THE SENATE INSURANCE COMMITTEE
WILL COME TO ORDER GOOD MORNING
THANK YOU EVERYONE FOR JOINING
US HERE TODAY FOR INDIVIDUALS
WISHING TO PROVIDE PUBLIC
COMMENTS TODAY PARTICIPANT
NUMBER IS. 877-226-8216 AND THE
ACCESS CODE IS. SIX TWO ONE
SEVEN ONE SIX ONE AS THE CITY
CONTINUES TO WELCOME THE PUBLIC
IN PERSON WE ALSO OFFER
TELECONFERENCE PARTICIPATION FOR
TODAY'S OVERSIGHT INFORMATIONAL
HEARING WE WILL BE HEARING BOTH
OF BOTH OF THE PANELS OF
WITNESSES ON THE AGENDA PRIOR TO
TAKING ANY PUBLIC COMMENTS ONCE
WE HAVE HEARD ALL OF THE
WITNESSES WE WILL HAVE A PUBLIC
COMMENT PERIOD. FOR THOSE
WISHING TO MAKE COMMENTS ON
TODAY'S AGENDA. WE'RE HERE TODAY
BECAUSE CONSUMERS CONTINUE TO
NEED OUR HELP THEY CONTINUE TO
NEED US TO TELL ADVOCATE ENSURE
THAT THEY'RE BEING PROTECTED AND
THAT WE LOOK AT SOME OF THE
CHALLENGES CURRENTLY FACING THE
INSURANCE MARKET. PROPERTY
INSURANCE IS NOT ALWAYS THE
FIRST THING PEOPLE THINK OF-
WHEN THERE ARE CLIMATE CHANGE
ISSUES IT'S NOT UNTIL AFTER
CATASTROPHE SO WE START
ASSESSING I WOULD WHAT'S
HAPPENING IN OUR HOMES IN OUR
COMMUNITIES AND THE LOSS OF
PROPERTY AFTER WE TAKEN STOCK OF
LIFE. YET AFTER WE OVERCOME SO
MANY OTHER CONCERNS- YOU KNOW
PEOPLE CONTINUE TO HAVE ISSUES
ONCE- AGAIN ONCE WE ASSESS THE
DEVASTATION OF ANY BOB WILDFIRE
A NEED- FLOOD WE NEED TO ENSURE
THAT PEOPLE HAVE ACCESS TO HOMES
THEY HAVE ACCESS TO FINANCIAL
RESOURCES AFTER THE FACT. OFFER
SOME PEOPLE INSURANCE MAY MEAN
THE DIFFERENCE BETWEEN HAVING A
HOME AFTER DISASTER OR BEING
HOMELESS AND I'VE HEARD
COUNTLESS STORIES OF INDIVIDUALS
STRUGGLING TO FIND. A HOME AFTER
THE FACT. AND INCREASINGLY THOSE
WHO LIVE IN DISASTER PRONE AREAS
ARE FACED WITH THE CHALLENGE OF
WHETHER THEY CAN KEEP THEIR
HOMES- AND I KNOW AS A TEACHER
ALSO WE TALK. I'VE TALKED TO
SOME FAMILIES WHOSE CHILDREN
SUFFER THE CONSEQUENCES OR
SOCIAL EMOTIONAL. IMPACTS AFTER
THE FACT WHEN YOU HAVE CHILDREN
BEING TAKEN FROM THEIR
COMMUNITIES NOT ABLE TO GO BACK
TO SCHOOL- HANG OUT WITH THEIR
FRIENDS OR TEACHERS EITHER
SIMPLE THINGS BUT BUT THEY
MATTER AND THE BIG SCOPE OF
THINGS. AND AGAIN WE'RE TRYING
TO ENSURE THAT WE CONTINUE TO
HAVE A CONVERSATION ABOUT
AFFORDABILITY AND AVAILABILITY.
IT'S SUCH AN IMPORTANT ISSUE TO
OF CALIFORNIANS. UNFORTUNATELY
THE CONVERSATION ABOUT THE
CHALLENGES IN THE INSURANCE
MARKET IN CALIFORNIA. THEY'RE
NOT HYPOTHETICAL WE CONTINUE TO
NOW SEE THAT- WE USED TO SPEAK
IN HYPOTHETICALS NOW WE HAVE
VERY SERIOUS EXAMPLES OF WHAT'S
HAPPENING ACROSS OUR STATE. AS
IT PERTAINS TO WILDFIRES FLOODS
OF THE SNOWPACK MELTING AND THE
ISSUES GO ON AND ON. SO TODAY WE
WANNA JUST TAKE STOCK OF SOME OF
THE CHALLENGES AND THE IMPACT TO
THE CONSUMERS ACROSS OUR OUR
STATE AND ANSWER A COUPLE
QUESTIONS. IN PARTICULAR WE NEED
TO KNOW HOW MUCH WORSE IS IT
GOING TO GOD AND WHAT OTHER
CHALLENGES WERE ARISE FROM. FROM
WHAT'S COMING AND AS WE NOW. ARE
MOVING INTO SUMMER WE KNOW THAT
YOU KNOW WE CONTINUE TO HAVE.
HOTTER AND HOTTER SUMMERS STAND
BY WILDFIRE SEASONS ARE LONGER
AND MORE DEVASTATING. SO WE NEED
TO TALK WITH SOME OF THESE
QUESTIONS AND ISSUES- THE
PURPOSE OF TODAY'S HEARING IS TO
DO OUR VERY BEST TO ANSWER NOT
ONLY THE QUESTIONS BUT- ENSURE
THAT. EVERYONE'S AT THE TABLE
THAT EVERY PERSPECTIVE IS TAKEN
INTO CONSIDERATION AND THAT
EVERYONE HAS THE ABILITY TO GIVE
US THEIR SIDE SO THEY WHICH WE
CAN COME TO THE TABLE AND
REALLY. BE OPEN MINDED ABOUT
SOME POSSIBLE SOLUTIONS THAT
THAT WILL HELP CONSUMERS THAT AT
THE END OF THE DAY THAT
CONSUMERS ARE AT THE HEART OF
WHAT WE DO HERE IN THE STATE OF
CALIFORNIA. AND AS A PERTAINS TO
INSURANCE. SO THANK YOU ONCE
AGAIN FOR ALL OF YOU BEING HERE
WE HAVE A LOT OF GREAT PANELISTS
THAT WILL GIVE US A LOT OF
INSIGHT. AND SO WE APPRECIATE
YOUR TIME. TODAY WE WILL ASSESS
AT ONCE AGAIN JUST CHALLENGES.
