
PROCESS AND NON RENEWING POLICY
HOLDERS WHICH UNFORTUNATELY IS
HAPPENING IN HIGH RISK AREAS.
OF THE STATE CANNOT BE THE ONLY
ANSWER. AND WE'VE SEEN SIMILAR
ELEMENTS SUCH AS THIS BEFORE.
IT HAS BEEN RECOMMENDED TO THE
ADMINISTRATION TO THE
DEPARTMENT TO THE STATE
LEGISLATURE WRISTS WE'VE SEEN
FOR EXAMPLE THE STATE WHICH
TREE METALLIC TASK FORCE WHICH
MANY OF US HAVE BEEN INVOLVED
WITH WHICH CREATED WILD FIRE
MITIGATION TEARS FOR HOMES IN
THE WE SAW LAST YEAR THE SENATE
BILL. NINE A ONE COMMISSION
WHICH RECOMMENDED ESTABLISHING
HOME BUYER RISK REDUCTION AND
COMMUNITY REST A REDUCTION
STANDARDS WITH INPUT FROM
INSURERS AND STAKEHOLDERS THAT
WOULD REQUIRE INSURERS TO WRITE
INSURANCE FOR HOMEOWNER AND
COMMUNITY BOTH MEET STANDARDS.
AND THEN WE SAW LAST YEAR WITH
THE LEGISLATURE PASSING A. B.
THIRTY EIGHT WHICH CREATED THE
STATE WIDE- FINANCIAL MECHANISM
FOR FUNDING HOME ARD IN. THE
LEGISLATURE AND THE GOVERNOR
SIGNED LAST YEAR SENATE BILL
ONE NINE ZERO BY SENATOR DODD
WHICH DIRECTED THE FIRE THE
STATE FIRE MARSHAL TO DEVELOP A
MODEL DEFENSIBLE SPACE LAW FOR
LOCAL COMMUNITIES. AND THEN-
GOVERNOR PROPOSING IN THIS
BUDGET A ONE HUNDRED MILLION
DOLLARS FOR. HOME HARDENING.
WHICH THE COMMISSIONERS. AS
WELL AS CONTINUED BUDGET- OF
FUNDING FOR. AND SIGNIFICANT
RESOURCES FOR PRE WILDFIRE
FORCE MANAGEMENT AND WILD FIRE
RESPONSE TO. JUST BEING ABLE TO
PROVIDE THAT THAT BACKDROP OF
IMPORTANT. ISSUES AND POLICY-
AND BUDGET RECOMMENDATIONS AND
AS WELL AS THROUGH ENACTED IN
CHAPTER. BILLS AND BUDGET
PROPOSALS THAT HAVE- MOVE
FORWARD TO LATER IN PART IN
GROUNDWORK FOR THE POLICY- WORK
IN THIS AREA. AND SO I CLOSE
WITH JUST SAYING THAT. AS A
SAID BEFORE AND THE OPENING. IS
AT COMMISSIONER LADA AND THE
DEPARTMENT WE DO LOOK FORWARD
TO PARTNER AND WE DO BELIEVE
THAT THIS YEAR. REALLY THERE IS
A LOT OF A LOT OF POTENTIAL FOR
THIS YEAR TO COME TOGETHER. AND
FIND MEANINGFUL AND LASTING
SOLUTIONS FOR THE INSURANCE
MARKET PLACE. AS WELL AS
INSURING CONSUMERS ARE
PROTECTED AND HAVE ACCESS TO
AFFORDABLE AND AVAILABLE
INSURANCE. THANK YOU. WE OFFER
QUESTIONS UNTIL WE'RE DONE WITH
THE PANEL YOU MAY PROCEED. I'M
SHARON MEMBERS MY NAME'S REX
FRAZIER AND PRESIDENT THE
PERSONAL INSURANCE FEDERATION
OF CALIFORNIA. WITH MY
COLLEAGUES HERE IN TAYLOR. I
THANK YOU FOR THE OPPORTUNITY
TO TESTIFY TODAY AND BEFORE I
BEGIN PLEASE ALLOW ME TO
COMPLIMENT THE COMMITTEE STAFF
FOR PREPARING SUCH A THOROUGH
AND THOUGHTFUL BACKGROUND
REPORT. WELL HOMEOWNERS
INSURANCE IS BROADLY AVAILABLE
STATEWIDE THE RESIDENTS OF
SEVERAL COUNTIES POSSIBLY
UPWARDS OF TEN TO TWELVE. OF
THE CALIFORNIA OF CALIFORNIA'S
FIFTY EIGHT COUNTIES HAVE
EXPERIENCED OR CONTINUE TO
EXPERIENCE THE ANXIETY OF BEING
UNABLE TO OBTAIN A POLICY FROM
THE REGULAR OR VOLUNTARY
MARKET. BY THIS REFER I REFER
TO A FULLY REGULATED INSURANCE
COMPANY THAT VOLUNTARILY OFFERS
A NEW OR RENEW A POLICY. THE
PERCENTAGE OF RESIDENTS IN HIGH
RISK AREAS UNABLE TO FIND A
VOLUNTARY MARKET SOLUTION
REMAINS LOW THAT IS LITTLE
COMFORT TEACH RESIDENTS FACING
THIS PROBLEM. FOR THOSE UNABLE
TO FIND A VOLUNTARY MARKET
POLICY THERE ARE TWO TEMPORARY
OPTIONS THAT ASSURE
AVAILABILITY UNTIL THE MARKET
REBOUNDS. THE SURPLUS LINE
MARKET IN THE INSURANCE
INDUSTRY BACKED CALIFORNIA FAIR
PLAYING. THE SURPLUS LINE
MARKET WILL ALWAYS BE MORE
EXPENSIVE. THEY ON THE REGULAR
MARKET IT'S PRICES ARE NOT
STATE CONTROLLED BUT SURPLUS
LINE INSURERS CAN ENTER THE
MARKET QUICKLY WHEN THE
VOLUNTARY MARKET INSTRUCTS. THE
FAIR PLAN LIKEWISE IS ALWAYS
MORE EXPENSIVE THAN THE
VOLUNTARY MARKET BECAUSE IT IS
A HIGH RISK POOL THAT SUFFERS
FROM ADVERSE SELECTION. IT IS
ALSO A SMALL OPERATION CANNOT
ACHIEVE THE ECONOMY OF SCALE
COST SAVINGS THAT THE LARGER
VOLUNTARY MARKET. INSURERS ARE
ABLE TO DO. IN GENERAL THE COST
OF JUST THE FAIR PLANS FIRE
ONLY INSURANCE POLICY. WILL BE
MORE EXPENSIVE THAN A VOLUNTARY
MARKET INSURERS PRICE FOR THE
ENTIRE HOMEOWNERS INSURANCE
POLICY. WHICH INCLUDES FIRE
BOTH ONE OFTEN CATASTROPHIC
FIRE WATER LOSSES LIABILITY
CLAIMS LIKE. LIKE A SLIP AND
FALL IN FACT. IN NO RESPONSIBLE
LONG TERM SOLUTION TO A
VOLUNTARY MARKET DISRUPTION
WILL RELY UPON EITHER THE NON
ADMITTED MARKET OR THE FAIR
PLAN. A LONG TERM SOLUTION FOR
HIGH RISK AREAS MUST INVOLVE
RESTORATION OF THE VOLUNTARY
MARKET. WHICH REQUIRES A
THOUGHTFUL BALANCING OF
UNDERWRITING RATING AND CLAIMS.
THE COMMITTEE BACKGROUND
COVERED WELL THE COMPLICATED
PUSH AND PULL THAT THIS
INVOLVES. RESTRICTING ONE OF
THESE FACTORS WILL LEAD TO A
REACTION AND ANOTHER. IF RATES
ARE HELD TO LOW IN AN INSURABLE
GENERALLY PULL BACK ON
UNDERWRITING MEANING KEEPING
FEWER HIGH RISK PROPERTIES IN
ORDER TO STAY SOLVENT.
MANDATING INCREASE CLAIMS
PAYMENTS WILL REQUIRED INSURER
TO THEN SEEK HIGHER RATES.
WHICH IF THE KNIGHT WILL LEAD
TO STRICTER UNDERWRITING. IN
THE END AN INSURER CANNOT
OPERATE SAFELY AT LOW RATES
WELL TAKING ALL RISKS AND
PAYING EVER INCREASING CLAIMS.
SO THE CALIFORNIA DEPARTMENT OF
INSURANCE HAS A COMPLICATED JOB.
THE CURRENT AVAILABILITY ISSUES
FOR HIGH FIRE RISK COMMUNITIES
ARE DIRECTLY RELATED TO
UNSUSTAINABLY LOW STATEWIDE
AVERAGE PRICE LEVELS. AND IN
YOUR PACKET I'VE OFFERED US A
FEW SLIDES JUST PUT SOME
PICTURES TO THE TESTIMONY. AN
SLIDE ONE CALIFORNIA'S. PREMIUM
IS SHOWN TO BE 17% BELOW THE
NATIONAL AVERAGE. AND IT'S ALSO
ALMOST. PAUSE WELL BROWN'S
GETTING THE PRETTY SLIDE DOWN.
SO CALIFORNIA'S AVERAGE PREMIUM
A 17% THIS IS USING THE LATEST
ANY I SEE DATA THAT CAME OUT
LAST MONTH. IT'S 17% BELOW THE
NATIONAL AVERAGE IN ALMOST ONE
HALF OF THE AVERAGE PRICE IN
HURRICANE STATES LIKE LOUISIANA
AND FLORIDA. EVEN THOUGH IT IS
SIGNIFICANTLY LESS EXPENSIVE TO
REBUILD A HOME IN THOSE LOWER
COST GULF STATES. WELL THE
AVERAGE PRICE OF HOMEOWNERS
INSURANCE IN THE UNITED STATES
HAS RISEN 53% IN THE LAST TEN
YEARS. IT IS RISEN TEN POINT 6%
IN CALIFORNIA. MOVING TO SLIDE
TO IT SHOWS HOW CALIFORNIA HAS
DIVERGED FROM THE REST OF THE
COUNTRY. OVER TIME. AGAIN USING
ANY I SEE DATA. THE ORANGE BAR
IS THE MOVEMENT AND NATIONAL
PRICING THE- MAROON ASH BAR IS
CALIFORNIA. NOT ALLOWING PRICES
TO INCREASE WITH THE ECONOMY
MAY WORK IN THE SHORT TERM BUT
OVER TIME WILL LEAD TO MUCH
HIGHER CATCH UP INCREASES LATER.
THAT ARE A SHOCK TO ORDINARY
HOUSEHOLD BUDGETS. MOVING TO
SLIDE THREE STARTING IN TWO
THOUSAND EIGHT AND REALLY
ENDING IN TWENTY SIXTEEN
INSURANCE INDUSTRY AS A WHOLE
FACED A PERIOD OF LOW
CATASTROPHE LOSSES. BUT EACH
YEAR GENERATED A MODEST
INDUSTRY WIDE UNDERWRITING
PROFIT AS AT THE SMALL GREEN
BARS ON INDUSTRY WIDE BASIS AND
WHEN COMBINED OVER TIME YOU CAN
SEE WITH THE BLUE LINE IT
CULMINATED IN A TEN POINT TWO
BILLION DOLLAR HISTORIC
UNDERWRITING PROFIT DATING BACK
TO NINETEEN NINETY ONE. DURING
THIS TIME THE CD I BECAME
CONCERNED. THAT HOMEOWNERS
INSURANCE PRICES WERE TOO HIGH
RELATIVE TO THESE LOW LOSSES.
AND BEGAN ASKING INSURERS
WHETHER THE PRICES WERE TOO
HIGH. IN TWENTY SIXTEEN THE CD
I EVEN ORDERED THE STATE'S
LARGEST HOMEOWNERS INSURER
STATE FARM. TO REDUCE ITS RATE
LEVEL BY 7% EVEN THOUGH THE
COMPANY WAS SEEKING A 6%
INCREASE. THAT MATTER IS STILL
IN LITIGATION AND STATE FARM IS
CURRENTLY CHARGING THE SAME
PRICE IT WAS FIRST PERMITTED TO
CHARGE IN TWENTY FOURTEEN. WHAT
COMPANY CAN CONTINUE BUSINESS
AS USUAL WITHOUT A PRICE
INCREASE IN FIVE YEARS. ALSO
SLIDE THREE INDICATES THINGS
CHANGE DRAMATICALLY IN TWENTY
SEVENTEEN WHEN THE CUMULATIVE
INDUSTRY WIDE UNDERWRITING
PROFIT DATING BACK TO NINETEEN
NINETY ONE WAS A RACE IN A
SINGLE YEAR. THAT'S THAT LARGE
RED BAR. THEN THERE WAS A
REPEAT. THE NEXT YEAR AND
TWENTY EIGHTEEN. GIVEN THE
EXPECTED ACCELERATION OF
CATASTROPHIC FIRE LOSSES
pRELATED TO CLIMATE CHANGE AND
THE DECISION BY MOODY'S
INVESTOR SERVICES TO ELEVATE
WILD FIRE TO A TOP TIER CREDIT
RATING FACTOR. THERE
SIGNIFICANT ENSURE A CONCERN
ABOUT THE SUSTAINABILITY OF
CURRENTLY APPROVED PRICE LEVELS
IN CALIFORNIA. THIS CONCERN
WILL LIKELY CONSTRAIN
AVAILABILITY IN HIGH FIRE RISK
AREAS UNTIL IT IS ADDRESSED.
THE LAST SLIDE. A SLIDE FORWARD
SHOWS THAT THIS SITUATION IS
COMPLICATED IT'S COMPLICATED
FOR THE INSURANCE INDUSTRY IS
COMPLICATED FOR THE DEPARTMENT
OF INSURANCE IN THE LAST TWO
YEARS OVER FIFTY INSURERS HAVE
SOUGHT RATE INCREASES FROM THE
CD I. AND WHILE THE AVERAGE
RATE INCREASE THAT THE CD EYES
METHODOLOGY. WOULD JUSTIFY WAS
TWENTY SEVEN PERCENT. THE
AVERAGE RATE INCREASE ACTUALLY
SOUGHT BY INSURERS WAS SIX
POINT 3% THIS IS A REAL PROBLEM
WHY WOULDN'T AN INSURER SEEK A
LARGER RATE APPROVAL EVEN IF
THE DEPARTMENT OF INSURANCE IS
ON RULES WOULD SAY IT'S
JUSTIFIED. THE ANSWER IS THAT
UNDER STATE LAW. A PUBLIC
INTERVENOR GROUP CAN DEMAND AND
RECEIVE A PUBLIC HEARING. ON
ANY RATE FILING THE 7% OR MORE.
THESE PUBLIC HEARINGS INVOLVE
THE APPOINTMENT OF
ADMINISTRATIVE LAW JUDGE. AND
ON AVERAGE THE PROCESSING TIME
IS FOURTEEN MONTHS. INSTEAD OF
THE FIVE MONTHS THAT SLIDE FOUR
INDICATES THIS THE NORMAL
PROCESSING TIME. OVER TIME HAS
BECOME COMMONPLACE FOR INSURERS
TO FILE SIX POINT 9% OR LESS.
THIS SYSTEM THEN OBVIOUSLY HAS
AN OBVIOUS DOWNSIDE IF
INSURANCE CANNOT GET TO RATE
ADEQUACY QUICKLY BUT IT WILL
TAKE LONGER FOR AN INSURER TO
BE FULLY OPEN FOR NEW AND
RENEWAL BUSINESS A SYSTEM THAT
ALLOWS AN INSURER TO SAFELY AND
QUICKLY ACHIEVE RATE ADEQUACY.
WILL BENEFIT THE PUBLIC
IMMENSELY INSTEAD OF THE
CURRENT SYSTEM THE FORCES TOO
MANY RESIDENTS IN HIGH RISK
AREAS INTO THE FAIR PLAN. FOR
THE NON ADMITTED MARKET. WHILE
THE VOLUNTARY MARKET PRICING
SLOWLY A JESS TO THE RISK OF
THE NEW NORMAL. ANECDOTAL
EVIDENCE SUGGESTS THAT THE CD
ICE PROCESSING TIME IS STARTING
TO SLOW. ONLY DUE TO THEIR
LARGE WORKLOAD BUT ALSO AN
EMERGENCY THE AYE PRACTICE OF
WITHHOLDING APPROVALS OF
UNDISPUTED RATE INCREASES UNTIL
THE INSURER AGREES TO REDUCE
ITS NON RENEWALS OR AGREE TO
OTHER NON RATING ISSUES. EACH
ADDITIONAL CASE A FURTHER DELAY
FOR THE REDUCES THE ABILITY OF
AN INSURER TO COMMENCE
COMPETITION. WE LOOK FORWARD TO
COLLABORATING WITH THE
LEGISLATURE AND THE GOVERNOR
AND THE INSURANCE COMMISSIONER
ON THE BEST WAY FORWARD. THIS
HEARING CERTAINLY STARTS AN
IMPORTANT DISCUSSION
PARTICULARLY WITH RESPECT TO
WHAT ROLE CATASTROPHE MODELS
AND THE NET COST OF REINSURANCE
COULD PLAY IN RATING. AND THANK
YOU VERY MUCH I'D BE HAPPY TO
ANSWER ANY QUESTIONS YOU MAY
HAVE. THANK YOU FOR THAT- AT
THIS POINT I WILL OPEN IT UP
FOR MEMBERS WHO HAVE ANY
QUESTIONS. STRUCTURE LETTER.
THANK YOU MARTINE FOR BEING
HERE IN OUR REGARDS TO OUR
COMMISSIONER AND- AND- ALSO
REPRESENTED FROM THE INSURANCE
COMPANY. OF COURSE WE'RE HERE
TO TRY TO WORK SOMETHING OUT
AND I THINK THAT THE SPIRIT.
BUT I'M HEARING FROM BOTH OF
YOU BECAUSE OF THE FACT THAT.
CALIFORNIA WE OBVIOUSLY HEADS
OF DEVASTATION WITH OUR FIRES
AND SO MANY FAMILIES WERE FOUND
HOMELESS AND WONDERING IF THEY
WERE EVER GOING TO BE REBUILT
OR HOMERED. OR IF THEY EVEN GET
PAID FOR THEIR YEARS AND YEARS
OF LOYALTY WITH THE INSURANCE
COMPANY. AND HERE COMES THE
FIRE AND SO THERE IT IS. BUT
NOW WE'RE FACED WITH
REBUILDING. REGROUPING AND SORT
OF THINGS THAT WE HAVE TO WORK
TOGETHER ONE OF THE THINGS THAT
YOU HAD MENTIONED. THE BILL
MISS MARTINEZ AND AFFORDABLE.
TO THE YOUNG HOMEOWNER THAT
THAT SOMEONE WHO'S BEEN THERE
AND PROPERTY FOR A NUMBER OF
YEARS. THIS IS SOMETHING THAT
IS- I'M VERY CONCERNED ABOUT.
BECAUSE OF THE FACT THAT I
THINK THAT THE INSURANCE
COMPANY IS TRYING TO SAY. WE
NEED TO RECOUP WE NEED TO. TO
PERHAPS RECOUP REINVEST
WHATEVER THEY'RE GONNA DO BUT-
THEY'VE GOT HONOR THESE CLAIMS
AND THAT'S GONNA OBVIOUSLY COST
MONEY THAT'S GONNA SET THEM
BACK. BUT WHAT. DID YOU HAVE AN
IDEA OFWHAT TO HOW WE SHOULD
PUSH HIS AND TO WHAT LEVEL.
BECAUSE THE FAIR PLAN IS. YOU
KNOW IT IS BEING. PUSHED AND
PUSHED NOW IT WE'RE GONNA BE
ASKING MORE MORE THE FAIR PLAN.
THE COST FACTORS IMPORTANT. IN
THE RATE INCREASES THAT THE
INSURANCE COMPANIES ARE GOING
TO BE LOOKING FOR. SOMETHING I
WOULD THINK THAT. THE SUREST
COMMISSIONER WITH VERY
CONCERNED ABOUT. DO YOU HAVE
ANY IDEA WHAT IT'LL TAKE THAT.