THAT ARE TRANSFORMING OUR DAILY
LIVES AND IN THE PROCESS ARE
PLACING. NEW DEMANDS ON THE
INSURANCE MARKET. AND OUR LAST
INFORMATION EXPERIENCE LIKE ME
SPENT A LOT OF TIME ON THE FOR A
PLAN AND WE HEARD SOME OF THOSE
CHALLENGES WE HEARD FROM THEM IN
PARTICULAR. SPEAK ABOUT HOW THEY
WERE SUPPOSED TO BE THE INSURERS
OF LAST RESORT. AND NOW THEY
BECOME COMPETITION AND EVERYONE
IS- USING THEM BECAUSE OF THEIR
INABILITY TO GET INSURANCE
SOMEWHERE ELSE. IN THE END OF
THE WEEK. COME OUT UP FROM THE I
BELIEVE IN MY PERSONAL OPINION
FROM THE LAST- INFORMATIONAL
HEARING WITH A LOT MORE
QUESTIONS THAN ANSWERS AND
THAT'S WHAT WE'RE HERE WE WANT
TO MAKE SURE THAT WE CONTINUE
THE CONVERSATION. TO MAKE SURE
THAT THAT WE CONTINUE TO TACKLE
THIS VERY IMPORTANT ISSUE. I AND
AFTER LISTENING TO SOME OF THE
GRAVITY OF THE CONCERNS RAISED
BY STAKEHOLDERS FROM ALL SIDES
LAST TIME. I CAME TO THE
CONCLUSION THAT WE NEEDED TO
STEP BACK A LITTLE AND JUST.
LOOK AT THE BIG PICTURE. AND
MAKE SURE THAT EVERYONE FEELS
INCLUDED AND HEARD AND THAT WE-
ALL LOOK AT. THE INFORMATION
BEING PRESENTED HERE TODAY WITH
AN OPEN MIND. I JUST BY LOOKING
AT ALL KEY MOVING PIECES
OBJECTIVELY I HOPE THAT WE CAN
ARM OURSELVES WITH. GOOD
INFORMATION THAT WILL HELP US
GET TO A BETTER PLACE. AS IT
PERTAINS TO TAKING CARE OF
CALIFORNIANS. SO TODAY WE WILL
HEAR FROM LEADING EXPERTS WILL
SHARE VALUABLE INSIGHTS. INTO
THE DIFFERENT COMPONENTS THAT
HELP SHARE. OUR CURRENT
INSURANCE MARKET IN CALIFORNIA
WE WERE HERE FROM HARVEY
ROSENFIELD. WAS AN ADVOCATE
WHOSE WORK TIRELESSLY ON BEHALF
OF CONSUMERS. OF WHO WAS ALSO
INSTRUMENTAL IN CHAO PASSED IN
THE GROUND BREAKING INITIATIVE A
PROP ONE OR THREE. IN NINETEEN
EIGHTY EIGHT. AND WHICH HAS
AGAIN WE HAVE TO GIVE CREDIT
WHERE IT'S DUE IS INSTRUMENTAL
IN KEEPING CONSUMERS FROM BEING
COUCHED. AND SAVING THEM
BILLIONS OF DOLLARS AND SO WE
APPRECIATE THE WORK THAT WAS
DONE BACK IN NINETEEN EIGHTY
EIGHT AND EVERYONE THAT WAS
INVOLVED IN THOSE EFFORTS. ARE
WE WILL ALSO HEAR FROM EXPERTS
WHO WILL SPEAK ABOUT THE AREAS
AND FACTORS THAT SEEM TO BE
HAVING. GREAT IMPACTS ON OUR
CURRENT INSURANCE MARKETING
CONSUMERS AS WELL AS-
REPRESENTATIVES OF OTHER
AFFECTED GROUPS AND SO ONCE
AGAIN WE HOPE THAT. THE VOICES
ARE DIVERSE FROM DIFFERENT
PERSPECTIVES AND THAT EVERYONE
TAKES AWAY. A LOT MORE
INFORMATION THAT. IMPORTANT
INFORMATION THAT THEY CAME IN
WITH SAYS WE LOOK FOR OUR-
SOLUTIONS HERE WE NEED TO REALLY
DISCUSS WHAT'S AT THE HEART OF
WHAT'S HAPPENING ACROSS NOT ONLY
OUR NATION BUT ACROSS THE WORLD
WHICH IS. THE TOPIC OF CLIMATE
CHANGE AND HOW IT CONTINUES TO.
TO CHALLENGE US TO THINK IN
DIFFERENT WAYS AND FIND
SOLUTIONS. THAT BEFORE AS YOU
KNOW I THINK YOU HEARD ME SAY IN
THE LAST HEARING THAT. WHEN WE
PASS PROP ONE OF THREE I DON'T
THINK CLIMATE CHANGE THE WORK
CLIMATE CHANGE WAS EVEN PART OF
OUR DAILY VOCABULARY AND IT HAS
BECOME. SO AGAIN YOU FOR ALL OF
YOU THAT ARE LISTENING AND I
JUST HEREBY TO AT HOME IF YOU'RE
TUNING IN. AUGUST SO THE CHANGES
HAVE ALREADY STARTED TO TAKE
EFFECT IN SO MANY. WAYS THAT WE
DIDN'T THINK ABOUT IN YEARS
PAST- AFFECTING PRICES IN THE
MORTGAGE INDUSTRY. BOND MARKET-
WE NOW KNOW THAT. WE ALSO HAVE
AN ELEMENT OF WILDFIRES WE
NORMALLY DON'T DISCUSS FINANCE
YOU KNOW THE IMPACT IT'S HAVING
ON OUR WORKFORCE OUR
FIREFIGHTERS- I'VE MET WITH A
LOT OF FIREFIGHTERS AND IN
DIFFERENT TIMES AFTER. DISASTERS
AFTER FIRES AND- SOME OF THEM
SHARED A HEARTBREAKING STORIES
OF HAVING TO BE GONE FROM THEIR
FAMILIES FOR LONG PERIODS OF
TIME. THE SHARE OF SOME
PSYCHOLOGICAL CHALLENGES AFTER
AFTER THE FACT. OF THE SURE THE
FACT THAT SOME OF THE FAMILIES
ARE NOW- IN. THERE HAVING
CHALLENGES INTERNALLY BECAUSE
OUR CON AWAY FROM THEIR THEIR
LOVED ONES AND SO THEIR CHILDREN
ARE STRUGGLING THEIR WIVES ARE
STRUGGLING OUR HUSBANDS. AND SO
WE NEED TO CONSIDER THE IMPACT
AGAIN TO THAT. TO OUR OUR
WORKFORCE- AND THESE INDIVIDUALS
WHO FIGHT REALLY HARD TO ENSURE
THAT THAT WERE SAFE WHEN WE- DO
ENCOUNTER WILDFIRES SO I REALLY
WANT TO MAKE SURE THAT WE- THINK
ARE FIREFIGHTERS BUT- WE ALSO.
NEED TO FIGURE OUT WAYS TO KEEP
THEM SAFE AND MAKING SURE THAT.
THAT WE KEEP FAMILIES TOGETHER
AND THEIR. CHILDREN ALSO IN A
GOOD PLACE ON. THANK YOU ONCE
AGAIN I WOULD. CALIFORNIA
COMMUNITY INCREASINGLY BEING
EXPOSED TO CLIMATE CHANGE
RELATED THREATS- I WANT TO ALSO
THANK COMMISSIONER IT GOT A LOT
OF WHO WROTE THE FIRST. NATION'S
FIRST CLIMATE INSURANCE LAW SB
THIRTY TO EXPLORE INNOVATIVE
STRATEGIES TO REDUCE RISK- I DO
TAKE THE TIME TO SPEAK AND MEET
WITH THE INSURANCE COMMISSIONER
BECAUSE WE KNOW THAT. WORKING
TOGETHER- AGAIN ALL STAKEHOLDERS
THAT'S THE ONLY WAY WE'RE GOING
TO BE EFFECTIVE IN MAKING SURE
THAT CONSUMERS ARE AT THE HEART
OF EVERYTHING THAT WE DO. AND SO
HE OUR HOUSE I DON'T HE'S NOT
HERE BUT HE HAS A REPRESENTATIVE
WHO WILL BE SHARING SOME OF THE
POLICIES THAT THEY'VE BEEN
EXPLORING. THROUGH A GROUP THAT
THEY ARE CONVENING AND THEY WERE
SHIPPED THERE GONNA SHOULD THE
RESEARCH AND SOME OF THE-
IMPORTANT WORK THAT. THEY'RE
DOING AND THE INSURANCE
COMMISSIONER'S OFFICE- THE
CRISIS OF YOU KNOW CLIMATE
CHANGE IS NOW FOREVER CHANGING
THE WAY WE SEE. THE INSURANCE
MARKET AND SO ONCE AGAIN THANK
YOU- FOR INSURANCE COMMISSIONER
FOR. HAVING THOSE CONVERSATIONS
WITH ME- I'VE TALKED TO MANY
CONSUMER. ADVOCATE GROUPS AND
ALSO CLIMATE CHANGE CONTINUES TO
BE THE RECURRING PAYMENTS SO
MANY OF OUR CONVERSATIONS. SO
ARE WE WILL START THINGS OFF
TODAY BY LOOKING AT THE CURRENT
LAWS. GOVERNING THE MARKET. ARE
AN OVERVIEW OF PROPOSITION ONE
OH THREE. OUR SPEAKER TODAY IS
HARVEY ROSENFIELD FOUNDER OF
CONSUMER WATCHDOG AN AUTHOR
PROPOSITION ONE OH THREE. SO
MISTER ROSENFELD. YARD THANK
YOU. THANK YOU SO MUCH FOR BEING
HERE AND AGAIN I JUST- WANT TO
MAKE SURE THAT I WOULD EVERYONE
HAS THE OPPORTUNITY TO SHARE
INFORMATION- SOMEWHAT EQUALLY SO
I WILL ALLOW FIFTEEN. MINUTES
PURPOSE CENTER AND I WILL ALSO.
GIVE YOU A FIVE MINUTE WARNING
WARNING SO YOU KNOW. THAT IT MAY
BE TIME TO START WRAPPING UP SO
THANK YOU VERY MUCH FOR BEING
HERE WITH US TODAY WE
APPRECIATE. YOUR TIME AND EFFORT
ON THIS ON THIS ISSUE. YOU MAY
PROCEED WHEN YOU'RE READY THANK
YOU. S. NO. THANK YOU MADAM
CHAIR MEMBERS OF THE COMMITTEE
REALLY MY NAME IS HARVEY
ROSENFIELD- I'M THE AUTHOR OF
PROPOSITION ONE OF THREE. THE
FOUNDER OF CONSUMER WATCHDOG. I
LED THE CAMPAIGN FOR THE PASSAGE
OF PROPOSITION ONE OF THREE IN
NINETEEN EIGHTY EIGHT AND WE
REALLY APPRECIATE THE
OPPORTUNITY. TO SPEAK ABOUT WHAT
PROPOSITION ONE THREE WAS HOW IT
CAME ABOUT. SOME HISTORICAL
BACKGROUND AND WHY THE REFORMS
THAT THE VOTERS PASSED. IN
NINETEEN EIGHTY EIGHT ARE
CRITICALLY IMPORTANT TODAY. TO
PROTECT CALIFORNIA CONSUMERS
HOMEOWNERS PROPERTY OWNERS CONDO
OWNERS. FROM WHAT'S HAPPENING IN
THE INSURANCE MARKET PLACE. I'M
GONNA APOLOGIZE IN ADVANCE FOR
MY- SEASONAL ALLERGIES WHICH
MIGHT. AT SOME POINTS. MAKE ME
HAVE TO SHUT THE MICROPHONE OFF-
I'M GONNA START IF I CAN BUY- A
LITTLE PRESENTATION ABOUT WHAT
WAS HAPPENING BACK IN THE DAY.
OKAY I'M READY FOR THAT HELP. IF
YOU CAN HEAR MY VOICE I'M ALSO
SUFFERING FROM SOME OF THE
ALLERGIES OKAY. TO SPELL
REDISTRICTING READY. SO CONTRARY
TO THE PERHAPS WHAT MANY OF YOU
THINK. OF THE CRISIS IN THE
NINETEEN EIGHTIES WAS NOT JUST
ABOUT HIGH INSURANCE RATES THAT
WAS A PROBLEM. BUT AS THESE-
NEWS CLIPS FROM THE EIGHTY SHOW.
THAT BUT A BIG ISSUE IN THE
NINETEEN EIGHTIES WAS THAT THIS
THE SKYROCKETING AUTO HOME
BUSINESS INSURANCE PREMIUMS.