IT MIGHT LEVEL IN BALANCE
THINGS OFF BECAUSE IT IS TRUE
THE INSURANCE INDUSTRY. MUST
PAY THESE CLAIMS MUST BE READY
FOR THE NEXT. ISSUE OF PROBLEMS
WITH GOOD COULD BE STORMS COULD
BE FIRES COULD BE WHATEVER. SO
THEY'VE GOT TO BE READY
FINANCIALLY READY AND WE KNOW
THAT. BUT AT THE SAME TIME. DAY
OF GOT ALSO LOOK AT THE NORMAL.
HOMEOWNER WHO'S TRYING TO MAKE
THAT HOUSE PAYMENTS. AND
MAINTAIN THAT INSURANCE SO CAN
YOU ELABORATE ON THAT A LITTLE
BIT MISTER MARTINEZ. THANK YOU
SENATOR THANK YOU FOR THAT
QUESTION AND- THAT THAT IS A
ONE OF THE LARGEST QUESTIONS
TACIT IS FOR THAT BALANCE IF
YOU WILL OR THE QUANDARY
BETWEEN AVAILABILITY AND
AFFORDABILITY OF IN THIS CASE
HOMEOWNERS INSURANCE AND- AND
SO IT IN AND ONE ASPECT OF. WE
HAVE. INSURERS ARE REQUESTING
ADDITIONAL RATE INCREASES THAT.
AS PART OF THIS THE THIS VOTE.
EVERY DAY AND OF THE OF THE
DEPARTMENT OF INSURANCE ARE
MOVING FORWARD AND AS LONG AS
THE FILED RATE IS NOT EXCESSIVE
INADEQUATE UNFAIRLY
DISCRIMINATORY THE DEPARTMENT
HAS APPROVED THAT ABOUT THAT
INCREASED NOW ON THE FLIP SIDE-
OR WITH THAT BEING SAID IS THAT
THEN IT MEANS THE DOUBLE DIGIT
MEANS POTENTIALLY EVEN TRIPLE
DIGIT INCREASES FROM ANY POLICY
HOLDERS. AND THAT'S AS IT
STANDS TODAY AND THEN. GIVEN
ALSO WITH THE REPRESENTATIVES
OF THE INSURANCE INDUSTRY
FAILING AS WHAT YOU STATED IS
WANTING TO EVEN MORE RECOUP- OF
COSTS IN BEING ABLE TO LEVEL
IT'S SOMETHING WHERE AT LEAST
FROM THE COMMISSIONERS
PERSPECTIVE WHAT WE'RE WANTING
TO FIND THAT BALANCE OF BEING
ABLE TO ENSURE THAT UNDER PROP
ONE OF THREE READ THE
DEPARTMENT CONTINUES TO LOOK
AND REGULATE AND- PRIOR PROVES
RATES AS THE AND FOR HOMEOWNERS
INSURANCE AS WELL AS ENSURING
THAT WE HAVE A- A HEALTHY AND
VIBRANT INSURANCE MARKET PLACE
ESPECIALLY AND ADMITTED-
CARRIERS LINED SO. THE SORRY IS
TO SAY THAT IN ADDITION TOWN
HALLS OF INDIVIDUALS COMING TO
US IN THE COMMISSIONER SAYING
EXACTLY WHAT YOU'VE OUTLINED
OF. IT'S VERY HARD TO ACTUALLY
BEING ABLE TO MEET. THESE
INCREASES THAT ARE ALREADY
BEING APPROVED ON THE- IT'S
THAT CAR IS TO SAY IT'S THAT
COMPLICATED DON'T HAVE THE
ANSWER FOR YOU RIGT HERE RIGHT
NOW BUT TO SAY IT'S SOMETHING
THAT AS WE MOVE FORWARD IN THIS
POLICY DISCUSSION WE ABSOLUTELY
NEED TO KEEP THIS IN MIND AND
THERE IS THERE COULD BE THAT.
TERRY OF THAT. WITH HELLO I'M
INDUSTRY BEEN ABLE TO. BE ABLE.
TO PROPS TO HELP ANSWER THIS
QUESTION TOO BUT IT'S JUST LIKE
BUT I THINK THAT IT'S AS WE
MOVE FORWARD ON POTENTIAL
REFORMS. THAT IT ALSO IS
ENSURING THE INDIVIDUALS IN
THESE. NON RENEWED AREAS CAN
CONTINUE TO HAVE AVAILABLE
INSURANCE AT THEIR FINGERTIPS
THAT'S OVER ALSO FOR FINDING IS
THAT. THE VERY ABILITY TO HAVE
INSURANCE ACTUAL AVAILABILITY
OF INSURANCE IS THAT IS THE
CHALLENGE- LET ALONE EVEN BE
ABLE TO PAY IT BUT WERE NOW
COMING ACROSS WHERE INSURANCE
IS ACTUALLY NOT BEING IT BEING
AVAILABLE. AND SO IS AS AGAIN
AS WE MOVE FORWARD IN THINKING
ABOUT- REFORMS FOR THIS YEAR.
IN KEEPING IN MIND THE
AFFORDABILITY. SO THAT AS WE
MOVE FORWARD AND THE
PERFORMANCE ON THE MARKET. AND
I WANTED. TO TRY COLLEGE MIGHT
HAVE ADDITIONAL YEAH I'LL JUST
ADD THAT. AS OF MISTER MARTINEZ
JUST SAID WE'RE ALREADY
APPROVING THE RATE INCREASES OF
THE PREMIUMS OF ALREADY GONE
UP. WHAT WE'RE HOPING NOW IS TO
BRING THOSE PREMIUMS DOWN BY
MITIGATING FUTURE LOSS THE ONLY
WAY TO BRING PREMIUMS DOWN IS
TO REDUCE THE LIKELIHOOD OF
LOS. AND WHAT WE HOPE IS THAT
THEM MARKET. FULL FULL ONE
THROUGH THIS PROCESS AND GIVE
PEOPLE THE OPPORTUNITY TO GET
THAT MITIGATION ACTION. IN IN
PLACE. AND YOU KNOW IT'S
ALREADY HAPPENING THROUGHOUT
THE STATE. UTILITIES ALREADY
REDUCING BRUSH COMMUNITIES ARE
ACTING. I MEAN THIS HAS REALLY
SENT A MESSAGE FROM TWO
THOUSAND SEVENTEEN AND EIGHTEEN
TO COMMUNITIES BUT THEY ARE
HEARING PROBABLY IN YOUR OWN.
SOUNDS THAT YOU LIVE IN LIKE
PEOPLE GENERALLY IGNORE
INSURANCE BUT NOW THEY'RE VERY
AWARE OF THE VALUE INSURANCE-
GIVEN WE'VE ALREADY. PROVIDED
THE RATE INCREASES WE HOPE
INSURERS WILL STICK WITH THEIR
CONSUMERS. WELL WE GET THROUGH
THIS TOUGH SPACE. GET THE
HARDENING IN PLACE AND REDUCE
THE RISK OF LOTS. AND IF I MAY
FOLLOW UP MEDICARE. IN
REFERENCE THE INSURANCE
COMPANIES WOULD PEOPLE ARE
ACTUALLY NOW ON BOARD AS YOU TO
MENTION MITIGATING TRYING TO
MAKE THEIR PROPERTY SAFER AND
THEY'RE MOVING THE BRUSH ASIDE
THE TREASON SO ON AND OR
THEY'RE ADDING- TILE ROOFS OR
WHATEVER THEY'RE DOING. TO
PREVENT LOSS OF THEIR PROPERTY
HOW ARE YOU GOING TO FIND OUT
WHO'S DOING IT WHO'S NOT BRING
THOSE RATES BACK DOWN TO MAKE
THOSE ADJUSTMENTS THAT ARE
NECESSARY THAT I'M HOPING THAT
WE'RE GOING TO GET. CERTAINLY
DIFFICULT MAN HAS TO BE PART OF
THE APPROACH MOVING FORWARD
WE'VE CERTAINLY EMBRACE.
DISCUSSIONS ABOUT. WHAT IS
REALISTICALLY A JUSTIFIED
DISCOUNT. RELATED TO. TO
MITIGATION UNFORTUNATELY I
DON'T THINK ANYONE CAN SHOW YOU
A DATA SET RIGHT NOW. THAT CAN
QUANTIFY THAT ANY MEASURABLE
DEGREE I DON'T THINK ANYONE CAN
SHOW YOU WHAT WOULD HAVE
STOPPED THE FIRE FROM
OVERRUNNING PARADISE. YOU KNOW
AT SOME POINT. I MEAN WE WERE
ACTIVE IN TWO THOUSAND EIGHT
FOR THE BUILDING CODE UPGRADE
WITH THE STATE FIRE MARSHAL AND
CERTAINLY WERE PART OF THE
CHORUS OF VOICES SAYING WELL WE
OUGHT TO HAVE. SCREENS OVER
OUR- VENTS AND WE OUGHT TO HAVE
COVERED EVE'S AND YOU KNOW LET
LET'S REALLY LOOK AT WHAT CAN
WE DO TO- TO ENCOURAGE
DEFENSIBLE SPACE. BUT AS OF
THIS POINT I DON'T THINK ANYONE
CAN TELL YOU WITHOUT EVEN A LOW
DEGREE OF CERTAINTY MUCH LESS A
HIGH DEGREE OF CERTAINTY HOW
INDIVIDUAL ACTIONS AT THE
PERSONAL LEVEL. OR COMMUNITY
WIDE MITIGATION EFFORTS CAN
LEAD TO A SPECIFIED REDUCTION
IN THE RISK OF A LOSS. IN THE
FOUNTAIN GROVE AREA I WAS A
FIREPLACE COMMUNITY AND THEY
HAD FOR BOARD MEMBERS ON THEIR
FIRE WISE BOARD THAT LOST THEIR
HOMES. EVEN THOUGH THEY HAD
DONE A WONDERFUL JOB. SO THE
NOTION THAT THERE'S AN EASY FIX
THAT SOMEONE ON THEIR OWN
PROPERTY US OR A SMALL
COMMUNITY. CAN INSTANTLY JUST
SAY WELL WE'VE DONE SOME
MEDICATION EVERYTHING'S GOOD.
I'M WE CERTAINLY DON'T BELIEVE
THAT'S RIGHT. NOW WE CERTAINLY
BELIEVE THAT WERE MULTIPLE-
YEARS AHEAD OF US OF
RESEARCHING THIS AND WE'RE
CERTAINLY TRYING TO ADVANCE THE
SCIENCE AS MUCH AS EVERYONE WE
CERTAINLY. SUPPORTED
ASSEMBLYMEMBER FRIEDMAN SPELL
LAST YEAR FOCUSED ON. ADVANCING
THE SCIENCE AS WELL. ULTIMATELY
IN THE SHORT TERM WE HAVE AN
IMBALANCE THAT. THAT IN THE
SLIDES A I THINK IT PRESENTS IT
VERY QUICKLY WE CERTAINLY DON'T
THINK THAT JUST BECAUSE A
COMPANY GETS A SIX POINT
SOMETHING PERCENT INCREASE
EVERYTHING'S GOOD. AND WE HAVE
A SYSTEM THAT JUST IS
UNFORTUNATELY TAKING A LONG
TIME. TO HAVE A PRICE INCREASES
MOVE THROUGH THE SYSTEM AND- IF
THAT'S THE POLICY DECISION OF
THE STATE THERE'S AN OBVIOUS
CONSEQUENCE FOR IT WHICH IS
RESTRICTION OF AVAILABILITY AND
THEN WHAT DOES THAT LEAVE THE
AVERAGE HOMEOWNER IN THE
HIGHEST RISK COMMUNITIES WERE
ABANDONING THEM AND SAYING THE
ONLY SOLUTION WE'RE GONNA GIVE
YOU. IS THE FAIR PLAN WHICH WE
KNOW IS WAY MORE EXPENSIVE IT
HAS TO BE MORE EXPENSIVE AND
IT'S NOT MEANT TO BE A
PERMANENT. SOLUTION SO THERE
HAS TO BE A SOLUTION BETWEEN
FAIR PLAN PRICING AND WHERE THE
PRICING LEVEL IS NOW. BECAUSE
THAT'S WHAT'S GOING TO MAKE
SURE THAT PEOPLE HAVE ACCESS TO
A ROBUST. DEPENDABLE INSURANCE
PRODUCT ANY GET RID OF THE
ANXIETY THAT SO MANY PEOPLE ARE
EXPERIENCING. THANK YOU VENTURE.
THANK. AND I LEARNED ABOUT
TSUNAMIS. SO I THOUGHT I BETTER
NOT BY HOUSE ON THE PENINSULA
IN ORANGE COUNTY AND THEN-
ENJOYING- BACKPACKING IN THE
CLEVELAND NATIONAL FOREST I
THOUGHT OH MY GOODNESS OF I
BOUGHT A PLACE UP IN MAJESTIC
CANYON A THEY HAVE TO WORRY
ABOUT BUYERS SO. I DECIDE TO
BUY A HOUSE ON THE FLOOD PLAIN.
YEAH THIS PROCESS THE SEVEN
OAKS THEM BOTH EVERYTHING. I
GATHER SO THERE IS SOME RISK TO
WHEREVER YOU CHOOSE TO OWN A
HOME IN. IT SEEMS TO ME A FEW
DECADES AGO THEY DID HAVE A
PRETTY THOROUGH STUDY OF
WILDFIRES IN. IN THE CONCLUSION
THAT ONE OF THE MAJOR FACTORS
WERE SHAKE ROOFS. AND SO CHANGE
AND WE DON'T BUILD BUT SHAKE
ROOFS AND IN WHAT AREAS SO I'M
JUST CURIOUS WHAT MISTER MARK.
LEARN FROM THE LAST TWO YEARS
THE- HERE WE CAN MAKE A
SIGNIFICANT MITIGATING
IMPROVEMENTS- MISTER FRAZIER
MENTIONED. GREENS AND SOME
OTHER IDEAS BUT. WHAT TAKE
AWAYS DO WE HAVE WHAT WE LEARN
IN. ALL THIS DRESS THAT BRIEFLY
THE THERE ARE MANY SO MANY
CURRENT STUDIES GOING ON BY
BOTH THE INDUSTRY AND OUR
LOCAL. FIRE DEPARTMENTS WESTERN
FIRE CHIEFS. ALL KINDS OF
GROUPS THAT ARE GETTING
TOGETHER AND LOOKING AT
EFFECTIVE MITIGATION EFFORTS-
IT DOES IT DOES GO BEYOND THE
SCREENS WHICH ARE VERY
IMPORTANT. IN IN TERMS OF THE
KIND OF- SHRUBBERY THAT PEOPLE
HAVE IN THEIR HOMES. THE USE OF.
VARIOUS WAYS OF MAKING SURE
THAT. YOU HAVE A PROTECTED
SPACE BEYOND THE OLD DEFENSIBLE
SPACE MAPS BUT REALLY ABOUT HOW
TRIBES ARE TRIMMED ALL YOUR
FENCES ATTACHED TO YOUR HOME
THEY SHOULDN'T ATTACHED YOUR
HOME OF THE OF A WOODEN FENCE
THERE ARE JUST MANY LITTLE
DETAILS. OF THINGS THAT WE DO
NOW WE USE A WOODEN BALLS WOULD
WOOD MULCH WHICH THE FIRE
CHIEFS ARE SAYING LIKE THROWING
LITTLE MATCHES OUT IN FRONT OF
YOUR HOUSE. THERE ARE A LOT OF
IMPACTS THAT WE COULD MAKE THAT.
EVEN FIRE WISE COMMUNITIES OF
JUST A COUPLE YEARS AGO HAD NOT
TAKEN NO STEPS THEY HAD.
FOLLOWED SOME OF THE THINGS IN
PLACE AT THE TIME. BUT WE
REALLY NEED NEW BUILDING CODE
REQUIREMENTS. THE ABILITY TO
HAVE MORE SPACE BETWEEN
STRUCTURES. SO PART OF IT IS
ABOUT MOVING FORWARD AND NEW
CONSTRUCTION. AND THEN THERE
ARE A WHOLE SET OF RULES ABOUT
THINGS WE DID BEFORE. NINETEEN
SIXTIES VERY POPULAR TO PUT. IT
PINE TREES IN CYPRUS PUSHES THE
WORST HANDLES THAT WE COULD
HAVE NEXT DOOR HOMES. OTHER LOT
OF THINGS WE CAN DO. AND A LOT
OF THINGS THAT WE CAN DO THAT
ARE NEW OR NEW CONSTRUCTION
MOVING FORWARD. THAT OF BOTH
THE- BE A SAFETY STUDIES DONE
BY THE INDUSTRY. A BACK IN
THERE'S CENTER BACK IN- SOUTH
CAROLINA IN. CHS WHAT IS IT AB
EIGHT I VHS AS WELL AS WESTERN
FIRE CHIEFS LOCAL FIRED. CAL
FIRE THEY ALL ARE COMING
TOGETHER WITH THE
RECOMMENDATIONS F THINGS THAT
ARE QUITE EFFECTIVE TO DO. WHEN
CAN WE EXPECT TO GET THAT
REPORTER THAT STUDY. WELL MY
TOWN HAD A MEETING LAST WEEK TO
TALK ABOUT CHANGING OUR
BUILDING REQUIREMENTS SO. IT IS
IT DOES GO DOWN TO COMMUNITY BY
COMMUNITY DECISION MAKING. FOR
MOST OF THE CODES THERE ARE
STATE BUILDING CODES THAT WILL
LIKELY CHANGE GOING FORWARD BUT
AT THIS POINT IN TIME THERE ARE
A LOT OF COMMUNITIES MOVING
FORWARD THEMSELVES. OF MARIN
COUNTY HAS IT'S OWN ACTION
PLANS AS A COMMISSIONER LARA
GOES OUT TO EACH OF THE
SEPARATE COUNTIES WE ARE
MEETING WITH COUNTY SUPERVISORS
AND STATE LEGISLATORS AND
HEARING IN EACH OF THESE
COUNTIES. THAT IS GENERATING
THEIR OWN ON A MOVEMENT FORWARD
TO DEAL WITH MEDICATION. BUT
ONE OF THE THINGS ARE LOOKING
FOR IS A LITTLE MORE
STANDARDIZATION SO THAT THEY
KNOW THAT THE EFFORTS THEY
MAKE. WILL BE THE ONES THAT
MAKE A DIFFERENCE IN GET
KEEPING THEIR INSURANCE
COVERAGE. SINCE I'VE CENTER IF
I COULD OF JUNE OR JUST A- JUST
A JUST OUT I'D BE REMISS ALSO
IF- ONE PARTICULAR PART PROGRAM
THAT YOU MIGHT HAVE HEARD AND
I'M HAPPY TO FOLLOW UP WITH
THEM SOME INFORMATION THE
WILDFIRE. WILDFIRE PARTNERS
PROGRAM IN BOULDER. COLORADO
AND THAT IS SOMETHING THAT IS A
CURRENTLY EXISTING PROGRAM-
THAT'S AGAIN IN COLORADO THAT'S
BEEN AROUND SINCE TWENTY
FOURTEEN. THAT HAS THREE
COMPONENTS BALD FAR RISK
INSPECTIONS HOME AND COMMITTEE
WILD FIRE MITIGATION AND A
GUARANTEE OF HOMEOWNERS
INSURANCE POLICY THROUGH THE
ADMITTED MARKET FOR CERTIFIED
HOMEOWNERS. AND THAT IS AN
EXISTING PROGRAM THE
COMMISSIONER HAS REALLY BEEN
VERY INTRIGUED ABOUT THAT AND
AGAIN I DO HAVE AYE HAPPY TO
FOLLOW UP WITH YOUR OFFICE WITH
A BRIEF OVERVIEW. THAT WE HAVE
SHARED WITH- OTHER INDIVIDUALS
ON THIS COMMITTEE BUT IT'S
SOMETHING WHERE ACTUALLY WITH
THE PROPERTY ASSESSMENT A
HOMEOWNER. A MUST LIVE
PARTICULAR WILD AS A- THEY ARE
A- ON THE HOLES OWNED A
MEDICATIONS. GOES OF THE
PROPERTY LOOKS AT THE PROPERTY
ASSESSES THE- A REPORT IS
CHECK. ON REQUIRED IN
RECOMMENDED MITIGATION
STANDARDS THAT MUST BE
MAINTAINED IN A CERTIFICATION
IS PROVIDED TO THAT HOMEOWNER.