WERE ALSO ACCOMPANIED. BY THE
INABILITY OF CONSUMERS MOTORISTS
SMALL BUSINESSES BIG BUSINESSES
DAY CARE CENTERS. HOSPITALS TO
GET INSURANCE AT ALL THE
INSURANCE COMPANIES WITHDREW
FROM THOSE MARKETS. YOU CAN SEE
DAY CARE CENTERS NONPROFITS
FIRST RESPONDERS SENIOR LUNCH
PROGRAMS THEATER ARTS FESTIVALS
RANCH OWNERS. OFFICE ARCHITECTS
BIRTHING CENTERS. MOTOR SPORTS
CAR RENTAL FIREWORKS FISHERMEN
EVEN HALLOWEEN EVENTS COULDN'T
FIND INSURANCE RESTAURANTS. ON
AND ON- ONE OF THE THINGS THAT-
ONE OF THE THINGS THAT WASN'T AS
HIGH PROFILE IN THE NINETEEN
EIGHTIES BUT IT WAS DEFINITELY A
CRISIS. WITH THE FACT THAT THE
INSURANCE COMPANIES WERE
REFUSING TO DO BUSINESS IN
CERTAIN NEIGHBORHOODS IN OUR
STATE. IF YOU WERE LOOK LATINO
OR BLACK YOU COULD NOT OBTAIN
INSURANCE AT ANY PRICE THESE
THAT'S BECAUSE OF THE INDUSTRY'S
HISTORIC- AND- THE
DISCRIMINATORY PRACTICES OF RED
LINING AND TERRITORY RATING-
THEY WOULD END THE END AT THAT
TIME. IN CALIFORNIA WE HAD AN
APPOINTED INSURANCE COMMISSIONER
UNDER STATE LAW THE COMMISSIONER
HAD NO POWER TO REGULATE THE
RATES ARE PRACTICES OF THE
INSURANCE COMPANIES. NOR WITH
THE ANTI TRUST LAWS APPLICABLE
SO- STATE AUTHORITIES COULDN'T-
BAR- CONCERTED BEHAVIOR THAT
WOULD OTHERWISE BE ILLEGAL- THE
INSURANCE COMPANIES WERE IMMUNE
FROM LAWSUITS THE UNREST CIVIL
ACT CIVIL RIGHTS ACT DID NOT
APPLY TO THEM THE STATE'S
CONSUMER PROTECTION LAWS DO NOT
APPLY TO THEM- ALL SO EVERYTHING
THAT HAPPENED. IN THE
MARKETPLACE WAS INEXPLICABLE AND
OPAQUE- FOR THE FOR NOT JUST FOR
THE PUBLIC BEFORE LAWMAKERS LIKE
YOURSELVES BACK THEN NOBODY
COULD FIGURE OUT WAS WHY THE
RATES WERE GOING UP THE LIGHT
NOBODY COULD BUY INSURANCE. NOW
THE INDUSTRY CLAIM THAT THESE
INCREASES IN NON RENEWALS AND
REFUSAL TO SELL WERE NECESSARY
BECAUSE THEY WERE TOO MANY
LAWSUITS. TOO MUCH RISK FOR THEM
TO BEAR BECAUSE OF THE LEGAL
SYSTEM. BUT THERE WAS NO WAY FOR
ANYBODY TO DETERMINE IF WHAT
THEY WERE SAYING WAS TRUE OR NOT
BECAUSE- THE LAWS IN CALIFORNIA
DID NOT AUTHORIZE ANY KIND OF
REGULATION OF THE INDUSTRY. AND
YOUR POINT COMMISSIONER
INSURANCE COMMISSIONER WAS AN
APPOINTEE HAD NO POWER. AND
THERE WAS NOTHING ANYBODY COULD
DO ABOUT ANY OF THIS WE NOW KNOW
OF COURSE THAT THOSE THAT THAT
CRISIS IN THE NINETEEN EIGHTIES
HAD NOTHING TO DO WITH LAWSUITS-
AS THEY CLAIM AS INTRINSIC
DISTRICT CLAIMED- IT WOULD HAVE
HAD TO DO EVERYTHING TO DO WITH
THE FACT THAT INSURANCE
COMPANIES HAD MADE ERRORS IN
FINANCIAL JUDGMENT. IN THE EARLY
NINETEEN EIGHTIES AND HAD TO
REMEDY THOSE ERRORS BY
INCREASING RATES. IN THE MID
NINETEEN EIGHTIES. SO WHEN THE
LEGISLATURE REFUSED TO DO
ANYTHING ABOUT INSURANCE IN
CALIFORNIA THE VOTERS AS THEY
OFTEN DO WENT TO THE BALLOT BOX.
WE ASSEMBLED A HUGE COALITION OF
CONSUMER CIVIL RIGHTS COMMUNITY
GOVERNMENT OFFICIALS THE
CAMPAIGN WHICH GRASSROOTS FUNDED
THE AVERAGE DONATION WAS NINE
DOLLARS- A HUGE VOLUNTEER EFFORT
TO PUT IT ON THE BALLOT. AND
HERE'S A PROPOSITION ONE OF
THREE CALL FOR. STUDENT A 20%
RATE ROLLBACK. A PRIOR APPROVAL
PROCESS THAT YOU'VE ALL HEARD
ABOUT WHERE THE INSURANCE
COMPANIES ARE REQUIRED TO OPEN
UP THEIR BOOKS AND JUSTIFY-
APPLICATIONS FOR RATE INCREASES.
AND THEY HAVE TO DO SO. IN A
PUBLIC WAY AND SUBJECT TO
CONSUMER INTERVENTION. SO THAT
THAT- PERF ADVOCATES LIKE
CONSUMER WATCHDOG CAN CHALLENGE
RATE INCREASES WHEN THEY BELIEVE
THEIR UNJUSTIFIED ANY ANY
CONSUMER CAN DO SO- AND. AND
THEN THE PROPOSITION ONE OF
THREE ALSO DEALT WITH THAT THE
OTHER CRISIS THAT I MENTIONED
ELECTED FIRST REPLY THE UNREST
CIVIL RIGHTS ACT. AND IT BARRED
REDLINING AND THAT REALLY
GREATLY DIMINISH THE PRACTICE OF
TERRITORY RATING- AND THESE WERE
PRACTICES THAT HAD BEEN THE
SUBJECT OF MANY LAWSUITS I
WANTED SOMETHING ON THE SCREEN
HERE THIS IS A- CLIP FROM THEN-
IT NINETEEN- I BELIEVE NINETEEN
NINETIES ABOUT- HOW METLIFE'S
USE OF RACE. THOUGH WAS ON
COVERED- GOING BACK DECADES. AND
THEN THIS IS A- LAW REVIEW
ARTICLE FROM THE NINETEEN
SEVENTIES TO CONDUCT THIS THE
TITLE SUMMARIZES HOW PERNICIOUS
THE DISCRIMINATORY PRACTICES
WERE AGAIN THERE WAS NO CONTROL
OVER THEM. SO I'D LIKE TO PIVOT
NOW VERY QUICKLY TO WHAT'S
HAPPENING IN CALIFORNIA WANT TO
ADDRESS TWO MYTHS THAT THE
INSURANCE INDUSTRY HAS HAS-
PROPAGATED- THE BOOK. BEFORE THE
LEGISLATURE IN THE PUBLIC FIRST
MYTH. THE INSURANCE COMPANIES
CLAIM THEY ARE FAILING AND THAT
THEY ARE IN FINANCIAL DISTRESS
THEY ARE NOT THEY'RE PROSPERING
. I'VE HEARD IT SAID IN FACT IT
WAS SAID BEFORE THE LAST
COMMITTEE HEARING THAT TWENTY
SEVENTEEN TO TWENTY EIGHTEEN
WILDFIRE LOSSES WERE SO HIGH
THAT THEY WAIT WIPED OUT TWENTY
SIX YEARS OF UNDERWRITING
PROFIT. THAT THE VERY MISLEADING
STATEMENT. FIRST OF ALL I WANT
TO POINT OUT THE FACT THAT THE-
UTILITY COMPANIES. HAND MADE
AVAILABLE TWELVE POINT ONE
BILLION IN SUBROGATION PAYMENTS.
AS A RESULT OF THEIR NEGLIGENCE
IN THE- IN SOME OF THOSE
WILDFIRES. THAT THAT'S RARELY
DISCUSSED OR ACKNOWLEDGED BY THE
INDUSTRY. BUT WHEN YOU LOOK AT
THE LONG TERM NINETEEN NINETY
ONE TO TWENTY TWENTY ONE
INSURANCE COMPANIES EARNED SIXTY
FOUR POINT NINE BILLION DOLLARS
MORE IN CALIFORNIA PREMIUMS.
THAN THEY REPORTED IN CLAIMS
DURING THAT PERIOD. AND THEN. IF
YOU INCLUDE SUBROGATION IN THAT
THEY- THEY PULLED IN SEVENTY
SEVEN BILLION MORE. THAN THEY
PAID OUT THEY'RE NOT THEY'RE NOT
IN FINANCIAL TROUBLE- THE IF YOU
LOOK AT THE- PROFITABILITY
FIGURES TO DIFFERENT METRIC OF
HOW YOU LOOK AT THE FINANCIAL
CONDITION OF THE INDUSTRY
CALIFORNIA'S CURRENT HOMEOWNER
COMPANIES. WERE MORE PROFITABLE
THAN THE NATIONAL AVERAGE OVER
THE LAST TWENTY YEARS EIGHT
POINT 8% RETURN ON NETWORTH
COMPARED TO SIX POINT TWO
PERCENT- NATIONALLY. AND BY THE
WAY ALL THIS IS CONTAINED IN
THIS FACTSHEET THAT WE'VE PUT
TOGETHER FOR THE COMMITTEE.