WHICH THAT IS USED TO CONTINUE
OUR OR OBTAIN INSURANCE
COVERAGE AND WITH THAT BECAUSE
OF THIS PROGRAM. THERE ARE MANY
PARTNERS IN THE ADMITTED
INSURANCE MARKET PLACE THAT YOU
WILL RECOGNIZE MANY OF THE
PARTICIPANTS ENSURE. PROGRAM
AT. A THESE AND- IN THE MID
MARKET IS. RECEIVE THIS
DIFFICULT AS PREFER PROP FIRE
MEDIC. THAT'S CAN. THEIR VAN
AND VALA AGREED THAT CERTIFY
HOMEOWNER WILL BE NON RENEWED
JUST WILD FIRE HOW AND SO IT'S
SOMETHING WHERE. OF WE BELIEVE
A AND A- Mà THAT HAS ALREADY
IN EXISTENCE TODAY IN
PARTNERSHIP WITH INDUSTRY.
CENTER IF I MAY ADD TO THAT IT
IS A PARTNERSHIP PREDOMINATELY
BETWEEN LOCAL THE LOCAL
GOVERNMENT THERE THE COUNTY IS
PUT IN A CONSIDERABLE AMOUNT OF
AMOUNT OF MONEY TO FACILITATE
THE INSPECTION AND VERIFICATION
PROCESS THAT IS A VOLUNTARY
PROGRAM IN COLORADO. ON SLIDE
ONE WE DID INCLUDE A COMPARISON
TO COLORADO BECAUSE WE ASSUME
THIS WOULD COME UP. IT'S
IMPORTANT TO SEE THAT THE
AVERAGE PREMIUM IN COLORADO IS
50% HIGHER. THEN IN CALIFORNIA.
SO I'M WE CAN TALK ABOUT THINGS
THAT ARE MITIGATION RELATED AND
WE SHOULD AND WE'RE ATTEMPTING
TO PUSH THE SCIENCE AS QUICKLY
AS ANYONE ELSE'S AND THERE'S
MANY INVOLVED IN THAT THE
FEDERAL GOVERNMENT THROUGH NEST
IS VERY ACTIVE AS WELL INDUSTRY
AS A LEADING AGENT FOR THIS
RESEARCH THROUGH AYE BHS WE
CARE DEEPLY ABOUT GETTING TO
THE ROOT OF WHAT CAN WE DO
THAT'S WITHIN OUR CONTROL TO
MITIGATE LOSSES AND HOPEFULLY
DECELERATE THE RATE OF
INFLATION. OF PRICING. BUT WE
SHOULDN'T IGNORE OTHER RELEVANT
DATA SUCH IS THE DISPARATE.
INSURANCE PRICING. EVEN IN A
PLACE LIKE COLORADO WHERE THERE
ARE I CERTAINLY LESS THAN FIVE
INSURANCE COMPANIES THAT HAVE
BEEN ABLE TO MAKE THAT PROGRAM.
WORK WORK FOR THEM. I'M. SO
THERE'S A LOT OF WORK AHEAD BUT
I SO FAR LOOK AT THIS WHAT
HAPPENED IN FLORIDA AND AFTER
NINETEEN NINETY TWO WHEN A
HURRICANE BANKRUPTED ELEVEN
INSURANCE COMPANIES WELL IT
KICKED OFF A MASSIVE INVESTMENT
IN UNDERSTANDING WHAT CAN WE DO
WHAT'S WITHIN OUR CONTROL TO
REDUCE THE RISK OF LOSS RELATED
TO WIND THEN AFTER BOTH LOMA
PRIETA AND THEN THE NORTHRIDGE
QUAKE AND WE HAD A SUBSTANTIAL
MARKET DISRUPTION IN HOMEOWNERS
INSURANCE IN NINETEEN NINETY
FIVE AND NINETEEN NINETY SIX
THE CULMINATED IN THE CREATION
OF THE CA. THAT KICKED OFF AN
ENORMOUS EFFORT WE UNDERSTAND
WHAT'S WITHIN OUR CONTROL FOR
INDIVIDUAL HOMEOWNERS AND THEN
ULTIMATELY NOW WE HAVE THE
BASEBALL PROGRAM THROUGH THE CA
AND WE'RE AT THE BEGINNING OF
THAT PROCESS NOW FIRE BECAUSE
WE WANT TO FEEL IN CONTROL WE
WANT TO SAY IF I DO X. Y. Z. TO
MY HOUSE FOUR OF MY COMMUNITY
THIS OF WITH A GOLF COURSE THAT
LIMITS WILL THAT HELP US. AND
WE HAVE TWO A DAY SCIENCE
BECAUSE RIGHT NOW WE SIMPLY NOT
THE CASE OF SAYING YOU DO THIS
YOU REDUCE THE RISK OF LOSS BY
THAT THAT SCIENCE TO SIMPLY
DOES NOT EXIST AT THIS POINT
BEFORE WE MOVE FORWARD I WANNA
STRESSED OUT WE WERE ON THIS
TOPIC THIS CALLER I DON'T ALLOW.
AND TO BE. A THE RATE IN
PROCESS. I WAS LOOKING BACK THE
REINSURANCE CáC. I THINK IT'S
THE IS FOR EIGHT OTHER STATES
THAT MY UNDERSTANDING FORTY
EIGHT OTHER STATES THAT DO
ALLOW REINSURANCE AND THERE AND
I BELIEVE COLORADO IS ON ITS
IT'S- GHETTO. ALLOW SCOTT
WASHINGTON. CALIFORNIA THE ONLY
THREE THAT DON'T ALLOW FOR
THAT'S ON WONDERING IF I'M
WRONG THAT COLORADO ALLOWS OUR
INSURANCE IT WAS WOULD LIKELY
WILL WILL WILL CONFIRM THAT
AND- YAH YEAH WILL FOLLOW UP
AND CERTAINLY YOU KNOW IT ALSO
CAN YOU ADDRESS THAT IF THEY
DID ALLOW THE REINSURANCE WITH
THAT MAKE IT MORE TOLERABLE TO.
BE ABLE TO PROVIDE MORE
COVERAGE I IN STE IN STATES
WITH PRICING FLEXIBILITY WHERE
THERE'S NOT SUCH A- A LARGE
DIFFERENCE BETWEEN RISK AND
PRICE YOU DON'T SEE THESE TYPE
OF AVAILABILITY ISSUES FOR SURE.
IN YEAH JUST WHILE WE'RE ON THE
TOPIC OF REINSURANCE YOU KNOW
THE AIRPLANE RATES TO INCLUDE
THE ACTUAL COST OF REINSURANCE
THE CALIFORNIA EARTHQUAKE
AUTHORITY'S RATES DO INCLUDE
THE ACTUAL COST OF REINSURANCE.
SO THIS ISN'T A FOREIGN CONCEPT
TO CALIFORNIA'S JUST RIGHT NOW.
IF YOU'RE IN ADMITTED ENSURE IF
YOU'RE A VOLUNTARY MARKET
ENSURE THAT IS COMPELLED TO
PARTICIPATE IN THE FAIR PLAN.
WELL THAT PRICING DOES INCLUDE
THE ACTUAL COST OF REINSURANCE-BUT SOMEHOW IF IT'S JUST YOU.
THEN WE TAKE A DIFFERENT
POSITION AND I UNDERSTAND THE
DEPARTMENT'S LONG STANDING
IDEOLOGICAL POSITION ON FEAR OF
THINGS GETTING OUT OF CONTROL.
AND THAT'S WHY IN THEIR
REGULATIONS THEY DO PUT
PARAMETERS AROUND. A PURPOSEFUL
ATTEMPTS TO USE REINSURANCE TO
EVADE RATE REGULATION WE'RE
HAPPY TO HAVE THOSE
CONVERSATIONS. BUT TO DATE WE
JUST WE SIMPLY HAVEN'T BUT WE
HOPE THAT CAN BE PART OF THE
DISK. PART WITH. WHEN DOESN'T
HAVE THE COST OF INSURANCE IN
HER CURRENT RATES. AND THE
RATES IN CALIFORNIA ARE BASED
ON THE LOSSES EXPERIENCEDBY
INSURERS RATE SETTING. PROCESS
EVALUATES INSURER'S LOSSES. AND
SETS A RATE THAT WILL PAY FOR
THE EXPECTED LOSSES IN THE
COMING YEAR. IF THE OTHER
STATES ARE DOING THE SAME. AND
THEY HAVE HIGHER PREMIUMS IT
WOULD MEAN THAT THEY'RE
EXPECTING MORE LOSSES. SO IF
YOU CLARIFY SOMETHING YOU JUST
SAID I'M SORRY I THOUGHT I
HEARD YOU SAY THAT THE FAIR
PLAN DOES NOT ALLOW IT DOESN'T
INCLUDE THAT THE REINSURANCE AS
PART OF RATE MAKING. IS THAT
ACCURATE OR PLANS CURRENT RATES
DO NOT INCLUDE A PRICE OF
REASSURANCE. HE LAN HAS THE
ABILITY IF IT WERE TO NEED
ADDITIONAL FUNDING. TO DO AN
ASSESSMENT OF THE INDUSTRY. IT
HAS NOT DONE AN ASSESSMENT IN
DECADES IT ACTUALLY HAS DONE
DISTRIBUTIONS. OF MONEY IN
RECENT DECADES- BUT THEY- THE
RAKES CURRENTLY DO NOT INCLUDE
ANY REINSURANCE COSTS. BUT CAN
THAT INCLUDED WHEN THEY DO THE
REASSESSMENT. THEY HAVE THE
ABILITY TO INCLUDE IT LATER ON
CORRECT WITHOUT GOING TO THE
CITY I'M PERMITS THE TERM AN
REVIEWS AND APPROVES THE
AIRPLANES RATES SO THAT WOULD
BE A DECISION BY THE DEPARTMENT
ON THE COMMISSIONER. OF WHETHER
THE FAIR PLAN WOULD GET ME
INSURANCE AND THAT'S RIGHT. IT
IS NOT. THE RATE MAKING ISN'T
SPECIFIC TO THE PROP ONE OF
THREE REGULATIONS THAT. OTHER
INSURERS HAVE BEEN HELD TO. I'M
SORRY I INTERRUPTED THE PROCESS
OF MISTER BORDERS WHO WERE NEXT
YOU WANTED TO A MONTH SORRY
WERE YOU DONE. YOU AND I CAN.
LET'S GO MISTER BURGESS AND
THEN WE'LL COME BACK TO USE
THAT OKAY MISTER BRIDGES. WORK
I WANT TO A THANK INSURANCE
COMMISSIONER- MEASURE LOTTE
CAME TO. MY DISTRICT- I
REPRESENT ELEVEN COUNTIES- MANY
OF WHICH- FIRE PRONE COUNTIES.
AND IT WAS IT WAS A SHOCKING
EXPERIENCE HAVING A TOWN HALL.
PEOPLE ARE SCARED THEY HAVE
EVERY RIGHT TO BE SCARED. AND
NOT JUST BASED ON WHAT IS AT
ISSUE RIGHT NOW PUBLIC SAFETY
BUT LONG TERM. YOU HAVE
CHILDREN BOB PARENTS ARE
WONDERING WHETHER NON TO ON
THEIR KIDS NEED TO BE RELOCATED
TO DIFFERENT PARTS OF THE STATE.
AS SCHOOL FUNDING MAY GO DOWN
GIVEN POPULATION DECLINES
QUALITY OF LIFE SO IT'S A
COMPLETE TRICKLE DOWN EFFECT.
AND I THINK YOU YOU CERTAINLY
APPRECIATE THAT FOR ME IT WAS
VERY MUCH A LEARNING EXPERIENCE
IN A PAINFUL LEARNING
EXPERIENCE. ODD TO HEAR THE
GRIEF THAT THE- MY CONSTITUENTS
WERE OR GOING THROUGH. SO I
THINK THERE WAS A NUMBER OF
IDEAS THAT- INSURANCE
COMMISSIONER LOT I HAD. BUT FOR
THAT HE WAS GOING TO EXPLORE.
IN THIS LEGISLATIVE CYCLE-
MAYBE AT THE END OF MY QUESTION
YOU CAN COMMENT IF YOU'RE AWARE
OF ANY. A SUBSTANTIVE CHANGES
THAT HE WOULD BE PROPOSING. BUT
YOU KIND OF CAUGHT MY
ATTENTION- IS TO PRESERVE. YOU
HAD TALKED ABOUT- OTHER RISK
PRONE AREAS OF THE STATE. NOW
MY FRIEND FROM ORANGE COUNTY
HAD MENTIONED. TSUNAMI PRONE
AREAS EARTHQUAKE PRONE AREAS
FLOOD PRONE AREAS. HOW IT HAS
THE INDUSTRY OVER THE PERIOD OF
TIME ADJUSTED TO THOSE RISK
PRONE AREAS TO THE LOCALIZED IS
THE INDUSTRY TEND TO LOCALIZE
ARE THE CALCULATION OF THE
THREAT IN THE PREMIUMS IN THAT
AREA OR CAN IT BLEED OUT IN
FUNGIBLE A. B. OFFSET ELSEWHERE.
I'M GENERALLY THEY TRY TO DO
THE FORMER IN MAKING AN
INSURANCE RATE REMEMBER IT'S A
TWO STEP PROCESS THE FIRST
DECISION IS TO TESTIFIED TO THE
DEPARTMENT OF INSURANCE WHAT IS
THE AVERAGE RATE LEVELTHAT
YOU'RE PERMITTED TO CHART AS IF
YOU WERE GONNA CHARGE EVERYONE
THE SAME. WHICH PEOPLE DON'T.
THEN THE SECOND STEP IS TO
FIGURE OUT WHAT ARE THE UNIQUE
RISK CHARACTERISTICS PRESENTED
BY THE PARTICULAR APPLICANT AND
THAT CAN RESULT IN AN UPWARD OR
DOWNWARD. IMPACT ON THE RATE
THAT THE OR THE PREMIUM THAT
SOMEONE ELSE LEE PACE. SO MUCH
OF WHAT WE'RE TALKING ABOUT
HERE IS THE AVERAGE RATE LEFT
BEFORE YOU GET TO LOOKING AT
REGIONAL DISTINCTIONS BUT SO BE
A CHARACTER AN INSURER PLACES
ITSELF AT. RISK IF IT SIMPLY
TRIES TO SAY WE'RE GOING TO AN
AVERAGE RATE THAT WILL LEAD TO
THE SO CALLED DEATH SPIRAL.
WHICH IS THE UNDER PRICE AREA.
WHEN THEY DO THAT ON WILL JUMP
ON THEM AND SO YOU YOU GUYS
HAVE GREAT PRICE WE'RE COMING
WITH YOU. AND THEN THEY'LL BE
OVER PRICED IN AN- OTHER AT.
AND THEY WON'T GET THIS THERE
AND ULTIMATELY THEY'LL END UP
HAVING AN APPROVED RATE LEVEL
BUT THEY'LL BE GETTING THE RISK
CHARACTERISTICS. OF A MUCH MUCH
HIGHER RISK LEVEL. SO OF COURSE
EACH COMPANY HAS TO MAKE SURE
THAT IT CRISIS TO RISK. AS THE
RISK PRESENTS ITSELF OR ELSE
THEY SET THEMSELVES UP FOR
SOLVENCY ISSUES. THE ISSUE IN
SOME OF THE MOUNTAIN
TERRITORIES THAT- I REPRESENT
WHERE YOU HAD A LOT OF THE-
BUYERS. I THINK THE ONLY TWO
CARRIERS THAT EXISTED MY
KNOWLEDGE IS DATED THIS IS A
LEASE TO. A YEAR OR MORE.
LLOYDS OF LONDON I THINK YET
SCOTTSDALE BOTH OF WHICH ARE
OUTSIDE OF CALIFORNIA. AND MY
UNDERSTANDING IS THAT WHEN.
THESE ENTITIES ARE OUTSIDE DO
THEY PAY IN TO THE FAIR PLAN.
CAN YOU CAN YOU HELP ME
UNDERSTAND THE RATIONALE ON HOW
THAT PLAYS OUT. SO THE- AN
INSURED ISN'T THE TO GO TO THE
FAIR PLAN UNLESS THEY CAN'T
FIND COVERAGE IN THE ADMITTED
MARKET. THAT DOES. FIRST MEAN
GOING TO BE ADMITTED CARRIERS
THAT WERE MOST FAMILIAR WITH
AND TRYING TO FIND COVERAGE.
AND A SURPLUS LINES CARRIER
CAN'T WRITE A HOMEOWNER'S
POLICY UNLESS THAT CAN CONSUMER
CAN'T FIND COVERAGE IN THE
ADMITTED MARKET. PROHIBITED
FROM PARTICIPATING AS A FIRST
LEVEL OFFER OF COVERAGE AND
PART OF THE- A SO THAT LEAVES
THEM OUT OF THE COMMITMENT OF
BACKING THE FAIR PLAN
ESSENTIALLY BECAUSE THEY'RE
THEY'RE NOT AN ACTIVE
PARTICIPANT IN THE ADMITTED
MARKET. YOUR PLAN IS THAT LAST
STOP AND IT'S KIND OF THE MIGHT
SEE IT AS THE- INDUSTRY'S COST
BETWEEN FULLY OF GETTING THE
OPPORTUNITY TO WRITE THE BEST
BUSINESS. THEN THEY BECOME THE
BACKSTOP FOR THE BUSINESS THAT
THEY TURNED AWAY BECAUSE IT'S
TOO HIGH RISK FOR THEIR
UNDERWRITING. THE NOT A MINUTE
MARKETS REALLY A SAFETY VALVE
THAT'S EXISTED FOR A LONG TIME.
THE REASON THEY'RE NOT ADMITTED
COMPANIES THEY'RE NOT
PHYSICALLY PRESENT THERE'S NO
PERSONAL JURISDICTION OVER THEM
THEY RESIDE OUTSIDE OF THE
STATE. SO THERE'S A SPECIAL
PROCESS HAPPEN FOR LONG ARM
SAID. AND SO BECAUSE OF THAT WE
HAVE TO SET UP A SPECIAL
PROCESS FOR AN INTERMEDIARY WHO
IS PHYSICALLY PRESENT HERE TO
BE ABLE TO EXECUTE THAT
TRANSACTION. BUT IT IS THE
SURPLUS LINE MARKET IS ALWAYS A
SAFETY VALVE IN IT'S TYPICALLY
NOT USE THAT MUCH IN PERSONAL
LINES IT CERTAINLY WOULDN'T BE
USED IN. AN AUTO EXCEPT FOR
MAYBE SORT OF EXOTIC CAR THAT
YOU WOULDN'T ORDINARILY BE ABLE
TO FIND A CARRIER FOR. BUT IT'S
TYPICALLY MORE FOR LARGER
COMMERCIAL RISKS YOU KNOW LET'S
SAY PLACES WHERE PEOPLE GET
HURT A BOWLING ALLEY RIGHT THAT
MIGHT HAVE TO GO TO THE NON
ADMITTED MARKET- BECAUSE IT'S A
BUNCH SLIPPERY SHOES AND
SLIPPERS. SLIPPERY FLOORS- AND
SO THE NOT ADMITTED MARKET
REALLY IS JUST SOMETHING THAT
IS MEANT TO GROW DURING TIMES
OF MARKET DISRUPTION
PARTICULARLY IN AND PERSONAL
LINES MARKET LKE HOMEOWNERS
IT'S RELATIVELY LOW I WANNA SAY
MAYBE AT ANY ONE TIME ONE
PERCENT. OF MARKET. IN YOU KNOW
DIRT TIMES LIKE THIS IT COULD
GO. BUT BECOME QUE GAINS. AT
SOME POINT. AND THEY HAVE A
ABSOLUTE LIMIT ON HOW MUCH THEY
CAN GROW. ANYWAY BUT IT IS I
THINK- EVEN ADMITTED CARRIERS
DON'T LOOK AT THE NOT A MINI
MARKET A SORT OF COMPETITION
IT'S UNNECESSARY SAFETY VALVE
WHEN IT WHEN WE NEED IT. OUR
LAST QUESTION ON IN MISTER
MARTINEZ WHEN I'M DONE MAYBE IN
YOUR CLOSING COMMENTS IF YOU
WISH TALK ABOUT THE- INSURANCE
COMMISSIONER LADAS- IDEAS FOR
LEGISLATION IN THE PSYCH- I
THINK THE. WELL. I'LL SAVE THAT
FOR ANOTHER FOLLOWED ANOTHER
FOLLOW UP MEETING. THANK YO
JIM THANK YOU SENATOR BATES.
THANK YOU AND THANK YOU FOR OF
BEING HERE OF SIGNIFICANT ISSUE
MY QUESTION TAKES US BACK I
THINK TO THE MITIGATION ISSUES
IN THE STANDARDIZATION OF THAT
BECAUSE THAT'S WHERE I SEE A
REAL IMPORTANT COMMON
DENOMINATOR IN THE RISK
EVALUATION. IN MY COMMUNITY ARE
SOUTH ORANGE COUNTY LIVE NEW
DEVELOPMENT AND WE HAVE BEEN
REQUIRED TO HAVE TO A LOT OF
PATIENCE LOANS WE HAVE TO HAVE
OFF HARDENING AROUND OUR
PROPERTIES YOU CAN'T BUY
ANYTHING SUCCULENTS MAYBE IN
OUR OWNER SO SEASONS ARE
REQUIRED TO SUBMIT THIS PLAN TO
THE ORANGE COUNTY FIRE
AUTHORITY DOES A REMARKABLE JOB
IN THE ENFORCEMENT AN OVERVIEW
BUT THAT'S ONE COMMUNITY
INTERESTINGLY ENOUGH. ARE WE
HAD MANY CALLS OF PEOPLE WHO
LOST THEIR INSURANCE AFTER THE
BIG FIRES OF 201-820-1720
EIGHTEEN YET THEY WERE BUILT TO
WHAT WHAT I WOULD CONSIDER TO
BE A PRETTY HIGH MITIGATION OF
REQUIREMENT INCLUDING MY OWN
PROPERTY SO WHEN WILL THE
DEPARTMENT OF INSURANCE HAVE
SOMETHING THAT IS VERY RELIABLE
FOR OUR INSURANCE- I INSURANCE
PROVIDERS SO THAT WHEN THEY ARE
LOOKING AT THE INSURANCE AND
INSURANCE THEY HAVE A REAL
SOLID STANDARD. OF CONSISTENT
OVER COMMUNITIES THAT ARE
MEETING WHAT AT LEAST
EMPIRICALLY MIGHT BE THE BEST
MITIGATION STANDARDS WE KNOW
DATE WITH STING AT I'M THINKING
HOW DO YOU HAVE SOME OUR
RESEARCH I CHECKED WHERE YOU'VE
GOT ALL THESE MITIGATION
STANDARDS AND THEN YOU TRY TO
BURN IT DOWN. WITHOUT KNOWING
EXACTLY WHAT WORK OTHER THAN
SPRINKLERS EVERYWHERE I'M NOT
SURE WE CAN GET TO A STANDARD
WHERE YOU CAN BE REQUIRING THE
INSURANCE COMPANIES ME TO LOWER
THE RATES BECAUSE THESE PEOPLE
ARE. IN A CERTAIN ARE. I HOW TO
GO OF RISK AVERSE SPEAK THEY
MITIGATED PROPERLY. BECAUSE
HARPER LEE SEEMS BE. MOVING IN
A I GUESS IS IMPROVING A FINE
DES. THAT MY PEOPLE IN MY
DISTRICT WERE REALLY HARM EVEN
THOUGH THEY MAY OUT. AGAINST
STANDARDS AND MANY OTHER OFFICE
HAD TO GO TO THE FAIR PLAN- BUT
I HAVE ALREADY MET WHAT I
CONSIDER TO BE ONE OF THE
HIGHEST STAND. EVEN EMPLOYEE GO
COME OVER. UNDER BROWN. ALONG
WITH MANAGER WITH TO BE YOU SEE
A SO WHAT'S YOUR ANSWER I THINK
MORE FOR YOU MISTER MARTINEZ
WHETHER YOU ARE WORKING ON.
GIVE US SOMETHING THAT'S MORE
DEPENDABLE CONSISTENT RELIABLE
FOR OUR ENSURE. THANK YOU
SENATOR BASIN AND BEING A
FORMER. AS YOU KNOW OF RESIDENT
OF ORANGE COUNTY I'VE ALWAYS.
KNOWN AND APPRECIATED THE-
TREMENDOUS GROWTH IN THAT AREA%
ESPECIALLY IN THE DISTRICT YOU
REPRESENT. AND IN THAT WAS A
AND SOME REPORTERS I- MAYBE IT
CAN BE OF SERVICE TO FOR OF
WHAT YOUR YOUR QUESTION WHAT
YOU HAD. OF WHAT THE COMMISSION
WAS INTERESTED. IN ALONG THE
LINES OF THIS MEDICATION
QUESTION THAT NO SENATOR BATES
IS ASKING. YOUR QUESTION OF
WHAT THE COMMISSIONERS
INTERESTED AND- IS THAT. YEAH
IT'S GOING TO BE IN ADDITION TO
THE COMMISSIONER AND THE
DEPARTMENT OF INSURANCE BECAUSE
WE'RE OF COURSE ONE WE FEEL
STRONGLY EITHER TABLE BUT IN
ADDITION WITH THE STATE
LEGISLATURE AND THE
MINISTRATION. BECAUSE WHAT WE
HEARD PREVIOUS IS THERE ARE- A
LOT OF INCREASING STANDARDS OUT
THERE I MEAN WE HAVE THE
INDUSTRY WE HAVE CONSUMER
GROUPS WE HAVE FIRE AUTHORITIES
AND PROFESSIONALS. HERE IN THE
STATE RESEARCH INSTITUTIONS AND
THE DEPARTMENT HAS CERTAINLY
BEEN. BRINGING AND HAVING THOSE
CONVERSATIONS ALREADY SINCE ONE
THE COMMISSIONER WAS. SWORN IN
OFFICE LAST TIME AS JANUARY OF
HAVING A INDIVIDUALS COME
TOGETHER AND TRYING AGAIN
COLLATE AND FIGURE OUT WHAT ARE
THE STANDARDS THAT WE CAN BRING
TOGETHER THAT WORK FOR
CALIFORNIA IT DOES EXTEND
BEYOND WE BELIEVE IN ADDITION
TO THE DEPARTMENT INSURANCE BUT
TOO AGAIN. WITH THE LEGISLATURE
WITH OTHER WITH THE
ADMINISTRATION. AT WITH THE
STATE FIRE MARSHAL MEAN YOU
NAME IT THERE TELL FIREMAN
THERE'S ALL THESE. INDIVIDUALS
THAT WE ALL HAVE A VESTED
INTEREST IN WHAT. THE
STANDARDS. COULD BE SHOULD BE
WE SING LEGISLATION AS I MADE
EARLIER AND REMARKS OF. OF
ASSEMBLY AND SENATE BILLS
MOVING FORWARD IT TO FURTHER
CRYSTALLIZE WHAT. AGAIN THOSE
STANDARDS SHOULD BE FOR HOME
ARE NAMED FOR COMMUNICATION
RESOLVE PENDING LEGISLATION ON
IN BOTH HOUSES OF FURTHER TO
HAVE DEFENSIBLE SPACE. I'M
REQUIREMENTS AND SO ALL OF THIS
IS I USED TO SAY THAT THAT THE
LEGISLATURE AND POLICYMAKERS
WE'VE BEEN ENGAGING THIS AND
THIS ALL I MEAN ALL TOGETHER.
AND SO EDIT WITH I MEAN WITH
INDUSTRY MEAN AS INDUSTRY
PRESENTS SO THAT THEY'VE
SUPPORTED SEVERAL OF THESE
BILLS AND YES ABSOLUTELY. AND
TO YOUR POINT THIS IS A THIS
WOULD BE A HUGE. I'D SAY THEME
COMMONALITY IN ALL OF WHAT
WE'RE SAYING. IS THAT. BEN AS
WE MOVE FORWARD ITS AGAIN NOT
BALANCE OF. WITH RATES. IN AN
AND AFFORDABLE OF THEM HAVING A
THESE CONSIST KNOWN THROUGHOUT
MITIGATION STANDARDS
THROUGHOUT. THE STATE HAVING
THE STRUCTURAL SYSTEM FOR
VERIFYING WHO MEETS THAT
STANDARD ENSURING THAT THE
STANDARDS. OF ONCE THEY'RE
CREATED IN AND HOPEFULLY ON
THIS EXPEDITED TIMELINE ONE
WOULD. HOPE IS THAT THAN BEING
ABLE TO CREATE. THE FOLKS THAT
GO OUT THERE TO ENSURE THESE
HOMES AND COMMITTEES AND
MAINTAIN. AN INTRIGUING THAT
AND CENTER FOR HOMEOWNERS IN
COMMUNITIES TO MEET AND
MAINTAIN THAT STANDARD AND
THAT'S WHERE I CAN ON BECAUSE
OF THAT. AS WE KNOW NEEDED A
UNDER EXISTING CALIFORNIA STATE
LAW. YES NO ONE CAN MANDATE
INSURANCE TO A RECORD THERE'S
NO MAN MANDATORY THOU SHALT
HAVE INSURANCE COVERAGE IN
THESE PARTS OF THE STATE. YET
AS PART OF THIS CONVERSATION
AND THAT THE COMMISSIONER WITH
ALL OF YOU WANT TO HAVE IS WHAT
IS THAN- INPUTTING EVERYTHING
OUT THERE- AS TO AGAIN THE
STANDARDS OF RATES. OF HAVING
THIS OF. INCENTIVES THAT
HOMEOWNERS IN COMMUNITIES KNOW
THAT WHEN THEY PUT IN THE
RESOURCE IS THE TIME TO
MITIGATE THEIR HOME AND
COMMITTEES AND MAINTAIN IT BUT
THEN IN TURN WILL KNOW THAT
THEY WILL BE ABLE TO HAVE
INSURANCE AT THE END OF THE DAY
AND NOT HAVE TO WORRY ABOUT
SENDING THEIR OF WORRY EVEN
ABOUT HOW HIS POTENTIALLY
HAVING THEIR FAMILY OR THEIR
CHILDREN HAVE TO RELOCATE TO
ANOTHER PART OF THE STATE I'M
IN ORDER TO ANSWER TO SICK A
QUALITY EDUCATION. AND SO I IT
SO THAT IS SOMETHING OF WHERE
WE WANTED TO- THE TECHNICIAN IS
VERY COMMITTED TO ENGAGING IN
THAT CONVERSATION AND THAT'S
SOMETHING GOING TO BE ONE OF
HIS IT'S A MAJOR- POLICY
DISCUSSIONS ON THIS YEAR. WELL
I JUST A FOLLOW UP COMMENT IT
WOULD SEEM TO ME THAT THERE HAS
TO BE A COROLLARY. FROM THE
MITIGATION THAT YOU HAVE.
PROVIDED ON YOUR CALL LED TO
THE RATE INCREASE. ARE THE RATE
RANGE THAT INSURERS WOULD BE
ALLOWED TO HAVE FOR THAT
PARTICULAR. I AM AREA RATHER
THAN DESPLAT SUPPRESSION. OF
THEIR ABILITY TO RAISE RATES
SENATE AND CLEARLY THEY HAVE TO
BE PART OF THAT EQUATION.
BECAUSE ITS FINAL LIKE WILL I
THINK I'VE DONE EVERYTHING IN
YOUR CHARGING ME X. Y. Z. IS BE
EASIER FOR THE INSURANCE-
COMPANY TO SAY WELL YOU FALL IN
LEVEL SEE. ODD TO GET TO LEVEL
B. WHICH IS LOW OR YOU NEED TO
HAVE THESE ADDITIONAL THINGS
AND THEN THEY CAN MAKE THEIR
CHOICE TO GO TO FAIR SOME OTHER
THING BUT- SEEMS TO ME THAT
THEY SEEM TO BE LOCKED OUT OF
THE CONVERSATION. ON WHEN YOU
RAISE OR SUPPRESS THE RATE
INCREASE BECAUSE OF THE RISK
BETH IN A PARTICULAR AREA. AND
I'M NOT SURE THAT THERE HAVE
BEEN PART OF THAT CONVERSATION
JUST SEEMS LIKE. THE REAL ISSUE
IS NOT STANDARDIZED MAYBE THE
ASININE THING- AND THAT YOU
HAVE RANGES. DEPENDING ON WHERE
YOU LIVE IN WHAT MITIGATION YOU
HAVE. BUT WHERE I LIVE I GRANT
THE TOP OF THE SCALE WE HAVE TO
DO EVERYTHING. WE CANNOT WE ALL
PROPERTY DEBT TO THE WILD LAND
WE CAN'T DO ANYTHING AND HOW
STAY BEARER HAVES. OR SOMETHING
LIKE THAT AND WE'RE VERY
REGULATE. ARRAY OF. ABOUT NINE
OF THEM MIGHT MAYBE IT ACTUALLY.
AND I. THANK THAT YOU NEED TO
BE OF THE CAR AS- GO FORWARD
AND MAKE THINGS. ALSO OF THE
EQUATION. THANK YOU MISTER
MARKEY HAD A FALL QUESTION
MAYBE JUST PICK UP FOR YOU WERE
DISCUSSING WITH MARCH. ABOUT TO.
THEY'RE NOT THE FAIR PLAN HAS
REINSURANCE AND I'M JUST
WONDERING IF IT DOES AND
DIRECTLY BECAUSE YOU'RE RELYING
ON THE CARRIERS TO BE YOUR
BACKSTOP AND THEY USE REINSURER.
THE DO THEY RELY ON THAT THEY
RELY ON THE INSURERS INSURERS
ACTUALLY HAVEN'T HAD TO MAKE
ANY CONTRIBUTIONS AND DECADES
SO IT IS A POSSIBILITY IN ANY
GIVEN YEAR. OF THAT THEY WOULD.
DRAW ON INSURE- RESERVES. BUT
THE LATEST DISTRIBUTION CZAR
ASSESSMENTS HAVE ACTUALLY BEEN
A HUNDRED MILLION DOLLARS IN
DISTRIBUTIONS FROM THE FAIR
PLAN TO THE INDUSTRY NOT THE
OTHER WAY AROUND. OF THE FAIR
PLANS RATES ARE BASED ON ITS
OWN LOSS EXPERIENCE AND IT HAS
HAD VERY HIGH LOS EXPERIENCE AS
AS THE REST OF THE INDUSTRY
THEY HAVE A CURRENT RATE
INCREASE WILD THEY'VE ALREADY
HAD A RATE INCREASE APPROVED.
AND SO THEIR RATES ARE ALSO A
VERY DIFFICULT FOR A LOT OF
PEOPLE TO AFFORD THEY THEY DO
BUY REINSURANCE BUT THAT IS
THEIR CHOICE TO DO. EVEN THOUGH
WE DON'T ALLOW RE INSURANCE
FLOW DIRECTLY INTO RATE MAKING
FOR THE FAIR PLAN R FOR
INSURERS. WE DON'T THE DOCTOR
FROM THEIR LOSSES. THE AMOUNTS
THAT THEY RECEIVED FROM
REINSURERS IN COMPENSATION THAT
COVERED LOSSES BY THE
REINSURERS WE DON'T SAY WE'RE
GONNA TAKE THIS HUNDRED MILLION
OUT. AS THE REINSURERS
REIMBURSE YOU FOR THAT THAT
MONEY STAYS IN AND THE RATES
ARE BASED ON THEIR ENTIRE LOS
EXPERIENCE. EVEN THOUGH THEY'RE
PAYING OUT SOME MONEY FOR
REINSURERS RATES ACTUALLY GOT
THAT BUILD UP OF. LOOTING MORE
OF THE LOSSES THEN THE INSURER
ACTUALLY PAID. AND THAT HELPS
THE INSURER PAY FOR THE
REINSURANCE BUT IT KEEPS IT ON
A DIRECT BASIS AND TRANSPARENT
TO THE CONSUMER OF THE CONSUMER
GROUP AND EVERYONE OF. YOU KNOW
WHERE THE WHAT THE BASIS OF THE
RATE IS BASED ON LOS EXPERIENCE
AN ACTUAL EXPENSES. PERRANCE
YOU'LL HEAR FROM REINSURANCE
PERSON I BET IT CAN BE VERY
MARKET DRIVEN DEPENDING ON HOW
MUCH MONEY HAS. LOAD INVESTMENT
MONEY INTO THE REINSURANCE
MARKET OR HASN'T AT ANY GIVEN
TIME. SO IT'S A TOUGH THING TO
PUT INTO A REGULATED MARKET.
THANK YOU CAN I INTERJECT ONLY
BECAUSE WE'RE RUNNING A LITTLE
BIT AT A TIME WHEN WE HAVE
ANOTHER PANEL AND WE WILL FOCUS
ON THE FOR PLAN SPECIFICALLY
NEXT I HEARING SO WE'RE GOING
TO GET AN OPPORTUNITY TO ANSWER
OR ASK ALL THOSE QUESTIONS. BUT
I JUST HAVE A REALLY QUICK
QUESTION WALL. OUT FIRST.
KATHLEEN I'M SORRY I DIDN'T. DO
YOU HAVE ANY QUESTIONS OKAY. I
JUST REALLY WANT TO MAKE SURE
THAT WE ARE THANK THAT THE
COMMISSIONER I KNOW THAT YOU
MENTIONED HOW TWENTY TOWN HALL
MEETINGS- AND YOU KNOW THAT'S
COMMENDABLE. COMMENDABLE HE'S
OUT THERE HEARING FROM PEOPLE
DIRECTLY CAN YOU SHARE A LITTLE
BIT ABOUT. THE AREAS HE COVERED
AS A- TEST A DAY WHERE THE
VICTIMS ARE DID HE GO ACROSS
THE STATE CAN SURE THE
DIFFERENCE BETWEEN REGIONS. IN
TERMS OF THE CONCERNS. THE
CHALLENGES. MAN WITH. BUT I'VE
BEEN TO MANY OF MY COLLEAGUES
FROM THE SIGNAL REALLY OUT HERE
AND CATHERINE TORUS WITH ME
ALSO WE'VE BEEN TO THESE WEEK
WE'VE BEEN REALLY ALL OVER THE
STATE AS FAR FROM LOOMIS COUNTY
N. SIERRA COUNTY WE WERE JUST
IN MALIBU- IN VENTURA HAD BOTH
A- LISTENING WORKSHOP ON RATES
BUT ALSO A CLEANS WORKSHOP FOR
PEOPLE THERE WE'VE BEEN A EL
DORADO COUNTY AND PLASTER
COUNTY. SAN BERNARDINO COUNTY
WE HAVE BEEN ALL OVER THE STATE
AND THE REASON FOR THAT IS IT'S
NOT JUST THE SIERRA FOOTHILLS
THAT ARE HAVING THESE ISSUES
BUT SO YOU KNOW IT'S IN PARTS
OF LOS ANGELES COUNTY BASICALLY
EVERY COUNTY IN CALIFORNIA
MAYBE OTHER THAN OUR
AGRICULTURAL VALLEY. HAS SOME
COMPONENT OF THE COUNTY THAT IS
HAVING DIFFICULTIES WITH
INSURANCE BUT WE WILL BE IN
SANTA CLARA COUNTY AND SAN
MATTEO COUNTY INOTES VERY POP
URBAN AREA. THAT AS YOU MOVE UP
THE HILLSIDES IN ANY ANYWHERE
AROUND THE BAY AREA YOU GET IN
YOU. CAN YOU PLEASE- IF WE CAN
ONLY BE A FOR THE SECOND TIME
CAN YOU- AT LEAST A SHARE SOME
OF THE CHALLENGES THAT YOU SEE
ACROSS THE STATE WHAT WOULD YOU
SEE THAT THE SAME FOR OR WHAT'S
DIFFERENT ACROSS REGIONS. A
SENATOR BOAR JUST ACTUALLY
MENTIONED OF A LOT OF THE
THINGS THAT HAD TO COME UP IT'S
PEOPLE WORRIED ABOUT THE VALUE
OF THEIR HOME. A WHETHER
THEY'RE COMMUNITY WILL BE ABLE
TO HOLD TOGETHER AND A IN OUT
ROUTE IT FLOWS DOWN TO THE
SCHOOLS TO THE PROPERTY VALUES
THE TAX BASE. SO THAT'S WHAT
YOU'RE HEARING FROM THE LOCAL
OFFICIALS FOR THE FAMILIES IT'S
ABOUT AFFORDABILITY OF THEIR
HOME. AND YOU KNOW BEING ABLE
TO PAY BOTH THAT IN OTHER HOME
LOAN AND NOW THIS ESCALATING
PREMIUM THAT THEY DIDN'T
ANTICIPATE WHEN THEY BOUGHT THE
HOME. AND IS A IS A MISTER
MARTINEZ MENTION WE HEAR FROM
REALTORS THAT SAY THEY'VE HAD.