THERE'S A LOT OF THIS ABUSE
DISPUTE ABOUT THESE NUMBERS AND
ONE OF THE THINGS THAT THE
VOTERS DID WHEN THEY MADE THE
COMMISSIONER AND ELECTED OFFICE
AND MADE SURE THAT THERE WAS.
TRANSPARENCY IS THEY GAVE THE
COMMISSIONER THE POWER TO GET
THIS KIND OF INFORMATION FACTUAL
INFORMATION DID THEY REALLY LOSE
MONEY. DURING THE WILDFIRES AND
TO WHAT EXTENT TODAY AND WHAT
DOES THAT LOOK LIKE OVER THE BIG
PICTURE OF THE INSURANCE
INDUSTRY DOING. MAKING BE HAVING
THE MARKETPLACE BE VERY
LUCRATIVE FOR HOMEOWNERS OVER
THE LAST DECADES AND REALLY THE
INSURANCE COMMISSIONER SHOULD BE
DOING A DATA CALL USING HIS
AUTHORITY. TO GET THE RIGHT
ACCURATE NUMBERS FROM THE
INDUSTRY AND PRESENT THEM TO
THIS COMMITTEE I THINK WE'LL
PROBABLY RIGHT THOUGH A LETTER.
TO THE COMMISSION URGING TO DO
THAT. OKAY SECOND BIG. THE
ARGUMENT THAT THE INDUSTRY IS
MADE. INSURANCE COMPANIES AREN'T
GETTING THE RATE INCREASES THEY
NEED. THAT IS ALSO FALSE. WE
WENT BACK AND LOOKED OF IT FOR
THIS HEARING WE DID AN
EXAMINATION. OF A OF- RATES THE
RATE APPLICATIONS. OF BETWEEN
TWENTY ONE TWENTY ONE AND TWENTY
TWENTY THREE FOR HOMEOWNERS.
THESE PUBLIC RECORDS ARE
AVAILABLE ON THE COMMISSION'S
WEBSITE. THE INSURANCE COMPANIES
THE HOME INSURANCE COMPANIES GOT
94% OF THE INSURANCE. RATE
INCREASE THAT THEY REQUESTED
DURING THAT PERIOD THE AVERAGE
INCREASE WAS TEN POINT EIGHT
PERCENT. AND THE AVERAGE THAT
THAT REQUEST WAS TEN POINT
EIGHT. AND THE AVERAGE APPROVED
WAS TEN POINT 23% SO WE'RE IN A-
WHEN THE SITUATION WHERE THE
INDUSTRY IS SAYING THAT THE-
THAT- TELLING LAWMAKERS THAT.
THEY CAN GET RATES APPROVED
QUICKLY ENOUGH. THAT'S REALLY
NOT TRUE. AND EFFECTIVE GETTING
EVERYTHING THEY NEED AND THAT'S
WHAT THE BY THE WAY THAT'S A
PROBLEM WITH REQUIRES NOBODY
NOBODY BENEFITTED WHEN THE
INSURANCE INDUSTRY'S UNDER THE
DEREGULATED PRE PROPERTY THREE
VARMINT WENT BANKRUPT AS THEY
USED TO. THEY CAN'T THAT CAN'T
HAPPEN UNDER PROP ONE OH THREE
THEY GET THEIR INCREASES THEY
NEED. BUT NOT EXCESSIVE
INCREASES AND THAT'S WHY I KEPT
PROBLEM THREE IN THE AREA OF
MOTOR AUTO INSURANCE SAVE
CONSUMERS HUNDRED FIFTY FOUR
BILLION. SINCE ITS PASSAGE
CONSUMER WATCH. SORRY WHO OKAY
GONNA HURRY UP CONSUMER
WATCHDOGS OWN INTERVENTIONS- SAY
PEOPLE THREE POINT FOUR SEVEN
BILLION IN ALL FORMS OF
INSURANCE BETWEEN. TWO THOUSAND
TO IN TWO THOUSAND TWENTY THREE.
SO I WANT. TO HAVE IT NOW AGAIN
TO- ARGUMENTS OF THE INTERCITY
SAYS THE THAT THINGS OF THE
INDUSTRY'S DEMANDING. AND
EXPLAIN WHY THEY SHOULDN'T BE
ALLOWED THE COMMISSION HAS
PROPERLY BLOCKED THEM FROM.
GETTING WHAT THEY WANT THE FIRST
THING IS USE THE USE OF BLACK
BOX ALGORITHMS. THOSE ARE NUMBER
ONE NEVER BEEN SHOWN TO BE
ACCURATE. THE FACT THAT STATES
WHERE THEY'RE ALLOWED TO USE
MODELS FAILED TO PREDICT WEATHER
EVENTS AND THE MODELS THEMSELVES
WERE. SO FAR OFF THAT THE
COMPANIES ACTUALLY. MISTER MISS
- DID NOT CHARGE ENOUGH TO COVER
SOME OF THEIR LOSSES. NUMBER TWO
ALGORITHMS ARE NOTORIOUSLY-
BIASED- WITH RESPECT TO RACE
CLASS AND GENDER. AND THE REASON
THEY WOULD IF ALLOWED TO BE
UNDERTAKEN HER MODELS WOULD-
REINTRODUCE SOME OF THAT KIND OF
PROOF THAT DISCRIMINATION THAT
THE VOTERS- BARRED BY PROPERTY
THREE. AND ALSO AND MOST
IMPORTANTLY PERHAPS IS THAT THE
INSURANCE COMPANIES AND THE-
VENDORS OF THESE ALGORITHMS AND
MODELS. WANT TO INSIST THAT THEY
HAVE TO BE USED TO THEN THEY
INSIST THAT THEY CAN'T BE
SUBJECT TO PROPOSITION ONE OF
THESE TRANSPARENCY REQUIREMENTS
WHICH MEANS NOBODY WILL EVER BE
ABLE TO EXAMINE. WHETHER THEY'RE
LEGITIMATE OR NOT. SAME THING
SAME KINDS OF ARGUMENTS ABOUT
REINSURANCE THE REASON WHY THE-
REGULATIONS HAVE FOR DECADES-
PROMULGATED BY THE COMMISSIONER
BARRED THE USE OF REINSURANCE.