SALES FALL THROUGH BECAUSE
PERSON GETS A BIT ON THE WHAT
THEIR INSURANCE WILL BE FINE
CELLS CAN BE TOO HIGH AND THEN
SAYS NO I DON'T WANT TO BUY
THIS PROPERTY I'M GONNA LOOK
SOMEWHERE ELSE. SO THE THESE
ARE THE SAME ISSUES AS THE
SENATOR MENTIONED THAT WE'RE
HEARING. PRETTY MUCH EVERYWHERE
WE GO. AND I HAVE A QUESTION
FOR MR. SINCE YOU BROUGHT THE
UP YOU. THE A TWENTY. AND I
JUST WANT HOW DO YOU THINK IT'S
WORKING AND IS THERE. LOOPHOLES
THAT YOU'RE FINING WHERE PEOPLE
ARE NOT BEING INSURED. I WOULD
SAY YES THEY MENTIONED OF
COURSE THAT WAS THE FIRST ONE
OF PRESSING THE PAUSE BUTTON
AND- I MEAN I'D SAY WITH WITH
ANYTHING- IT WAS IT WAS
OBVIOUSLY BRAND THERE IS
SOMETHING THAT WE JUST RECENTLY
HAD IMPLEMENTED- AND NOW
CURRENTLY OVER ONE MILLION
HOMEOWNERS AND A HUNDRED AND
SEVENTY SIX THE CODES WOULD
SAY. I WOULD SAY ALL IN ALL
THAT IT HAS BEEN GOING WELL IN
SO FAR OF THAT- IT WE BELIEVE
INSURERS HAVE BEEN COMPLIANT
WITH WITH WITH THE MANDATORY
ASPECT. OF NO NON RENEWAL FOR
THAT FOR THIS ENTIRE YEAR I
MEAN THAT'S AGAIN AS OF UP TO
THE STATE SO. ALL IN ALL THAT
WE BELIEVE THAT- WE'VE BEEN IN
COMMUNICATION WITH INDUSTRY OF
THE- AND ON THIS THE MANDATORY
MORATORIUM AND SO
IMPLEMENTATION. AGAIN IS FOR
THE FIRST TIME I'VE OF COURSE
AS WE MOVE FORWARD- INTERESTED
TO HEAR IF THERE'S BEEN ANY-
CONCERNS ON WITH IT WITH. THE
HOMEOWNERS AND WITH- INDUSTRY
AS TO- WAYS AND TO IMPROVE
IMPLEMENTATION WE BELIEVE ALL
AND ALL THAT IT HAS BEEN. IT
HAS BEEN EFFECTIVE. THANK YOU
FOR SHARING- AND I HAVE A
ANOTHER QUESTION- FOR YOU BUT-
THIS PERTAINS TO JOE SOMETHING
YOU SAID EARLIER YOU SAID JOB
FOR ALREADY HAVING A VERY
DIFFICULT TIME BEING ABLE TO
FOR THE FAIR PLAN AND DIAL. AND
I KNOW THEY GET HOW HAVE A
LAWSUIT GOING ON SO AS MUCH AS
YOU CAN SHARE- MY CONCERN HAD
BEEN THE HOT- MANDATING MORE
COVERAGE FROM THE FAIR PLAN.
DOES NOT CONCERN THE DEPARTMENT
THAT DID CAN COME EVEN MORE
EXPENSIVE AND MORE AFFORDABLE.
CAN YOU SHARE. IT IS CERTAINLY.
SO IT'S A LITTLE A LITTLE
COMPLICATED BUT BASICALLY THE.
OBLIGATED BY A HOMEOWNER'S
POLICY FROM THE FAIR PLAN THEY
STILL HAVE THE OPTION OF BUYING
A FIRE POLICY WHICH WOULD BE.
CHEAPER POSSIBLY. BUT THE OTHER
ISSUE IS MOST CONSUMERS WANT TO
HAVE MORE THAN JUST A FIRE
COVERAGE SO WHAT THEY'RE HAVING
TO DO IS BUY A FIRE POLICY FROM
THE FAIR PLAN. AND THEN THE
DIFFERENCE IN CONDITIONS POLICY
FROM A ONE OF THE ADMITTED
INSURERS. THEY'RE PAYING THE
EXPENSE LOADING ON THAT
DIFFERENCE IN CONDITIONS POLICY
WITH THE ADMITTED STUDENTS FOR
THEIR PLAYING THE EXPENSE
LOADING ON THE- FIRE POLICY
WITH THE FAIR PLAN. OTHER THAN
A DOUBLE PAYING FOR A BIG PIECE
OF. OF EXPENSES IT REALLY ISN'T
HELPING THEM. HAVE MORE
COVERAGE. HE SINGLE HAVING THE
ABILITY TO BUY A SINGLE POLICY
GETS RID OF THE DOUBLE EXPENSE
LOADING AND IT WOULD JUST BE AN
OPTION THEY COULD THEY STILL
HAVE THE OPTION TO GO THE FIRE
POLICY. THEY DIDN'T CARE ABOUT
HE OTHER VERY IMPORTANT
COVERAGES BUT COULD ONLY AFFORD
THE FIRE POLICY THE COULD TO
SET. I HAVE A QUESTION TO
IRAQ'S I ALSO HEARD YOU SAY
EARLIER THAT ARE YOU THINK A
LONG TERM SOLUTION IS RESTORING
THE VOLUNTARY MARKET. WITHOUT
DISRUPT WHAT YOU PERCEIVED TO
BE A SOLUTION HOW LONG TERM
SOLUTION WELL CERTAINLY IT'S
NOT THE LONG TERM SOLUTION AND
I THINK IT IN EVEN MY PREPARED
REMARKS I MENTIONED THAT THE
FAIR PLAN IS NEVER A LONG TERM.
SOLUTION NOW THE ASSERTION THAT
THE DEPARTMENT IS THAT IT HAS
MADE THAT SOMEHOW THERE'S THIS
SAVINGS BECAUSE OF ELIMINATION
OF DUAL ADMINISTRATIVE COSTS
THEY'VE NOT ONCE PRODUCE ANY
NUMBERS TO BACK THAT UP AND- IN
FACT ADMINISTRATIVE COSTS
RELATED TO DIFFERENCE IN
CONDITIONS POLICIES ARE
DRAMATICALLY DIFFERENT.
DRAMATICALLY LOWER THAN THE
ADMINISTRATIVE COTS OF THE
FAIR PLAN SIMPLY BECAUSE THESE
ARE GIGANTIC INSURANCE
COMPANIES TO HAVE AFICIONADO
ATION SO. WE WOULD LOOK FORWARD%
TO THE DEPARTMENT OF INSURANCE
IS ANALYSIS OF. OF HOW AN H. O.
THREE POLICY WOULD ACTUALLY BE
FOR THROUGH THE FAIR PLAN.
WOULD ACTUALLY BE CHEAPER THAN
THE FAIR PLAN PLUS A D. I SEE
BELIEVE THIS. SO WE LOOK
FORWARD TO THAT ANALYSIS I
BELIEVE THE FAIR PLAN HAS ELISE
COMMENCED THAT TYPE OF ANALYSIS
BUT I DON'T. REPRESENT THEM SO
THEY'LL THEY'LL I'M SURE BE
INTERESTED TO LET YOU KNOW
THEIR ANALYSIS BUT- WE
CERTAINLY DON'T SEE THAT THE
NOTION THAT SOMEHOW THERE'S
NATURE THREE FAIR PLAN THAT'S
GOING TO BE LESS EXPENSIVE.
THAN THE EXISTING WIDELY
AVAILABLE THE ICY POLICIES.
WHEN I SAY THE SOLUTION IS TO
RESTORE THE VOLUNTARY MARKET.
WELL THE AVERAGE PRICE FOR
HOMEOWNERS INSURANCE IN
CALIFORNIA IS A THOUSAND
DOLLARS A YEAR. AND A FAIR PLAN
POLICY WOULD SAY LET'S BE
TWENTY FIVE HUNDRED DOLLARS
JUST FOR FIRE ONLY RIGHT NOT
EVEN THE FULL H. A THREE POLICY.
I'LL WE NOT BE FOCUS ON MAKING
SURE THE VIOLIN. MARK EVEN IF
IT GOES UP. AND 15% EVEN IF WE
WOULD GO UP TO THE NATIONAL
AVERAGE WHICH WOULD BE 17%
WHICH IS WE'RE PRESENTLY 17%
BELOW THE NATIONAL AVERAGE COST
EVEN THOUGH WE'RE A HIGH COST
RECONSTRUCTION STATE. THE
ABILITY OF THE ADMITTED MARKET
TO COME BACK WITH A LEVEL OF
RATE ADEQUACY YOU EVEN AT
HIGHER THAN IT IS NOW IS STILL
DRAMATICALLY NOT EVEN CLOSE.
BETTER THAN RELYING UPON THE
FAIR PLAN WHY ARE WE ALLOWING
PEOPLE TO HAVE NO ADMITTED
MARKET OPTION IN THEIR
COMMUNITIES AND JUST SAYING
WELL. GO AHEAD AND GO TO THE
FAIR PLAN THAT'S THE WORST
THING WE CAN DO FOR THEM THE
BEST THING WE CAN DO IS TO HAVE
IT ADMITTED MARKET PRICE THAT
ALLOWS INSURANCE COMPANIES TO
COMPETE IN EVERY OMMUNITY.
THAT IS WHAT WE NEED NOT SOME
RELIANCE UPON THE FAIR PLAN.
WELL ABOVE THE FIRST AND I ALSO
JUST WANT TO BE CLEAR HERE-THE
REASON I HAVE SO MANY OF YOU
KNOW QUESTIONS AND CREE AUSSIE
I HAPPEN TO CULTURE THE ENERGY
AN ENTRANCE STABILITY WORKING
GROUP. WITH CENTER MCGUIRE
WE'VE BEEN WORKING SINCE.
NOVEMBER AND HAVING DIFFERENT
HEARINGS AND JUST SAY LISTEN TO
ALL SIDES AND I THINK THAT. NOW
THE INSURANCE COMMISSIONER IS
COMMITTED TO PROTECTING
CONSUMERS AND MAKING SURE THAT
THEY HAVE INSURANCE AND WE
HAPPEN TO REPRESENTS SIMILAR
COMMUNITY SO. SO I THINK
EVERYONE'S TRYING TO FIND THE
ANSWER AND IT'S HERE SOMEWHERE
AND US SO. I'M REALLY- THANKFUL
THAT YOU'RE ALL HERE TRYING TO
GIVE US BOTH SIDES- BUT I HAVE
ONE MORE QUESTION AND- AND IT
PERTAINS TO RACHEL THREE
INSURANCE- BECAUSE I YOU KNOW
I'VE EXPRESS AND AGAIN I KNOW
THAT YOU'RE GOING T LITIGATION
AND PLEASE TELL ME A FIVE. WHAT
YOU CAN TELL ME WHAT WHAT YOU
CANNOT. IF THEY DO. ALL THE
ENSURE. YOU KNOW AND I ASKED
THIS QUESTION PREVIOUSLY- MY
CONCERN IS THAT NOW THEY HAVE
TO FOCUS ON A WORKERS
COMPENSATION INSURANCE. AND
LAST TIME IS THAT YOU COULD AND
SHARE CAN YOU SHARE NOW HOLD
THAT IT'S GOING TO IMPACT THE
WAY THE FAIR PLAN DOES BUSINESS.
THE OKAY WELL I THINK I CAN
ANSWER THAT SO THAT THE FAIR
PLAN GENERALLY USES OUTSIDE
ADJUSTERS TO. IN A DO THE DAY
TO DAY WORK OF- INSPECTING AND
CLAIMS AND DETERMINING PAYMENT.
AND WORKERS COMP THE BILL THE
PIECE OF WENT WORKERS
COMPENSATION CALLED REFER TO IS
INCIDENTAL WORKERS COMP IS A
VERY LOW LEVEL LOSS RATIO I
MEAN IT IT IS TYPICALLY MAY BE
A FIFTEEN DOLLAR PIECE OF YOUR
HOMEOWNER'S POLICY. SO THERE
ARE VERY FEW LOSSES WE'RE
TALKING ABOUT THIS IS IN OF
SOMEBODY THAT. DOESN'T
REGULARLY WORK FOR YOU AS AN
EMPLOYEE BUT COMES ON YOUR
PROPERTY TO DO SOME KIND OF
WORK. BEING INJURED. IT'S
EXTREMELY RARE SO IT. THE
INCIDENT ALL WORKERS COMP IS
NOT REALLY A GENERATOR OF MUCH
WORKLOAD. THE LIABILITY PIECE
IS SUPER IMPORTANT FOR PEOPLE
TO HAVE. MOST PEOPLE DON'T GO
OUT AND BUY A D. I. C. OR A
LIABILITY POLICY EVEN THOUGH
THEY SHOULD. IT IT CAN HAVE A
CATASTROPHIC LOSS BUT THE
NUMBER OF CLAIMS ARE RELATIVELY
LOW. GENERALLY ON HOMEOWNERS
COVERAGE. SO IT'S THE SMALLER
PART OF THE PRICE AND OF A
HOMEOWNER'S POLICY. IT'S JUST
VERY IMPORTANT TO HAVE BEEN
GIVEN HW LITTLE PEOPLE KINDA
KNOW ABOUT INSURANCE MANY DON'T
KNOW TO GO BY THAT D. IC OR BY
THE LIGHT A LIABILITY POLICY.
SO IT'S MORE WORK FOR THE FAIR
PLAN DEFINITELY BUT THEY ARE
GOING TO BE GETTING THE
COMPLETE PREMIUM OF AN H. O.
THREE POLICY. TO PAY FOR THE
EXPENSES OF THE COVERAGES THAT
THEY'LL BE OFFERING. WELL AND
JUST TO BE CLEAR BECAUSE LIKE I
SAID I'VE HEARD SO MUCH OF THIS
INFORMATION ALREADY AND I KNOW
WE'RE GOING TO HEAR THE FOR A
PLAN NEXT TIME BUT- WHEN THEY
SAID- THAT. THEY DON'T HAVE THE
INFRASTRUCTURE IN AND DISCUSS
HI HAVING TO IMPLEMENT
INFRASTRUCTURE TO BE ABLE TO
OFFER THIS KIND OF COVERAGE
FROM WHAT I UNDERSTAND WELL AND
AGAIN YOU KNOW I GOT THAT
INFORMATION IN A REPORT. THE
AVERAGE COST PER- CONSUMER IS
GOING TO BE AROUND THREE
HUNDRED DOLLARS THE COST THAT'S
GONNA GOAL HI SO WHEN WE TALK
ABOUT FIFTEEN DOLLARS NOT BEING
A BIG DEAL FOR THIS TYPE OF
INSURANCE BUT- BUT THEN THEY
HAVE TO UPSET OF THE
INFRASTRUCTURE AND- HIGHER THE
PEOPLE AND- AND OF THAT'S GONNA
COST THE RATES TO GO UP. THIS
WAS NOT JUST A FIFTEEN DOLLARS
IT'S BUT COSTS THAT THEY'RE
GOING TO HAVE TO. PASS ON TO
CONSUMER. WELL IT COULD BE AT
THE A COST TO THE INDUSTRY SO
WHEN THE FAIR PLAN WAS PUT IN
PLACE RIGHT WE DECIDED THAT THE
STATE HAD A CRISIS OF COVERAGE
IT WAS GENERALLY FOR PEOPLE IN
INNER CITIES AND THE INDUSTRY
WAS WRITING BUSINESS THROUGHOUT
THE STATE. BUT CHOSE NOT TO
WRITE PEOPLE IN THESE PARTS OF
OUR CITIES IN CALIFORNIA
OAKLAND RICHMOND EAST LA AND TO
GET THAT ROLLING AYE THERE WAS
AN ASSESSMENT TO THE INDUSTRY
TO GET IT MOVING FORWARD I
DON'T KNOW IF THAT'S NECESSARY
NOW THE FAIR PLAN ACTUALLY. IT
IS BUILDING A SURPLUS NOW THEY
HAVE INCREASED THEIR RATES IN A
THEY HAVE SUFFERED SEVERE
LOSSES BUT WHETHER THEY NEED TO
DO AN ASSESSMENT TO ACTUALLY.
CREATE THIS INFRASTRUCTURE I'D
I DON'T THINK THAT'S
NECESSARILY SO AND I WOULDN'T
NECESSARILY RELY ON THE NUMBERS
THEY'VE SHARED IN TERMS OF THE
COST WE HAVEN'T REALLY LOOKED
AT WHAT THAT WOULD BE. BUT IF
YOU DETERMINE THAT PEOPLE HAVE
A NEED FOR THIS COVERAGE. THEN
IT'S SOMETHING THAT REALLY
PROTECTS YOUR COMMUNITY YOU YOU
DON'T WANT PEOPLE OF MALE MEN
GOING ON TO A PROPERTY DOESN'T
HAVE INSURANCE OR OR PARTNERS
GOING ON OR WORKMEN. AND THEN
FINDING THE PERSON HAS NO
LIABILITY COVERAGE IN A WORKERS
COMP COVERAGE. IT IS IN CENTRAL
IT'S WHY EVERYBODY THAT'S VICE
COVERAGE IN THE ADMITTED MARKET
BUYS A HOMEOWNER'S POLICY THEY
DON'T BY A FIRE POLICY IF THEY
CAN HELP BUT- THE PEOPLE WANT
HOMEOWNERS. AND WE THINK THE
INDUSTRY IS TURNING AWAY PEOPLE
FROM BUYING A HOMEOWNER'S
POLICY. WHY NOT OFFER THEM A
HOMEOWNER'S POLICY IN THE FAIR
PLAN. OKAY THANK YOU FOR YOUR
COMMENTS OR I'M JUST GONNA LET
REX IF YOU WANT TO ADD TO THAT
AND WE'RE GOING TO CONVINCE
DIFFICULT TO HEAR THAT
STATEMENT I MEAN THE DEPARTMENT
OF INSURANCE IS ESTABLISH A
PRICING LEVEL AND THEN WANTS TO
ACT AS IF THE- NORMAL REACTION
WHICH IS A RESTRICTION OF
UNDERWRITING ASSIST PRICE TO
THEM. SO IT'S JUST A POLICY
CHOICE. IF THE DEPARTMENT WANTS
TO KEEP RATE LEVELS WHERE THEY
ARE THERE IS AN OBVIOUS IN
AFFABLE REACTION IF YOU REDUCE
THE PRICE OF SOMETHING YOU'RE
GOING TO GET LESS OF A SUPPLY
OF SOMETHING. SO OF COURSE
INSURANCE COMPANIES ARE IN THE
BUSINESS OF SELLING HOMEOWNERS
INSURANCE AND THEY GO TO GREAT
LENGTHS TO MARKET ESTABLISHES
SHOULD BE XIN NETWORKS AND YOU
CAN'T. FIND A LITTLE LEAGUE
BASEBALL FANS IN THE ENTIRE
STATE THAT DOESN'T HAVE SOME
INSURANCE AGENTS NAME ON IT. SO
OF COURSE THEY WANT TO BE OUT
THERE SELLING INSURANCE. SO THE
ANSWER IS TO MAKE SURE THAT THE
VOLUNTARY MARKET CAN. AND THAT
PEOPLE WOULD EVEN HAVE TO WORRY
ABOUT DO I NEED TO DE I SEE
POLICY OR WHAT'S GOING TO BE
THE COST OF THE FAIR PLAN THE
ANSWER IS TO MAKE SURE THAT THE
HOMEOWNERS INSURANCE MARKET IS
VIBRANT. AND THAT WE JUST GET
TO A NORMALIZED PROPS BECAUSE
OVER TIME WE JUST SIMPLY FALLEN
BEHIND IN OUR TRYING TO CATCH
UP. AND IF I DON'T CATCH UP
SOON THERE'S JUST TO BE MORE
AVAILABILITY ISSUES UNTIL WE DO.