IS BECAUSE THAT IS UNREGULATED
AND THAT IF IT WERE ALLOWED TO
BE PASSED THROUGH TO CONSUMERS
RATES IN CALIFORNIA WOULD GO UP
4250% IMMEDIATELY. AND THE BE
SUBJECT TO THE VICISSITUDES OF-
WHAT HAPPENS ALL OVER THE GLOBE
IN THE REINSURANCE MARKET. SO AT
THE END OF OUR AND MY CUSTOMER I
WANT TO POINT OUT THAT THERE ARE
THERE ARE QUITE A NUMBER OF
RECOMMENDATIONS THAT OF WHAT
COULD HAVE WHAT SHOULD BE DONE-
WHAT CAN BE DONE IN ADDITION TO
ENFORCING PROPOSITION ONE OF
THESE REFORMS. I WANT TALK ABOUT
JUST A FEW. OF THE COMMISSIONER
HAS ISSUED REGULATIONS THAT
REQUIRE INSURANCE COMPANIES TO
GIVE HOMEOWNERS DISCOUNTS WHEN
THEY TAKE ACTIONS TO MITIGATE
THE RISK OF. A WILDFIRE. THE
LOSSES AT THEIR HOMES BUT THESE
THE LEGISLATURE. NEEDS TO
APPROVE MORE MONEY. TO GET FUND
THESE KINDS OF HOMEOWNER
IMPROVEMENTS EVEN THOUGH THEY'RE
GONNA GET DISCOUNTS. AND WE WERE
WE'RE GOING TO PROPOSE THAT THE
LEGISLATURE CONSIDER USING-
FUNDS. AN ESTIMATED THREE POINT
BILLION DOLLARS IN FUNDS FROM
THE CAP AND TRADE PROGRAM NEXT
YEAR- CUT THE INSURANCE INDUSTRY
SHOULD THE COMMISSIONER- SHOULD
REQUIRE THE INSURANCE INDUSTRY
TO. BOTH DISCLOSE ALL ITS
INVESTMENTS IN FOSSIL FUEL PANT
PLANS AND STOP UNDERWRITING THEM
- THE- SO THAT THE SAILOR BASE.
THE INSURANCE SELLING INSURANCE
TO THE FOSSIL FUEL PLANTS THAT
ARE CAUSING THE CLIMATE CRISIS.
BETTER THAN IS CAUSING THAT
LOSSES IN CALIFORNIA- OUT I'LL
CLOSE WITH ONE MORE- PROPOSAL-
IT'S A VERY SERIOUS ISSUE- WE
THINK THE ATTORNEY GENERAL
SHOULD INVESTIGATE- CONCERTED
EFFORTS BY THE INSURANCE
INDUSTRY IN THE MARKETPLACE
TODAY IN CALIFORNIA. BECAUSE
UNLIKE PRIOR TO PROP ONE OF
THREE PROPERLY APPLIED THE AND I
TRUST LAWS YOU CAN'T CONSPIRE TO
BOYCOTT THIS MARKETPLACE YOU
CANNOT. GE YEAH CAN CONFER WITH
EACH OTHER AS INSURANCE
COMPANIES TO ENGAGE IN THE KIND
OF CAMPAIGN WE'RE SEEING TODAY
WE'RE INSURANCE COMPANIES ARE
PULLING OUT OF THE MARKETS- I
WANTED TO- ASK THE JURORS
PERMISSION. TO ALLOW ME TO
SUPPLEMENT THE RECORD- WHEN
AFTER THIS COMMITTEE HEARING WE
HAVE WHEN WE MAY HAVE MORE TO
SAY. AND I WANT TO THANK YOU
AGAIN FOR YOUR ATTENTION TODAY
AND I'M HAPPY I'LL BE HERE FOR
THE WHOLE- HEARING ON HAPPY
ANSWER QUESTIONS NOW OR LATER.
THANK YOU VERY MUCH- NO THANK
YOU THAT WAS VERY INFORMATIVE SO
I'M GOING TO DEFER TO OUR
MEMBERS SO ANY QUESTIONS FIRST
FROM OUR MEMBERS ANY QUESTIONS
COMMENTS CONCERNS. I WILL START
WITH A CENTER OPERATOR YEAH. HI
MISTER ROSENFIELD THEY LET ME GO
THANK YOU SO AM I WILL SAY THAT
I HAVE NOT BEEN FOLLOWING
PROPOSITION ONE OF THREE- FOR
THE ENTIRETY OF MY LIFE WHEN I
WAS IN A VOTER IN NINETEEN
EIGHTY EIGHT. UNDERSTOOD HAD
OTHER PRIORITIES YES- AND IN THE
TIME ALLOTTED TO YOU TO BE ABLE
TO USE DO YOU PRESENT. I KNOW
THAT YOU TOUCHED ON A FEW THINGS
A PROPOSITION ONE OF THREE. I'M
ONE OF THE AREAS THAT YOU DIDN'T
TALK TOUCH ON THAT I WOULD LIKE
TO A LITTLE BIT MORE EDUCATION
ON IS THE- THE NOTION OF THE
STATE INTERVENTION PROCESSOR
INTERVENOR PROCESS- THAT WAS
ALSO PART OF THE PROPOSITION ONE
A THREE PIECE A LITTLE BIT
ABOUT. WHAT THAT IS AND HOW IT'S
IMPACTED YES THANK YOU FOR
ASKING ME THAT QUESTION BECAUSE
I KNOW THIS WILL I KNOW- THERE'S
A LOT OF MISUNDERSTANDING ABOUT
THAT. SO TO BE BLUNT. WHEN THE
VOTER SET UP THIS ENTIRE
REGULATORY PROCESS AND CREATED
THE ELECTED POST OF COMMISSIONER
. THEY DID NOT ENTIRELY TRUST.
THAT THOSE GOVERNMENT
INSTITUTIONS. SO THEY GAVE
THEMSELVES THE AUTHORITY THAT
THE UTILITY CONSUMERS ALSO HAVE
HERE IN CALIFORNIA- TO CHAT TO
OVERSEE WHAT'S HAPPENING IN THE
INDUSTRY. TO PARTICIPATE IN THE
PROCESS OF REVIEWING RATE
APPLICATIONS. AND TO REQUEST
HEARINGS IF. THEY BELIEVE THAT
THEY RATE APPLICATIONS THAT THE
COMPANIES ARE SUBMITTING UNDER
PAR PROVOKED PROCESS. ARE
EXCESSIVE. END AND THIS IS THE
PART I THINK THE INSURANCE
INDUSTRY JUST HATES THE MOST.
THE VOTERS MANDATED THAT WHAT IF
A CONSUMER CONSUMER GROUP BY
CONSUMER WATCHDOG. MAKES IT
MAKES A SUBSTANTIAL CONTRIBUTION
TO THE OUTCOME OF ANY.
PROCEEDING UNDER PROP ONE OH
THREE INSURANCE COMPANIES IN
MOST INSTANCES HAVE TO PAY. FOR
IT THE FEES AND EXPENSES. OF THE
CONSUMER GROUP TO BRING THE CUT
MARSHALL THE KIND OF. EXPERT
TESTIMONY ACTUARIAL SUPPORT AND
LEGAL TALENT THAT THE INSURANCE
COMPANIES. BRING TO THE TABLE
AND OF COURSE THEY BILL THE
POLICY HOLDERS FOR THAT TOO. SO
TO GIVE YOU ONE METRIC ABOUT THE
CONSUMER WATCHDOG I MENTIONED
THAT WE SAVED- QUITE A BIT THREE
POINT FOUR BILLION- OVER A LONG
PERIOD TIME IN OUR
INTERVENTIONS- THE COST THOSE
COSTS ARE ULTIMATELY ABLE TO BE
PASSED THROUGH. TO THE CONSUMERS
BY THE INSURANCE COMPANIES THAT
PAY OUR FEES AND EXPENSES FOR
EVERY ONE HUNDRED DOLLARS. WE
HAVE SAVED CONSUMERS IN
CALIFORNIA. THIRTY THREE CENTS.