OKAY THANK YOU AND I JUST WANT
TO THANK. I KNOW THAT IT'S A
LOT OF. AND A LOT OF. MY IF
WE'RE GONNA. COME UP WITH
SOLUTIONS WE REALLY. TO HAVE
THIS ROBUST DEBATE. AND SO
MISTER MORE LIKE I'M SORRY YOU
WANT ONE MORE QUESTION. YES
OKAY SO WE'RE GONNA LET HIM
JUST ONE MORE QUESTION AND- AND
THE WE'RE GONNA. GO TO THE NEXT
PANEL THIS FIRST EVER TO
VENTURE WE SHOULD THANK MR.
FRAZIER AND HIS INDUSTRY FOR
THIS PAUSE BUTTON- FOR WHEN WE
ANSWERED OURSELVES AS
GOVERNMENT IN THE MARKETPLACE.
GETS RATHER AWKWARD- AND SO.
WE'RE SEEING IT IN OTHER AREAS
INCLUDING ENERGY. WERE KIND OF
INSERTING OURSELVES IN
EVERYBODY'S RATES ARE GOING UP.
SO UP. I WANT TO THANK YOU- BUT
I ALSO WANT TO. ASK THE DIRTY
QUESTION AND THAT IS- BECAUSE
OF THESE WILL BE AREAS IT
CETERA. ARE WE SEEING- SOME
KIND OF MIGRATION INTO OTHER.
AREAS OF THE STATE WERE WERE.
SEEING THEM SUBSIDIZE.
INSURANCE POLICIES IN IN THESE
AREAS I JUST WANT TO. KIND OF
ASK THE DIRTY QUESTION YEAH I
MEAN IT'S A DIFFICULT. QUESTION
RIVER A RIGHT THERE'S A RISK TO
DOING THAT- BECAUSE IF YOU
ESTABLISH TO LOW OF A PRICE IN
A HIGH RISK. AREA OFFSET IT.
WITH TO HAVE A PRICE AND LOWER
RISK AREA THEN YOU'LL GET OUT
COMPETED IN THE LOW RISK AREA.
SO IT'S DIFFICULT SO THE MARK
GENERALLY WOULD DISSUADE THAT
TYPE OF BEHAVIOR. IT'S NOT TO
SAY IT. CAN'T EXIST- BUT AT
THIS POINT- YOU'D HAVE TO LOOK
AT EACH COMPANY AND FIGURE OUT
HOW THEY'RE HANDLING THAT- YOU
KNOW IF COMPANIES COULD. STAY
IN HIGH RISK AREAS BY BRINGING
IN- PREMIUM FROM OTHER AREAS
THAT WOULD IT WOULD BE GREAT
FOR THEM BUT I THINK IT'S- VERY
DIFFICULT. TO ACCOMPLISH THAT
OKAY. AT AND I DON'T GIVE A
LESSON NOT THIRTY SECONDS
BECAUSE WE NEED ON. WORDS IN
MISTER ROGERS MOUTH BUT I THINK
WE JUST HEARD HIM SUGGEST AS
WHEN YOU ASKED ABOUT THE FAIR
PLAN THE ADMINISTRATIVE COSTS.
THAT ARRESTED IT'D BE PRETTY
EXORBITANT FOR THEM TO
IMPLEMENT AN H. O. THREE- AND
THEN I THINK YOU SUGGESTED WELL
YOU COULD HAVE INDUSTRY JUST
PAY FOR THEM TO DO THAT. AND IN
MY MIND THAT IS IN AN S. AND
SAYING WELL LET'S SUBSIDIZE THE
FAIR PLAN EFFORT THERE BY
PUTTING A SHIFTING ACOSTA WERE
THE ADMITTED MARKET WHICH WOULD
THEN BE. SUBSIDIZING THAT
EFFORT OVER THERE SO WE ARE
GOING TO HAVE TO CONCLUDE THIS
PANEL AT JACK YOU KNOW I
APOLOGIZE FOR EVERYONE THAT'S
HAD. THAT'S BEEN VERY PATIENTS
BUT I REALLY NEED IT- EVERYONE
TO HAVE THE OPPORTUNITY TO ASK
QUESTIONS THANK YOU TO BOTH OF
YOU AND PLEASE SEND MY REGARDS
TO THE INSURANCE COMMISSIONER
THANK YOU. NEXT I WANT TO CALL
OUR POUND- NUMBER TWO WHICH
WILL FOCUS ON TOOLS FOR
MANAGING RISK EXPOSURE. SO WE
HAVE WITH US TODAY- DENNIS
BURKE VICE PRESIDNT OF STAY
RELATIONS FROM THE RE INSURANCE
ASSOCIATION OF AMERICA. AS WELL
AS ROGER. I HOPE I FIT RIGHT
GRAY NEAR. PHD SENIOR VICE
PRESIDENT FROM GLOBAL
RESILIENCE PRACTICE LEADER AIR
WILL WORLDWIDE. THANK YOU SO
MUCH FOR BEING HERE AND I'M I
THINK UT. CARE ACROSS IS ALSO
GOING TO JOIN IN CASE THERE'S
ANY QUESTIONS I THANK YOU SO
MUCH AND I'M GOING TO- KEEP IT
A LITTLE BIT MORE CAN DANCE AND
DOES ALLOW YOU THE OPPORTUNITY
TO SHARE WITH US A LOT ABOUT
THE MARKET AND JUST. PHYLLIS IN
AND- WE HAVE A SENSE OF WHAT
YOUR MARKET US. IS THIS ON YES
HI OUT. I'M DENNIS BURKE FROM
THE REINSURANCE INDUSTRY- AND
MEMBERS OF THE COMMITTEE FOR-
HEARING HAVING US HERE TODAY IN
HEARING OUR PERSPECTIVE. I'M
GOING TO TRY TO BE PETTY AS
POSSIBLE SO THAT WAY AND LEAVE
AS MUCH TIME FOR QUESTIONS THAT
YOU MIGHT HAVE BECAUSE IF I TRY
TO ANSWER YOUR QUESTIONS UP
FRONT WILL BE HERE FOREVER- SO
WHAT IS RE INSURANCE
REINSURANCE IS INSURANCE FOR
INSURANCE COMPANY. IT'S A
PRUDENT RISK MANAGEMENT TOOL
THAT HELPS INSURANCE RIGHT MORE
BUSINESS ON THE SAME SURPLUS.
IT HELPS THEM MANAGE THEIR
EXPOSURES AT THE SAME TIME AND
IT HELPS THEM KEEP THEIR
PROMISES TO THAT POLICY
HOLDERS. WHAT REINSURANCE DOES
NOT DO IS IT DOESN'T CHANGE THE
RISK AT ALL. SO THE RISK OF
WILDFIRE DOESN'T CHANGE BECAUSE
YOU HAVE INSURANCE AND RISK OF
WILDFIRE DOESN'T CHANGE.
BECAUSE THE INSURANCE COMPANY
HAS REINSURANCE. EVERY
INSURANCE DOES IS IT CHANGES
WHO PAYS PART OF THE LOS. AND
WHAT'S GOOD ABOUT THE
REINSURANCE INDUSTRY IS WE ARE
A GLOBAL INDUSTRY WE SPREAD THE
RISK THROUGHOUT THE WORLD AND
WHEN THERE IS A CATASTROPHIC
FIRE. THE STATE OF CALIFORNIA
WILL GET AN ECONOMIC STIMULUS
FROM THE MONEY COMING FROM.
GLOBAL POCKET BOOKS AND THE
CONSUMERS IN CALIFORNIA WILL
HAVE THEIR CLAIMS PAID. THE
GLOBAL MARKET IS HUGE WE ARE
COMPETING AS THE REINSURANCE
COMPANIES AGAINST OF THE
REINSURANCE COMPANIES AND
AGAINST THE CAPITAL MARKETS WHO
HAVE FOUND THAT INSURANCE
LINKED SECURITIES WHICH IS
BASICALLY A MEANS OF THE
INSURANCE THE CAPITAL MARKETS
PENSION FUNDS ETCETERA
COMPETING IN THE REINSURANCE
MARKET. IS IN THE TRILLIONS OF
DOLLARS SO WE HAVE THIS. NO
SHORTAGE OF CAPACITY THERE IS
AMPLE CAPACITY FOR THE RISK.
THE QUESTION IS HOW MUCH RISK
IS THERE. AND THAT TURNS US TO
WILD FIRES SO THE FIRST THING
YOU HAVE A CHART IN FRONT OF
YOU I HOPE. WHICH IS HAS. ZERO
ATTRIBUTION ON IT I WILL TELL
YOU- WHAT THAT IS- AFTER A
DISCUSSION YESTERDAY SOMEBODY I
WAS ASKED YOU KNOW WHAT IS THE
HISTORY OF WILDFIRE LOSS IN
CALIFORNIA AND I FOUND A MUNICH
RE CHART- THAT HAD THE ENTIRE
NATION ON S. BUT I SAID YOU
HAVE CALIFORNIA SPECIFIC DATA
AND I WAS SENT THIS THIS
MORNING IT DOESN'T SAY MUNICH
RE BY MUNICH RE IS ONE OF THE
LARGEST IF NOT THE LARGEST
REINSURER IN THE WORLD AND THEY
TRACK. NATURAL DISASTER RISKS
AND THEY HAVE AN ONLINE
DATABASE- THAT YOU CAN LOOK AT
BUT WHAT THEY HAVE HERE IS THE
CALIFORNIA WILDFIRE LOSSES
SINCE NINETEEN EIGHTY. AND THIS
INCLUDES COMMERCIAL AS WELL AS
RESIDENTIAL BUT I WAS TOLD THAT
THE RULE OF THUMB IS 85% OF
THESE LOSSES THE REST ARE
RESIDENTIAL. SO IF YOU LOOK AT
THE IDEA OF YOU AND YOUR SOLELY
CONCERNED WITH RESIDENTIAL
YEAH. SHOP A LITTLE BIT OFF.
WHAT'S TELLING ABOUT THIS
CHARGE IS THAT THE YEARS OF
TWENTY SEVENTEEN AND TWENTY
EIGHTEEN INDIVIDUALLY AND
COLLECTIVELY DWARF THE THIRTY
SIX YEARS PRIOR TO THAT. AND
IT'S JUST ABSOLUTELY STARTLING
THE DIFFERENCE. AND THE
QUESTION IS HISTORY STILL
APPROPRIATE. TO EVALUATE WHAT
THE FUTURE IS GOING TO BRING IS
THERE A NEW NORMAL DUE TO
CLIMATE CHANGE. THAT THE POLICY%
QUESTION THAT'S THE
UNDERWRITING QUESTION THAT'S
THE RISK THAT WE IN THE
INSURANCE AND REINSURANCE
INDUSTRIES ALL GRAPPLING WITH
AS WE TRY TO DEVELOP- INSURANCE
AND REINSURANCE PORTFOLIOS ON A
FORWARD LOOKING BASIS BECAUSE
WE'RE ACTUALLY. PRICING NOW FOR
WHAT THE NEXT YEAR WILL BRING.
SO WHAT SHOULD YOU DO AS POLICY
MAKERS THE ONE THING YOU SHOULD
DO IS CONTINUE YOUR RISK
REDUCTION EFFORTS- THE
REDUCTION OF WILDFIRE FUELS THE
TAKING DOWN OF AS MANY- DEAD
TREES AS POSSIBLE AND
CONTINUING TO DO IT BECAUSE
IT'S A MAINTENANCE THING- THE-
WILD WILD GRASSES AND- AND
TREES GROW IF YOU DON'T.
ROUTINELY MAINTAIN- THOSE AREAS
SO WE NEED TO DO THAT WE NEED
TO ACTUALLY ENCOURAGE THE- THE
FEDERAL GOVERNMENT TO DO ITS
PART WITH THE FOR THE FEDERAL
WILDLIFE SINCE- WE NEED TO JUST
CONTINUE TO MANAGE THE- DATE
THE FUELS AS POSSIBLE AND WE
NEED TO EVALUATE HOW AND WHERE
WE BUILD- I BHS WHICH IS THE
INDUSTRY'S. OF RESILIENCY
EFFORT TO DETERMINE WHAT'S THE
BEST WAY TO BUILD HOMES IS
FOCUSING VERY VERY MUCH-
WILDFIRE ACTUALLY SAW ONE OF
THEIR WILD FIRE PRESENTATIONS
LINES- IT REALLY THEY THEY HAVE
A WILDFIRE GENERATOR AND THEY
CREATE AN EMBER STORM. AND THEY
SHOOT IT AT TO THAT HOUSE
THAT'S BILL TWO WAYS A
CONVENTIONAL HOUSE AND EIGHTY A
BETTER DEVELOPED HOUSE- AND THE
BETTER DEVELOPED HOUSE DOES
MUCH BETTER- SO. HOW YOU BUILD
IN WAY YOU BILLS VERY
IMPORTANT- MY UNDERSTANDING IS
THAT- CONSUMER THAT INDIVIDUAL
HOME MITIGATION IS NOT. AS GOOD
AS INDIVIDUAL HOME MITIGATION
AND COMMUNITY WIDE MITIGATION
SO TO COMMUNITY WIDE MITIGATION
IS VERY IMPORTANT. AND FINAL. I
WOULD ENCOURAGE YOU NOT TO
INTERFERE WITH THE PRIVATE
MARKET TO THE EXTENT POSSIBLE I
RECOGNIZE THIS A LOT OF SOCIAL
POLICY ISSUES THAT EVERYBODY
NEEDS TO ADDRESS TO THE EXTENT
YOU CAN KEEP SOCIAL PROP POLICY
OUT OF THE ECONOMICS OF THE
INDUSTRY- IT'S BETTER. FRAZIER
DID A WONDERFUL JOB OF
EXPLAINING HOW- SUPPRESSING
RATES INTERFERES WITH THE
WILLINGNESS OF CAPITAL TO
COMPETE IN THE MARKET SO I
WOULD ENCOURAGE YOU TO DO
WHATEVER YOU CAN TO ATTRACT
ADDITIONAL CAPITAL SO THEY CAN
HELP. DIVERSIFY THE RISK OVER
IS MANY BALANCE SHEETS AS
POSSIBLE. THANK YOU FOR THAT-
AND ON SOMETHING LIKE WE ARE
HERE OFTEN AND DIE WAS REALLY
INTERESTING TO JUST TO HEAR HOW
WHAT HAPPENS SORT OF WORLDWIDE
IMPACTS WHAT WE DO HERE SO NOW
I'M GONNA TURN IT OVER. TO
OUGHT TO ROGER AND- TRYING KEEP
IT BRIEF IF YOU COUNT THANK YOU.
ZAHN OKAY- I WILL TRY AND KEEP
IT BRIEF WHICH IT RUBIO MEMBERS
OF THE COMMITTEE- MY NAME IS
ROGER GRENIER A AND M. SENIOR
VICE PRESIDENT AT A AYE OUR
WORLDWIDE. WERE MAJOR PROVIDER
OF CATASTROPHE MODELS FOR THE
INSURANCE INDUSTRY AND THE
PUBLIC SECTOR. I WANNA START
THINKING FOR THE OPPORTUNITY TO
SPEAK TO YOU TODAY. ABOUT THE
WILD CARD CHALLENGES IN THE
STATE OF CALIFORNIA. IN A
PARTICULAR Y. CATASTROPHE
MODELS ARE AN IMPORTANT AND
NECESSARY COMPONENT PROCESSING
WILDFIRE RISK. OUR GOAL IS A
COMPANIES TO HELP SOCIETY
PREPARE FOR THE IMPACT OF
CATASTROPHES BEFORE THEY OCCUR.
WE ARE PLEASED TO BE PART OF
THE CONVERSATION TOWARDS
DEVELOPING SOLUTIONS TO BENEFIT
RESIDENTS AND BUSINESSES
THROUGHOUT THE STATE. IN A FEW
MINUTES I HAVE TODAY LIKE TO
BRIEFLY DESCRIBE OUR MODELS AND
THE VALUE THEY PROVIDE- BUT
FIRST A PROVIDE A SHORT HISTORY.
PRIOR TO HURRICANE ANDREW IN
NINETEEN NINETY TWO INSURERS
MADE ASSUMPTIONS- EMPLOYEE AND
EMPLOYED RULES OF THUMB.
LARGELY BASED ON HIS HISTORICAL
EXPERIENCE. ESTIMATE TE SIZE
OF A POTENTIAL LOSS FROM A
LARGE EVENT. THE CONSENSUS
OPINION WAS A CATEGORY FIVE
HURRICANE IN SOUTH FLORIDA
COULD CAUSE. AT MOST A FIVE
BILLION DOLLAR INDUSTRY LOS.
UNFORTUNATELY HURRICANE ANDREW
EXPOSE THE FAR ON THAT APPROACH
AFTER THE INDUSTRY SUFFERED A
FIFTEEN BILLION DOLLAR LOSS IN
THE EVENT. SEVERAL INSURERS
BECAME INSOLVENT IN MANY
STRUGGLE TO PAY CLAIMS AFT
PRECIPITATING INSURANCE CRISIS
IN THE STATE. HERE IN
CALIFORNIA THE NINETEEN NINETY
FOUR NORTHRIDGE EARTHQUAKE
PROVIDERS SIMILAR WAKE UP CALL.
UNDERLINING THE LIMITATIONS OF
SOLELY RELYING ON HISTORICAL
LOS EXPERIENCE SINCE THAT TIME
THE CALIFORNIA EARTHQUAKE
AUTHORITY NOT RELIES HEAVILY ON
CATASTROPHE MODELS IN ASSESSING
EARTHQUAKE RISK. OUR COMPANY
FOUNDED NINETEEN EIGHTY
NINETEEN EIGHTY SEVEN WAS THE
FIRST TO APPLY SCIENCE IN DATA
TO THE PROBLEM. CATASTROPHE
MODELS HAVE NOW BECOME THE
STANDARD APPROACH FOR MEASURING
AND MANAGING THE FINANCIAL
IMPACT OF EXTREME EVENTS
INCLUDING WHILE FAR.
pSOLVING IS ONE OF ESTIMATING
LAWSON VERY LOW FREQUENCY BUT
VERY HIGH SEVERITY EVENTS THE
TYPE OF EVENTS THE CAN CAUSE A
COMPANY TO GO INSOLVENT AND WE
POLICY HOLDERS WITHOUT
PROTECTION AT A TIME WHEN THEY
NEED IT MOST. THE EVENTS ARE
RARE IN THE UNDERLYING
EXPOSURES ARE CONSTANTLY
EVOLVING FOR THESE EVENTS
RELYING ON LOSS HISTORY AS IS
DONE IN THE CALIFORNIA PROPERTY
INSURANCE MARKET IS SIMPLY NOT
ENOUGH. IN THIS WAY THE MODELS
AUGMENT AND EFFECTIVELY EXTEND
THE AVAILABLE LOS EXPERIENCE.
HEY OURS WHILE FARMALL STARTS
WITH AN OBJECTIVE ASSESSMENT OF
THE LANDSCAPE A PROPENSITY TO
BURN. CONSIDERING A REGION
SPECIFIC ASSESSMENT OF THE
VEGETATIVE FUELS THE SLOPE ROAD
ACCESS. AND HOMES AND
BUSINESSES OF AND MAPPED ONTO
THE SURFACE. THE MODEL BEGINS
BY CREATING A TECHNICIAN. AND
THEN SIMULATING THE EFFECTS OF
WIND AND WEATHER. FIRE SPREAD.
FIRE SUPPRESSION. IN THE
PHYSICAL CHARACTERISTICS OF THE
STRUCTURES. THE MODEL CONSIDERS
THE IMPACT ON THE FUEL LOAD FOR
MULTI YEAR CYCLES OF RAIN
FALLING DROUGHT. CREATING A
CATALOG OF EVENTS THAT ARE
PHYSICALLY REALISTIC IN
STATISTICALLY CONSISTENT WITH
THE HISTORICAL RECORD. THE
MODEL SIMULATES A YEAR'S WORTH
OF WILDFIRE ACTIVITY MANY
THOUSANDS OF TIMES INCLUDING
EVENTS THAT HAVE NOT YET
OCCURRED BUT COULD OCCUR. IN
ADDITION THE WHAT THE MODEL
FILLS A CRITICAL GAP IN THE
HISTORICAL RECORD. BUT
CONSIDERING HOW FIRES THAT
OCCURRED MANY YEARS AGO WENT
UNDEVELOPED AREAS MIGHT IMPACT
TODAY'S EXPOSURE. HEY OUR
SERVICE THE INSURANCE INDUSTRY
AND THE PUBLIC SECTOR BY
PROVIDING REALISTIC AN
OBJECTIVE MODELS THAT ENABLE
ALL STAKEHOLDERS TO BETTER
UNDERSTAND AND EFFECTIVELY
MANAGE RISK. TODAY CATASTROPHE
MALLS ARE USED THROUGHOUT THE
INSURANCE VALUE CHAIN BY
BROKERS AND INSURERS.