IS THE COST OF OUR INTERVENTION
WORK IN SAVING THAT. THREE POINT
FIVE THREE POINT FOUR BILLION
DOLLARS SO- MOST PEOPLE THINK
THAT'S A PRETTY GOOD DEAL WE
NEVER HEAR ANY COMPLAINTS FROM
THE CONSUMERS I DON'T WANT MY-
MY THIRTY THREE CENTS GOING TO
YOU GUYS. WE NEED TO KEEP IT
BRIEF TWENTY FARMERS ARE GREAT
TO KEEP ELEMENT IT DOES THAT
ANSWER THAT QUESTION I HAVE
FOLLOW UP HERE. SO ARE THESE
INTERVENORS ARE THEY ELECTED OF
THE APPOINTED POWER THEY
SELECTED THE STATUTE SAYS ANY
PERSON WHO REPRESENTS THE
INTERESTS OF CONSUMERS. AND THAT
IS THAT IS- DETERMINED
INITIALLY. BY A FINDING BY THE
INSURANCE COMMISSIONER YOU CAN'T
JUST EAT YOU COULD WALK IN BUT
YOU HAVE TO SHOW. THAT FIRST
THAT YOU REPRESENT THE INTERESTS
OF CONSUMERS BUT IT'S ANYBODY-
WERE WERE THE LEAD GROUP I WOULD
SAY IN INTERVENTIONS UNDER
PROPOSITION ONE OF THREE. BUT
THE CONSUMER FEDERATION OF
CALIFORNIA CONSUMER FEDERATION
OF AMERICAN OTHERS DO SO AS
WELL. SO IF THEY'RE NOT ELECTED
IN THERE NOT APPOINTED THEIR
SELF. SELECTED- WHO THEN
MONITORED THE INTERVENORS
ENSURES THAT THERE GOOD ACTORS
AND GOOD PLAYERS. AT THE END OF
IT EACH INTERVENTION AT THE END
OF EACH PROCEEDING IN WHICH AN
INTERVENOR- PARTICIPATES- THE
INTERVENOR HAS TO FILE A REQUEST
WITH THE- AGENCY. TO OBTAIN AN
ORDER FOR COMPENSATION FOR THEIR
EXPENSES. AND THAT IS A PROCESS
THAT IT PRESENTLY IS OVERSEEN BY
AN ADMINISTRATIVE LAW JUDGE.
EVEN THOUGH SOME OF THESE
PROCEEDINGS MEANT THAT THE VAST
MAJORITY PROCEEDINGS ARE NOT M.
DON'T EVER GO TO A FULL HEARING.
THE DEPARTMENT HAS CORRECTLY
ASSIGNED IN MYSTERY OF WHAT
JUDGE TO REVIEW THOSE REQUESTS
FOR COMPENSATION AND THEY THEY
PASS OVER THEM AND IF THEY CAN
IF THE ADVOCACY GROUP AS WE OFF
I'LL OFTEN DO. I REQUEST FOR A
FUNDING AND WE HAVE MAKE SURE WE
CAN MAKE IT WE MADE A
SUBSTANTIAL CONTRIBUTION. THE
THE AGE THE ALJ ISSUES AN ORDER
WHICH THE ON BEHALF THE
COMMISSIONER TO MAKE SURE THE
COMPANY PAYS OUR FEES. SO YOU'RE
NOT HIRED BY A CONSUMER YOU'RE
NOT REQUESTED TO INTERVENE YOU
SELF. INTERVENE FOR PROFIT. WELL
IF IT WERE NONPROFIT. RECENTLY
WE INTERVENE TO PROTECT THE
PUBLIC AND THIS THE WAY THE
VOTERS WROTE THE STAT WITH THE
STATUTE WAS ENACTED VOTERS
DIRECT STATUTE. YES YOU'RE RIGHT
TOLD ME YOU DID YEAH YOU'RE
RIGHT THAT'S WHY I CORRECTED MY
SIZE AND- I LISTEN TO THE
BEGINNING AS WELL YES THE VOTERS
DIDN'T WRITE THE STATURE SO
RIGHT. TRYING TO UNDERSTAND THIS
INTERVENOR ACCESS BECAUSE I'VE
NEVER HEARD OF THIS BEFORE IN
ANY OTHER INDUSTRY. THAT PEOPLE
CAN SELF SELECT TO. BE WATCH
DOGS AT FOR PROFIT. AND YOU KNOW
THE NUMBER THAT YOU GAVE WAS I
MEAN THAT'S A LOT OF MONEY SO I
WONDER. WHAT IS THE BENEFIT. TO
THOSE WHO SELF SELECT TO BE
INTERVENORS AND YOU KNOW WHAT IT
WHAT IS THAT PRICE TAG WHAT HOW
MUCH YOU EARN FOR THAT WELL I'M
REALLY GLAD TO BE ABLE TO FILL
YOU IN ON THE SYRIAN FACT YOU'RE
INTERVENING FROM GRAHAM'S MOSTLY
IN THE UTILITIES AREA ALL OVER
THE COUNTRY. AND AND AS I SAY.
WE'RE NONPROFIT ORGANIZATION
ALTHOUGH THAT NOT NOT
NECESSARILY THE CRITERIA BECAUSE
THAT THE VOTERS SPECIFIED. IT
LITERALLY SAYS ANY PERSON MAY
INITIATE OR INTERVENE. SO IN
TERMS OF SELF SELECTION- I WISH
IT WERE MORE NONPROFITS DOING IT
HERE IN CALIFORNIA BECAUSE OF
ITS PLENTY OF WORK TO BE DONE.
LOOKING AT THIS MATERIAL. AND
WHAT MAYBE I'M NOT SURE REALLY
WHAT YOUR- QUESTIONS ARE YOU
YEAH I AM. I WAS WE NEED TO TAKE
I'M CHECK YEAH THANK YOU SO. SO
I. I SEEM TO BELIEVE I'M PRETTY
INTELLIGENT PERSON AND WHEN.
VOTERS SEE SOMETHING THAT
BENEFITS THEM LIKE YES WE WANT
TO MAKE SURE THAT WE DON'T HAVE
THESE CRISIS THAT WE CAN- HAVE
AFFORDABLE INSURANCE I THINK
THERE'S SOME PLUSES THERE. WHAT
WHAT I'M NOT. UP A SUPPORTER OF
IS. POLICY THAT GETS KIND OF
SNUCK IN THERE TO ALLOW FOR-
SELF BENEFITING. PROCESSES AND
SO AS AS A TAXPAYER AND AS A
PROTECTOR OF TAXPAYER DOLLARS IS
THERE AN OPTION TO DO A PUBLIC
RECORDS REQUEST OR TO ASSESS HOW
MUCH MONEY IS BEING. FILTERED
THROUGH THESE INTERVENOR OFFICE
. SO YOU'RE A QUARREL WITH IS
WITH THE VOTERS I UNDERSTAND
THAT I WOULD TAKE UMBRAGE AT THE
SUGGESTION THAT WE SNUCK THAT
IN. BUT I UNDERSTAND WHERE IT
COMES FROM- ALL OF IT ALL OF IT
IS PUBLIC RECORD AND IT SHOULD
BE ON THE- SCUSE ME SHOULD BE ON
THE DEPARTMENT'S WEBSITE.