REINSURERS IN THE CAPITAL
MARKETS. THE MODEL RESULTS ARE
REGARDED AS THE CURRENCY. FOR
CATASTROPHE RESTAURANTS FOR. IN
A VERY RECENT AND RELEVANT
EXAMPLE AIRS WHILE FARM ALWAYS
USES ONE INPUT INTO THE DESIGN
OF THE CALIFORNIA WILDFIRE FUND
RECOMMENDED BY SB NINE A ONE
COMMISSION AND THE GOVERNOR AND
LATER INTRODUCED BY A. B. TEN
FIFTY FOUR. ESTIMATES FROM THE
MODEL WE USE ALONG WITH THE
HISTORICAL DATA IN DETERMINING
THE SIZE OF THE FUND. THE
MODELS ALSO PROVIDE A FRAMEWORK
ON WHICH TO MEASURE IN ASSESS
THE IMPACTS OF MITIGATION.
CHANGES TO LAND USE AND UPDATES
TO BUILDING CODES. ENHANCING
THE SCIENCE AND THE DATA
THROUGH A PROCESS OF CONTINUAL
IMPROVEMENT ALLOWS THE MODELS
IN THE INSURANCE INDUSTRY TO
EVOLVE. THIS HELPS TO FILL THE
INDUSTRY'S MISSION OF PROVIDING
FINANCIAL RESILIENCE TO HOMES
BUSINESSES AND COMMUNITIES. THE
KEY FACTOR IN THIS MISSION IS A
RECOGNITION THAT THE RISK MUST
BE MEASURED IN ORDER TO BE
MANAGED. COMPANY SHOULD BE ABLE
TO USE THE MOST RELEVANT TOOLS
AVAILABLE TO DEVELOP ACTUAR
EARLY SOUND RATES. CURRENTLY
THE STATE OF CALIFORNIA IT'S
INSURANCE REGULATIONS REFLECTED
DATED UNDERSTANDING ABILITY OF
ANALYTICAL TOOLS SUCH AS
CATASTROPHE MODELS. WHAT
EARTHQUAKE MODELS CAN BE
CONSIDERED AN RATE MAKING. ARE
A POSITIVE OUTCOME FOR THE
NORTHRIDGE EVENT. MODELS FOR
WILDFIRE AND OTHER PARENTS ARE
CURRENTLY NOT ALLOWED THIS
INTRODUCES AN INCONSISTENCY
BETWEEN VARIOUS UNDERWRITING
AND RATING ACTIVITIES OF
INSURERS IN THE RELATED
DOWNSTREAM ASSUMPTION OF RISK
BY OTHER ENTITIES. WE RECOMMEND
AN APPROACH THAT CONSIDERS THE
FULL RANGE OF RISK MANAGEMENT
TOOLS RECOGNIZING THAT THIS CAN
BE DONE WILL STILL PROTECTING
CONSUMER RATE IS CONSUMER
RIGHTS AS IS DONE IN MANY OTHER
STATES. WE LOOK FORWARD TO
CONTINUING THE DISCUSSION ON
USING THE BEST SCIENCE
AVAILABLE- THE BEST SCIENCE
AVAILABLE TO ASSESS WILD VIRUS.
PLEASE LET US KNOW HOW A. I. R.
COULD BE HELPFUL RESOURCE TO
THE STATE IS TO MOVE FORWARD IN
BUILDING MORE RESILIENT
CALIFORNIA. THANK YOU THANK YOU
DO YOU HAVE ANYTHING ELSE TO
SHARE I DON'T THINK I THANK YOU
MEMBERS ANY QUESTIONS. MR LOOK
UP. THANK YOU MADAM CHAIR AND
I'VE GOT TO LEAVE IN FIVE
MINUTES SO I'M GONNA JUMP IN
WITH THIS QUESTION SO I GUESS
WILL DESCRIBE YOU AS THE MOTHER
SHIP. OF THE INSURANCE INDUSTRY.
RIGHT YOU ENSURE THE INSURANCE
COMPANIES YOU GIVE THEM. THE
BENEFIT AND THE RESOURCES. TO
BE ABLE TO COME INTO
CALIFORNIA. AND DO WHAT THEY DO
FOR US ENSURE THE HOMEOWNERS.
SURE THE INDUSTRIES THAT WE
ALL. OF LOVE AND GET OUR HEARTS
BECAUSE WE ARE THE FIFTH
LARGEST ECONOMY IN THE WORLD.
SO WITH THAT IN MIND ARE YOU-
ALSO THINKING THAT- OFFSETTING
SOME OF THESE COSTS. IN IN SOME
OF THE AREAS THAT ARE NOT
AFFECTED BY WATER FIRE- WHERE
THEY DON'T HAVE A HISTORY WILD.
IN MOVING THOSE CAUGHT UP HOW
ARE YOU GOING TO OFFICE THAT IN
PROTECT YOUR INSURANCE
COMPANIES. WHICH WE CAN BETTER
SERVE US. OKAY SO THE FIRST I'D
LIKE TO START BY SAYING THAT-
REINSURERS TAKE THEIR ANTI
TRUST. OBLIGATIONS VERY
SERIOUSLY AND THEY DO NOT DO
NOT I MEAN WE SAW AT EVERY
MEETING WITH AN ANTI TRUST
REMINDER- WE DO NOT DISCUSS
PRICING BETWEEN OURSELVES- SO.
WE ARE NOT DOING THAT SO I WILL
TALK GENERAL GENERAL ECONOMIC-
CONCEPTS AND HOW MY
UNDERSTANDING IS OF. ABOUT THE
INSURANCE PORTFOLIO MANAGEMENT
THEORIES- SO. TYPICALLY WHEN
INSURANCE IS. RIGHT A BEST OF
WE JUST TAKE A STEP BACK- WE
ARE ALSO- TO CERTAIN EXTENT I
HAVE TO DISAGREE WITH THE
MOTHER SHIP COMMENT BECAUSE
MANY OF THE- INSURANCES ARE
BIGGER THAN TO RE ENTERS. SO
THAT THEY'RE THEY'RE JUST
PROTECTING THEIR- YOU KNOW
THEIR BUSINESS BUT THERE THAT
THEY'VE BEEN WRITING SO MANY
POLICIES ACROSS THE COUNTRY.
THERE THEY HAVE THE
POTENTIALITY OF WHAT I CALL
SPIKE LOSSES THAT. FAR EXCEED
THEIR- THEIR EXPECTED LOSSES
AND THEIR RISK TOLERANCE SO
THEY'LL BUY REINSURANCE TO HELP
THEM MANAGE THEIR BOOK
BUSINESS. AND AS REINSURER IS
WHAT MY MEMBERS TO IS BECAUSE
THERE IT'S A GLOBAL BUSINESS
THEY BUILD A PORTFOLIO OF RISK
WHICH TRIES TO RIGHT.
CALIFORNIA EARTHQUAKE
CALIFORNIA WILDFIRE SOUTHEAST
UNITED STATES WIND EXPOSURE
NORTHEAST UNITED STATES WIND
EXPOSURE THE NEW MADRICK FAULT
EARTHQUAKE JAPAN EARTHQUAKE
JAPAN WINDSTORMS THE PACIFIC
EVERYTHING THAT COULD GO WRONG
THAT WE WRITE CHILE WE WRITE
AUSTRALIA WE WRITE EVERYTHING
AND WHAT WE DO IS WE TRIED TO
COLLECT ENOUGH PREMIUM. TO PAY
FOR LOSSES THAT MAY OCCUR. AND
TO PAY FOR EXPENSES AND THEN
HAVE A REASONABLE EXPECTATION
OF PROCESS SO INSURANCE IS
BASED UPON THE THEORY THAT BAD
THINGS DON'T HAPPEN TO
EVERYBODY AT THE SAME TIME SO
WE TRY TO CREATE A POOL OF
RISK. THAT FOR NEXT YEAR WILL
GIVE US A REASONABLE
OPPORTUNITY TO HAVE PROFIT IT'S
NOT THAT WE'RE SAYING I'M GOING
TO CHARGE CALIFORNIA EXTRA- SO.
IT AND USE. AND MAKE MONEY IN
JAPAN THAT'S TRUE THIS IS THE
FREQUENTLY IT. THE FACT THAT IN
THE UNITED STATES BECAUSE OF
THE VALUES THAT WE HAVE HERE-
PEOPLE ARE TRYING TO GET OTHER
RISKS TO BALANCE IT OUT SO
HEADS- IS COMPETITIVE MARKET
AND- TO THE EXTENT THAT WE IN
THE REINSURANCE INDUSTRY
ATTEMPT TO GET A LARGER THAN
APPROPRIATE- PROFIT OPPORTUNITY
THE CAPITAL MARKETS CAN COMMAND
VERY EASILY- THE SEATING
INSURANCE WHICH IS WHAT WE CALL
THEM. THE INSURANCE COMPANY
USES WHAT YOU CALL THEM THE
THEY USE A- THE EQUIVALENT OF
AN AGENT IS CALLED THE RE
INSURANCE BROKER. AND THEY WILL
GO OUT AND- IF COMPANIES A
REINSURANCE COMPANY A WANTS TO
CHARGE TOO MUCH THEY'LL GO AND
FIND OTHER PEOPLE TO REPLACE
THEM ON THE BUT ON THE PROGRAM.
THANK YOU THANK YOU MEDICARE.
TO ASK QUESTIONS. WITH ONE
THANK YOU MADAM CHAIR I AM
REMINDED LISTENING- ON
REINSURANCE FOR INSURANCE IN IN
ROMAN TIMES- AT THE PORTS- THE
INSURANCE COMPANIES WOULD HAVE
BEEN BENCHES AND THEY WOULD
INSURE CARGO AND IF THE SHIP
DIDN'T COME BACK THEN THE
INSURANCE COMPANY WOULD HAVE TO
PAY THE MERCHANTS THAT LOST
THEIR GOODS IF THE INSURANCE
PROVIDER COULD NOT THEN THEIR
BENCH WAS BROKEN AND WHERE THEY
WERE NOT PERMITTED TO TRANSACT
ANY MORE BUSINESS- AND THAT'S
WHERE WE GET THE TERM BONTA.
RECTUS BANKRUPTCY. AND SO WE
HAVE FISCAL TOOLS IN PLACE THAT
WE HAVE TO BE VERY MINDFUL AND
CAREFUL OF AN ANTI AND WE HAVE
RESIDENTS THAT ARE TRYING TO.
FIND INSURANCE AND SO WE'VE GOT
TO STRIKE A BALANCE WHERE. YOU
GET A FAIR COMPENSATION AND OUR
TAXPAYERS. PROTECT THEIR MOST
IMPORTANT ASSET THEIR HOME- SO.
HOW WOULD YOU. HELP ME TO
COMMUNICATE TO MY CONSTITUENTS
WHAT WHAT WE'RE DOING. WELL.
ONE OF THE ONE OF THE THINGS
THEY DID DID PREVIOUSLY- TO
RESOLVE BUT AN ISSUE AND I
WOULD NOT ENCOURAGE YOU TO GO
TO AND THAT THIS PAST BUT WE
NEED YES THERE THE CRISIS
BECAUSE THEY WERE FAR AWAY FROM
THE CRISIS THAT WE HAD AFTER
THE NORTHRIDGE EARTHQUAKE- NEAR
THE LEGISLATURE FORM THE
CALIFORNIA EARTHQUAKE AUTHORITY
AND THE REINSURANCE INDUSTRY IS
WHAT MADE THAT WORK. NOW WE
BACK THE EARTHQUAKE AUTHORITY
WHEN IT HAD A LOT OF RISK AND
VERY LITTLE MONEY AND WE
CONTINUED BACK IS- SO. ONE IT A
WE ACTUALLY ARE PART OF MAKING
INSURANCE AVAILABLE WHETHER
IT'S THROUGH GOVERNMENT
FACILITIES OR THROUGH THE
PRIVATE MARKETS- ALSO TO THE
EXTENT THAT. REINSURANCE DID
NOT EXIST INSURERS WOULD NOT
EAT WITH THESE IT NOT BE ABLE
TO WRITE AS MUCH BUSINESS OR
WOULD HAVE TO HOLD A LOT MORE
CAPITAL THAN THEY DO TODAY. AND
THEN BECAUSE- WHERE A PROFIT
DRIVEN. ECONOMY IF THEY HAVE TO
HOLD TWICE AS MUCH CAPITAL YOU
KNOW THERE INVESTORS ARE GOING
TO WANT TO RETURN ON CAPITAL-
AND THAT CAPITAL IS IN USE ALL
THAT FREQUENTLY. THE
REINSURANCE INDUSTRY. BECAUSE
WE TAKE RISK ALL. IN WHAT I
CALL PEAK RISKS ALL BAD OF EACH
EGION AND EACH. CATASTROPHIC
PERIL WE USE OUR CAPITAL MORE
EFFICIENTLY THAN THEM WHICH
ENABLES THEM TO USE THEIR
CAPITAL MORE EFFICIENTLY AS
WELL. THANK YOU THANK YOU
ACTION. THEY KILL AND I WANT TO
THANK YOU FOR COMING JUST TO
SHARE A LITTLE BIT- WITH US I
KNOW THAT I'VE LEARNED A LOT
FROM FOR ME PRIVATELY AND I
WANTED EVERYONE TO IT TO HEAR A
LITTLE BIT ABOUT WHAT YOU DO SO
THANK YOU SO MUCH FOR COMING.
UP AT THIS POINT OUT YOU KNOW
WE'RE GOING TO CONCLUDE AND
WE'RE GOING TO MOVE ON TO
PUBLIC COMMENTS THANK YOU SO
MUCH ALL OF YOU FOR SHOWING UP.
SO AT THIS POINT ANYBODY
WISHING TO SPEAK AND PLEASE
COME UP TO THE MIKE AND DIE
WILL ASK THAT YOU KEEP YOUR
COMMENTS BRIEF STATE YOUR NAME
AND- YOUR COMMENT. THANK YOU.
THANK YOU. WHAT WAIT FOR THE- I
MAY BE LOUD BUT- OKAY WE GET
GOOD TO GO THANK YOU HI MY NAME
IS AMY BACH AND I'M HERE. ON
BEHALF OF THE NONPROFIT CALLED
UNITED POLICY HOLDERS WE ARE A
NATIONAL FIVE ONCE YOU THREE
THAT IS AN INFORMATION RESOURCE
AND A VOICE FOR INSURANCE
CONSUMERS SO WE ARE- WORK VERY
CLOSE TO THE GROUND WE WERE
AROUND AFTER THE OAKLAND FIRE
WE STARTED IN NINETY ONE. AND
ONE OF THE FIRST CHALLENGES
THAT WE ENCOUNTERED AFTER THAT
DISASTER WAS THAT A LOT OF
PEOPLE STARTED GETTING DROPPED
IN ON RENEWED BY THEIR INSURERS
WE REALIZE OKAY SO THE SEVERITY
OF THAT AT THAT TIME IT WAS I
THINK THE LARGEST URBAN
WILDFIRE AND HID IT COST
INSURERS PRETTY PENNY AND HIGH
LEVEL EXECUTIVE NOTICED AND
SURE ENOUGH THEY SAID WE
BETTER- WE BETTER MAYBE ADJUSTS
SOME OF OUR- OF OUR CUSTOMER
BASE IN THAT AREA. AND WE ARE
MY ORGANIZATION GOT TOGETHER
WITH THE CITY OF OAKLAND WE
LAUNCH SOMETHING CALLED MATCH
UP AND WHAT WE DID AT THE TIME
WAS JUST FIND VERY PROACTIVE
INDEPENDENT INSURANCE AGENTS
WHO HAD MULTIPLE MARKETS AND
JUST CONNECTED UP WITH THE
CONSUMER AND THEN THE PEOPLE
ARE ABLE REPLACE COVERAGE ON
THE CRISIS WENT AWAY. THAT WAS
A REALLY IN LESS TO UP ON. HOW
THE- HELL A LARGE GUITAR. CAN
CAUSE AND- TO HAVE A PATH. REAR
AND SO SINCE THAT TIME OVER
THESE YEARS WE'VE HAD THE
OPPORTUNITY. TO HELP SOLVE SORT
OF THESE MICRO PROBLEMS AND
THEN WHEN THE TREE MORTALITY
CRISIS HIT IN TWO THOUSAND.
SIXTEEN WE HAD TO GET INVOLVED
AGAIN- IN AGAIN LOOKING FOR
SOLUTIONS AND OUR ORGANIZATION
PUTS OUT A COUPLE PUBLICATIONS.
THAT YOUR CONSTITUENTS CAN USE
ONE CALLED DROP BY OR SURE
WHERE TO GO FOR HELP IN
CALIFORNIA. TEACHING PEOPLE HAD
IT IN THE HERE AND NOW HOW TO
FIND WHATEVER OPTIONS MAY BE
OUT THERE FOR THEM. EITHER IN
THE ADMITTED NOT ADMITTED OR
THE FAIR PLAN MARKET WE ALSO
HAVE SOME TIPS ON THE FAIR
PLAN. THAT WE POLISHED WITH
SOME HELP FROM THE FAIR PLAN
THEMSELVES TO MAKE SURE. THAT
IT WAS IS AS SIMPLE AND CLAIM
BUT I THINK AMY WHAT HAVE JUST
WRAPPING UP HERE TO WRAP UP
HERE OBVIOUSLY- WE DO HAVE A
BIG PROBLEM. WE DO NEED SOME
COOPERATION FROM ALL SIDES OF
WE'RE NOT GOING TO BE ABLE TO
RIDE THIS ONE OUT IT'S JUST NOT
POSSIBLE. AND YOU YOU KNOW THIS
FROM YOUR CONSTITUENTS AND FROM
THE REALTORS IN YOUR DISTRICTS.
SO WHAT DO WE NEED YOU HEARD
MARK A MARTINEZ ARTICULATE.
ALMOST EXACTLY WHAT MY
ORGANIZATION HAS BEEN ADVANCING
HERE WHICH IS THE MITIGATION
PLAN BECAUSE CALL ME A CHRONIC
OPTIMIST WE HAVE TO DO
SOMETHING WE KNOW. THAT YOU'RE
A I G. AND USA ARE ALREADY
ACKNOWLEDGING THAT WE'RE NOT
HELPLESS THERE ARE THINGS YOU
CAN DO TO MAKE IT LESS LIKELY
FOR A HOME TO BURN. THEY ALL
RIGHT. THE IS THEIR CUSTOMERS
AND REWARD THEIR CUSTOMERS SO
THIS BODY NEEDS TO FIGURE OUT.
THE CORE OF THE PROBLEM WHAT IS
THE REWARD THAT THE HOMEOWNER
GAS AND THAT IS THE TRICKY
PART. THEY GET. TO BE TO KEEP
THEIR INSURANCE DO THEY GET IF
THEY'RE ALREADY INSURED. CAN'T
DO THEY HAVE THE RIGHT TO BUY
INSURANCE FROM SOMEBODY OTHER
THAN THE FAIR PLAN OR DO THEY
GET A PREFERRED ROUTE LIKE A-
GOOD. FOR JUST. TO FOR THE
CONYERS. A YOU'RE GOING TO
IMPOSE SOME SORT OF MANDATE ON
INSURANCE THEY'RE NOT GOING TO
COME TO INVOLVE. AND STATE.
THAT IS HOW THIS. HER STAY.
EVEN THE RED. HAVE HAD JIM SOME
SORT OF MANDATORY MEDICATION.
RECALL THAT REQUIREMENT THAT
THE INSURERS RECOGNIZE IT AND
GIVE THE HOMEOWNER SOME KIND OF
REPORT THANK YOU THANK YOU FOR
YOUR COMMENTS NEXT. GOOD
AFTERNOON STACY HIT MORAL
COUNTY REPRESENTATIVES OF
CALIFORNIA REPRESENTING THIRTY
SEVEN RURAL COUNTIES- STATEWIDE
AND MANY OF THE FOLKS THAT ARE-
GOING THROUGH THESE NON
RENEWALS ARE IN OUR MEMBER
COUNTIES AND SO WE HEAR ABOUT
THIS EVERY DAY FROM OUR BOARD-
AND WE'RE NOW STARTING TO SEE
COMMERCIAL NON RENEWALS IN OUR
COUNTIES WE'VE GOTTEN CALLS
FROM NEVADA COUNTY THEY'RE
SEEING. A COMMERCIAL INSURANCE
NON RENEWALS AND THE REASON
BEING YOU KNOW HIGH FIRE RISKS
SO IT'S NOT JOSS HOMEOWNERS
INSURANCE ANYMORE IT'S CREEPING
INTO COMMERCIAL INSURANCE THIS
HAS BEEN ONE OF THE SINGLE IT'S
FRUSTRATING PROBLEMS THAT WE
RUN UP AGAINST IT IN MY MEMORY
WITH RC RC. BECAUSE IT DOESN'T
LIKE THERE'S ONE GOOD SALUTE
AND WE'VE TRIED TO WORK WITH
ALL SIDES OF THE ISSUE. WE'VE
EVEN ARE A NINE MEMBER HOT AS
SUB COULD OF OUR BOARD TO TRY
TO SEE WHAT LOCAL GOVERNMENTS
CAN DO FOR COMMUNITY WIDE
MITIGATION AND ENFORCING.
VINCE'S ON A DEFENSIBLE. I'M
HARDLY A HOW CAN HELP CAN HELP.
AND YOU KNOW WE JUST CAN TO DO
PART AND WORK WITH ALL SIDES
AND WE'RE HOPING THAT AS WE
LOOK AS LISTEN TO THE
TESTIMONY TODAY AND- IT STILL
FEELS LIKE. THE DEPARTMENT AND
THE INDUSTRY AR FAR APART ON
WHAT THEY THINK SHOULD BE DONE.
BUT MAYBE WILL REACH SOME
CRITICAL MASS WHERE WE CAN
FINALLY GET SOMETHING ROLLING
WHERE EVERYBODY STARTS WORKING
TOGETHER ON SOME REAL
SOLUTIONS. BECAUSE IT'S OUR
RESIDENTS THERE GETTING CAUGHT
IN THE MIDDLE OF ALL OF THAT
SO- WE THANK YOU FOR YOUR TIME
IN HAVING THIS HEARING AGAIN
TODAY AD WE'RE HOPING THAT. WE
CAN ALSO HELP BE PART OF THE
SOLUTION THANK YOU. THANK YOU
FOR YOUR COMMENTS. HELLO MY
NAME IS PHIL- WHEN I ACTUAR TWO
HATS- ONE I'M THE PUBLIC
RELATIONS REPRESENTED FOR THE
CALIFORNIA FAIR PLAN. SO HOLD
MOST MY COMMENTS THAT AS YOU
INDICATED WILL BE. AT THE NEXT
MEETING WILL BE DIGGING DEEPER
INTO THE FAIR PLAN. QUESTIONS
IN AND THE OTHER HOW TO WHERE I
AS I AM A AGENCY OWNER
INSURANCE AGENCY OWNER IN- EL
DORADO COUNTY. SO I'M HERE. OF
THIS BEAST VIEW COMMENTS ON
THAT. THE FIRST OFFER THE IS
FOR THE FAIR PLAN I JUST WANT
TO. ACKNOWLEDGE THAT THERE ARE
NO DO THE COMMENT WAS MADE. OF
A DOUBLE EXT. DOUBLE PAYING-
DOUBLE EXPENSE LOW THERE IS NO
LOAD. SO THAT THAT'S NOT A
FACTOR AND THE REALITY IS THAT.
THE ROLE OF THE FAIR PLAN IS
PLAYING IS FEELING THE NEED
THAT IT'S DESIGNED FOR TODAY.
THERE'S HUGE BENEFITS FOR THE
CONSUMERS. TO HAVE THE D. I. C.
POLICIES WITH THE CARRIERS THAT
OFFER THEM. THEY GET. BIG
DISCOUNT ON THEIR AUTO
INSURANCE THE AVAILABILITY OF
EXCESS- LIABILITY UMBRELLA
POLICIES- AND- MULTIPLE
ENDORSEMENTS ARE AVAILABLE.
WELL BEYOND JUST LOOKING AT THE
LIABILITY COMPONENT THAT THAT
CONTINUES TO BE. TO BE BROUGHT
UP. ARM AS AS AN AGENT I CAN
SAY. IN THE PAST FOURTEEN
MONTHS OR SO WHEN THIS REALLY
THIS CRISIS REALLY. ERUPTED I-
HAVE QUOTED OVER A THOUSAND.
CONSUMERS INSURANCE THAT ARE IN
THE- CIRCUMSTANCE THAT HAVE HAD
TO BE WITH THE FAIR PLAN. IN A
DEEP I SEE ONE OF THE AS HE
POLICIES. AND THERE'S A ONE
PERSON AT A OR OR BUSINESS THAT
I HAVE BEEN ABLE TO OFFER A- A
SOLID QUOTE FOR. THE P. IS.
ALTHOUGH WE ARE. IN A TOUGH. I
SEE GOOD NIGHT KNOWING THAT MY-
ARE. OF POP. FEATURED WITH THE
PRODUCTS OF WILL TO AND- PLAY.
KEEP GIVE HER. ARMALITE ALSO IN
A- ARE. MOSTLY OF ELDER I
COUNTY BUT WE ALL THIS IS KIND
OF OUR- SO HARD TO PLACE
HOMEOWNER INSURANCE ACROSS
CALIFORNIA. COLORADO ALL OF THE
HIGH FIRE AND SORT OF AREAS.
THE ONE THING THAT I SAW DURING
THIS IS THESE CHARTS SHOW AN
AVERAGE ACROSS CALIFORNIA BUT
WHAT THEY DON'T DO A SHOW YOU
THE SNAPSHOT OF WHAT'S
HAPPENING TO THE RURAL
COMMUNITIES. SO WE LOOK AT JUST
MY BOOK OF BUSINESS WITH
CALIFORNIA FAIR PLAN. IT IS NOW
THE LARGEST OF PROPERTY INSURER
WITHIN MY AGENCY THAT SHOULD
NOT BE THE CASE. THE AVERAGE
HOMEOWNER IN THESE REGIONS ARE
PAYING ACTUALLY ABOUT FOUR
THOUSAND DOLLARS A YEAR FOR THE
HOMEOWNERS COSTS. PREVIOUS TO
THAT AND THE- LIKE SACRAMENTO
AREAS WERE LOOKING AT MORE LIKE
EIGHT HUNDRED DOLLARS A YEAR.
SO THE GAP IS EXTREME BETWEEN
THOSE AREAS AND IN THE WILD
LAND AREAS BUT IT'S NOT BEING
ACCOUNTED FOR IT IS NOT BEING
ASSESSED TO. THAT IMPACT. AS
WELL AS IF WE LOOK TO EL DORADO
COUNTY THEY ACTUALLY HAVE THE
LEAST AMOUNT OF FIRE PROTECTION
ACROSS THE OTHER COUNTY SO
THEY'RE PAYING HIGHER
PERCENTAGES. IT'S CAUSING THIS
REAL ESTATE MARKET ACTUALLY
DECLINE OR SEEN THE LOSS OF
REVENUE ALREADY START TO AFFECT
THESE REGIONS. AND AT
ULTIMATELY IS GOING TO AFFECT
THE FIRE STATIONS THERE AND IS
GOING TO PERPETUATE THIS IF WE
DON'T START TO SEE SOMETHING
CHANGE. SO WHAT WE HAVE REALLY
BEEN FOCUSING ON UP THERE IS
FIRE WEIS COMMUNITIES TO HELP
THESE MEDICATIONS I WORK VERY
CLOSELY WITH THE INSURANCE
COMPANIES. ON WHAT THEY'RE
GOING TO NEED TO COME BACK AND-
THE MEDICATION IS A VERY STRONG
THING FOR THEM THE FIRE WEIS
COMMUNITIES THE HOME HARDENING.
BUT WE DON'T HAVE A GOOD CLEAR
PATH FOR THESE COMMUNITIES ON
HOW TO STRUCTURE THE FIRE WHY
IS. WHAT THE INSURANCE
COMPANIES ARE GOING TO ACCEPT
AND TO STANDARDIZE THAT UNTIL
WE HAVE THAT. UNTIL WE HAVE
THAT STANDARDIZATION AND THE
STANDARDIZATION AND WHAT WILD
FIRE IS. WE'VE DEFINED IT FOR
FEMA WE DEFINE IT FOR FLOOD IF
WE HAD A CLEAR DEFINITION OF
WILD FIRES IN THESE INSURANCE
COMPANIES CAN ACTUALLY AS- WE
NEED TO WRAP UP THE COMMENTS
YOU HAVE A- FEW MORE SECONDS
PLEASE THANK YOU. THAT THAT'S
THE MAIN THING THEY'RE LOOKING
AT IS THE INSURANCE COSTS AND
ALSO THAT WHILE FIRE TO. BEING
ABLE TO BE A- WHERE THEY CAN
STAND UP IN COURT AND CLEARLY
DEFINED NOT TO ALLOW SOME THAT
RESTRUCTURING TO COME INTO
PLACE. THANK YOU FOR YOUR
COMMENTS AS WE MOVE FORWARD WE
NEED TO KEEP THE COMMENTS A
LITTLE BIT MORE BRIEF THANK
YOU. HI MY NAME IS LAUREN
HERNANDEZ AND FROM A DAUGHTER
COUNTY DEMOCRATIC PARTY. AND
I'M JUST WANTED TO COMMENT THAT
THERE WAS A LOT OF DISCUSSIONS
TODAY ABOUT SOME KIND OF
TIERED. RISK MODELING AB OFFSET
WITH MITIGATION STANDARDS FOR
EACH TIER LEVEL OF RISK WE'RE
NOT REINVENTING THE WHEEL HERE
THERE ARE PROPOSALS THERE'S
MODELS. THE FORTIFIED HOME
PROGRAM THAT'S USED IN THE HIGH
WIND GULF REGIONS EXPOSED TO
HURRICANES. CAL FIRE WORKING
WITH I. B. H. AS HAS DEVELOPED
PROPOSAL WAS SUBMITTED TO THE-
THE TREE MORTALITY TASK FORCE.
WITH RECOMMENDATIONS I'M NOT
SAYING THAT THAT'S WHAT IT
NEEDS. THAT EXACTLY WHAT THEY
RECOMMENDED IS WHAT NEEDS TO BE
ADOPTED BUT- THERE'S ALREADY.
BEEN DACIANS PROPOSALS OUT OF
AN OUT THERE WE'RE NOT
REINVENTING THE WHEEL BUT LIKE
MANY OF SAID THESE COMMUNITIES.
LIKE MINE. FACING NEIGHBORS AND
SENIORS WHO ARE. NOT SURE HOW
THEY'RE GOING TO BE ABLE TO
KEEP THEIR HOME- IT'S REALLY
CONCERNING AND A LOT OF
FRUSTRATIONS IN OUR COMMUNITY
PARTICULARLY FROM OUR POLITICAL
PARTY IN. AND THE LACK OF
INVESTMENT FOR A LOT OF THIS
HAS IT'S ALL CONNECTED TO LOCK
OF INTEREST. INVEST IN OUR- OUR
ROLE. AND PAST FOR. OUR EXIT
WAYS IN OUR WATER RESOURCES AND
OUR TELECOMMUNICATIONS PEOPLE
CAN EVACUATION THESE KIND
SAFETY MEASURES THAT. LACK
BASSMAN THESE COMMUNITIES. IS
AND THESE BURDENS ARE JUST
DOUBLING COMPOUNDING AND THAT'S
JUST REALLY FRUSTRATING FOR US
AND WE WANT TO BE A VOICE AND
WE WANT TO BE EFFECTIVE. WITH
WORKING UPALL OF YOUR ON
SOLUTIONS THANK YOU THANK YOU
FOR YOUR COMMENTS. MADAM CHAIR
MEMBERS JOHN NOR WOULD I BEHALF
OF THE INSURANCE AGE SOME BROKE.
OF CAL. AS WELL AS CA FORCED
INSURANCE. IF YOU COUPLE
COMMENTS ON HOUSING IN THE
COMMERCIAL. SIDE OF THINGS NOW
I E. HOTELS MOTELS RECREATIONAL
FACILITIES AND SUMMER CAMPS ALL
OF WHICH ARE IN THE MOVIE-
WE'RE GETTING MORE MORE. INPUT
FROM OUR AGENTS AND BROKERS
THAT- THESE FACILITIES ARE
UNDERGOING A MAJOR PROBLEMS
WITH. TRYING TO GET INSURANCE
WITH INSURANCE INCREASES- ONE
OF THE SOLUTIONS WE TALK ABOUT
IN YOUR- UPCOMING HEARING IS
PERHAPS. HAVING THE FAIR PLAN
RIGHT HIGHER COMMERCIAL
INSURANCE- LIMITS I THINK RIGHT
NOW THE COMMERCIAL INSURANCE
LIMITS ARE. THREE MILLION AND
MAYBE GOING TO FIVE OR SEVEN OR
TEN MILLION COULD BE OF
ASSISTANCE. THERE ARE ON THE
SUMMER CAMP AREA THERE'S OVER
FOUR HUNDRED SUMMER CAMPS A
RESIDENTIAL CAMPS ALL OF THE
STATE OF CALIFORNIA FROM.
NORTHERN CALIFORNIA THE TAHOE
TO THE SANTA. CRUZ MOUNTAINS-
OF MONO LAKE PAYER THOSE KINDS
OF THINGS THEY'RE ALL RIGHT NOW
MOSTLY WRITTEN IN THE NOT IN
THE MARKET. ARE ALL SEEING
THEIR- INSURANCE EITHER CANCEL
AGO UP 300-500-1000 PERCENT. WE
DO HAVE A THE PHONE COMPANY
THAT HAS INNOVATIVE IDEAS OR TO
BE TALKING TO THE DEPARTMENT
ABOUT. THAT MAY PAVE THE WAY
FOR OTHER COMPANIES TO. OTHER
COMPANIES COME IN RIGHT THIS
COVERAGE AS WELL THESE ARE ALL
PRIMARILY ON BY. NONPROFIT
GROUPS BOYS GIRLS CLUBS
RELIGIOUS INSTITUTIONS AND I
JUST CAN'T HANDLE THOSE KINDS
INCREASES. FOR WE LOOK FORWARD
TO CONTINUING THE DISCUSSION.
THANK YOU FOR YOUR COMMENTS.
THAT HAVE MADAM. MY NAME IS AN
BACK IN I'M HERE ON BEHALF OF
THE- ASSOCIATION OF REALTORS I
WAS NOT GOING TO GET UP TODAY.
BUT I FELT COMPELLED TO SPEAK-
BECAUSE OVER THE LAST COUPLE
YEARS AS THIS ISSUE. HAS COME
TO A HEAD- CERTAIN GROUPS HAVE
BEEN INVOKING THE NAMEOF THE
REALTORS AND I WOULD LIKE TO
LET EVERYBODY KNOW THAT WE ARE
PERFECTLY CAPABLE OF SPEAKING.
FOR OURSELVES ON THIS ISSUE AND
WE ARE EXTREMELY CONCERNED. AND
WE LOOK FORWARD TO FINDING
SOLUTIONS- WITH LEGISLATURE
THANK YOU. THANK YOU FOR YOUR
COMMENTS. HELLO MY NAME IS GLEN
BROWN ON THE FIRE CHIEF THE
GEORGETOWN CALIFORNIA FIRE
DEPARTMENT IN ELDORADO COUNTY-
I WAS REALLY HOPING SOMEBODY
ELSE FROM THE FIRE SERVICE
WOULD STAND UP- BECAUSE I'VE
ONLY BEEN IN CALIFORNIA FOR
FIVE MONTHS. I SPENT THE
MAJORITY OF MY THIRTY SIX YEAR
CAREER IN ARIZONA. BUT I WANTED
TO BE HERE AS THE FIRE SERVICE
REPRESENTATIVE TO OFFER TO
ANSWER ANY QUESTIONS YOU MIGHT
HAVE. BUT I ALSO WANTED TO TALK
IS A CUSTOMER AS A CITIZEN- I
RECENTLY PURCHASED ACREAGE IN
IN- GEORGETOWN- I'VE BEEN A
FORTY TWO YEAR CUSTOMER OF
STATE FARM AND I'M NOT TELLING
STATE FARM UNDER THE BUS BUT I.
CALLED A LOCAL REPRESENTATIVE
AND GAVE HIM MY ADDRESS AND HE
SAID WE CAN INSURE YOU. AS WELL
WHAT IF I. CLEARED COMPLETELY
CLEARED MY ENTIRE PROPERTY AND
BUILT A CONCRETE BUNKER IN THE
MIDDLEOF IT DON'T MATTER. YOUR
ADDRESS WE CAN'T INSURE. SO ONE
OF THE THINGS WE'VE SEEN ONE
THING FOR TALKING ABOUTAND EL
DORADO COUNTY JUST PAST AN OLD-
VEGETATION MANAGEMENT ORDINANCE
AND WE'RE- THE FIRE CHIEF SIR.
ARE WORKING TOGETHER ON ON-
ENFORCING THAT. BUT THE
INDIVIDUAL PROPERTIES ARE NOT
BEING LOOKED AT AS INDIVIDUAL
PROPERTIES AND WHAT IS THE-
PROTECTION WHAT WHAT KIND OF
WILDLAND URBAN INTERFACE WHAT
KIND OF PROTECTION TO THE- THE-
CONSUMERS PUT INTO THEIR OWN
PROPERTIES. THEY'RE BEING RATED
AS AN OVERALL WHATEVER THAT
AREA IS AND IT DOESN'T MATTER
WHAT WE DO LOCALLY. SO I DON'T
KNOW IF THERE'S IF THERE'S ANY
WAY TO DO THAT BUT IF WE COULD
LOOK AT INDIVIDUAL PROPERTIES.
AND THEN AGAIN I JUST OFFER
MYSELF UP AS A FIRE SERVICE
REPRESENTATIVE IF ANYBODY HAS
ANY QUESTIONS ABOUT FIRE
SERVICE. THANK YOU FOR YOUR
SERVICE AND THANK YOU FOR YOUR
COMMENTS. I'M AT THIS TIME AND
THERE IS NO OTHER INTEREST
WE'RE GOING TO WRAP UP THIS-
COMMITTEE KERRY BUT I'VE I WANT
TO THANK EVERYONE THAT CAME TO.
TO SPEAK HERE TODAY THE
PANELISTS CLEARLY WE HAVE A
VERY SERIOUS CONCERN HERE IN
CALIFORNIA AND DOWN. AS A SHIP
BEFORE THE WORKING GROUP HAS
BEEN DILIGENTLY WORKING TO OUR
WORK TOWARDS FINDING SOLUTIONS
AND THE INFORMATION THAT WAS
PROVIDED HERE REALLY DOESN'T
FORMER DECISION MAKING AND- AND
AGAIN THANK YOU TO THE
INSURANCE COMMISSIONER BECAUSE
I KNOW THAT HE'S BEEN TAKING
THIS. ISSUE VERY SERIOUSLY
TRAVELING UP AND DOWN THE
STATE- AND I KNOW THAT AT THIS
POINT I WANT TO CONTINUE TO ASK
THE INSURANCE COMPANIES AS WELL
AS- INSURANCE COMMISSIONER AND
EVERYONE ELSE TO COME TO THE
TABLE CONTINUE OFFER SOLUTIONS
AND- AND HOPEFULLY ARE THE GOAL
FOR US IS KEEPING CALIFORNIA
STATE SAVE MAKING SURE THAT WE
HAVE A STABLE MARKET. AND THAT
WE CAN COME TO. TO SOLUTIONS
THAT ARE VIABLE AND THAT
EVERYONE CAN. COULD GET ONBOARD
SO THANK YOU AGAIN AND I HOPE
YOU HAVE A WONDERFUL AFTERNOON.
BYE BYE.