BECAUSE THAT'S WHAT PROPERTY IS
ALL ABOUT TRANSPARENCY- AND IF
YOU HAVE ANY PARTICULAR.
INFORMATION THAT YOU WANT TO BE
HAPPY TO SUPPLY BUT THE
COMMISSIONER I BELIEVE ON THE
WEBSITE. HAS A LIST OF ALL THE
PAYMENTS. SO AS A AS A TAXPAYER
WE CAN FILE A PUBLIC RECORDS
REQUEST TO SEE. HOW MUCH MONEY
IS BEING EARNED. BY INTERVENORS
. WHAT I'M WHAT I'M SAYING
SENATORS I DON'T EVEN THINK YOU
HAVE TO FILE A REQUEST THANK YOU
COULD BUT I THINK IT'S ALL UP IN
THE WEBSITE OKAY BUT I KNOW THAT
THE KARMA YOU MEAN IDEA OF. YOU
KNOW YOU INTERVENE ON ONE
SITUATION. YOU KNOW IS IT A
PERCENTAGES AT A- HOURLY FEE
LIKE OH WHAT'S THAT SO WERE WERE
THE WAY IT WORKS IS WERE ALLOWED
TO CHARGE- THE HOURLY RATE THAT
THE- INSURANCE COMPANY LAWYER OF
EQUAL- SKILL AND- EXPERIENCE
WOULD CHARGE. SO THIS IS WE BILL
AN HOURLY RATE. WE BUILT FOR OUR
EXPENSES WHICH ARE USUALLY KIND
OF MINIMAL TO IT MIGHT BE
TRAVEL. AND THEN WE HAVE AN
ACTUARY- WHO WE EMPLOY THAT NOT
IMPLY BUT WHO AT THE PUMP AT THE
MOMENT IS A- SO VALUABLE TO
SERVE. WHAT TO WORK ON THESE
CASES. AND HE BILLS HIS TIME AT
AN HOURLY RATE THAT. HE IS
ALLOWED TO CHARGE WHICH IS ALSO
REVIEWED BY THE AGENCY. AND ALL
OF THAT IS PUT TOGETHER IN A
RECALL IN THE COMPENSATION
REQUEST. HE SAID ALOUD BY. THE
AGENCY WHICH AGENCIES AT THE
DEPARTMENT. WHICH DEPARTMENT.
SORRY THE DEPARTMENT OF
INSURANCE CAR INSURANCE SO THEY
SET THE RATES FOR. NO THE
RICHEST OPENS THE RATES ARE
BASICALLY SET BY THE MARKET
WHICH AND- BASED ON WHAT THE
INSURANCE COMPANIES CHARGE FOR
SIMILAR SERVICES. AND ARE YOU
SAYING THESE INTERVENORS. THEIR
EDUCATED QUALIFIED HOUSE. WELL
SO SOME OF US ARE LAWYERS AND
THEN SOME OF US ARE ACTUARIES HI
GOTCHA OKAY. ALL RIGHT. THANK
YOU THANK YOU SO MUCH- MISTER
DOT. YEAH ROSEVILLE. I
APPRECIATE THE YEAH WHEN I SAW
THE ARTICLES UP THERE IN THE
NINETEEN EIGHTIES- I WAS BUSY
RUNNING A BUSINESS BACK IN THOSE
DAYS PROBABLY NOT PAYING THAT
MUCH ATTENTION. ALTHOUGH I MIGHT
HAVE BEEN HAPPY ABOUT- THE LOWER
INSURANCE RATES FOR BUSINESS.
THAT SAID- SO I WOULD
APPRECIATE- YELLED. WHAT YOU'VE
DONE FOR CONSUMERS. I GUESS AT
THE SAME TIME. I LOOK AT WHAT
THIS THAT HAS DIED OVER THIRTY
FIVE YEARS BECAUSE NOW WHAT WE
CAN DO FIRST OF ALL THIRTY FIVE
YEARS AGO THIS WAS PASSED BY 51%
OF THE VOTERS. AND WHILE YOU MAY
NOT HAVE SNUCK IT IN TWO- THE
PROPOSITION CLEARLY YOU HAD A
MOTIVE IN MIND AND SO DID MR
NADER. IOTA OF. FUEL A PROCESS
IN THE FUTURE TO MOVE ON THAT
SITE I'M NOT SAYING THERE'S
ANYTHING RIGHT OR WRONG WITH
THAT BUT I JUST WANTED TO KIND
OF. ADD TO WHAT SENATOR WAS
TALKING ABOUT HERE BUT YOU USE
YOU SAID ABOUT. WHAT WHAT MY
CONCERN IS RIGHT NOW IS. WITH
ALL THE FIRES EVERY AVID
PARTICULARLY IN MY DISTRICT I'VE
GOT PEOPLE RIGHT NOW. THEY'RE
GOING MAKE IT WOULD NO INSURANCE
WHATSOEVER. AND I'VE GOT THERE
TOO. BUT BUSINESSES AND
HOMEOWNERS IN I TELL YOU PEOPLE
ARE FRIGHTENED. IT'S SO. WHAT
WHEN I LOOK AT THIS WOULD YOU
SAYS- INSURANCE COMPANIES HAVE
GONE ON THE AVERAGE TEN POINT 8%
THEY'VE BEEN AWARDED TEN POINT
TWO PERCENT. IS BEEN APPROVED BY
THE INSURANCE COMMISSIONER. CURO
. IN THAT ALSO YOU SAID THAT
RATES. ARE WOULD GO UP FORTY TO
FIFTY PERCENT. FOR REINSURANCE
ON THE REINSURANCE OR JUST ON
THE REINSURANCE IT YES ON THE
REINSURANCE ITSELF. I GUESS WHAT
I'D LIKE TO SAY IS WHAT I'M
SEEING IN THE MARKETPLACE. IS
THE INSURANCE RATES ON NOT
ADMITTED CARRIERS BECAUSE
THEY'RE THE ONLY ONES THAT ARE
COMING IN. TO LOOK TILT TO EVEN
LOOK AT SOME OF THESE REST AND
IT'S- NOT. IT'S NOT TEN POINT
EIGHT OR TEN POINT 2% THE THIRD
BIT MORE THE THAN THE POLICY IT
SOMETIMES. ONE HUNDRED TWO
HUNDRED THREE HUNDRED PERCENT.
OR MAYBE EVEN MORE AND THIS THIS
IS A PROBLEM THAT. I SEE LOOK AT
IT AT THE SAME TIME I SEE THE
GOOD THINGS WITH THIS IN OUR-
AUTO RATES LIKE AND CAN MIX AND
MATCH YOUR MISS BELCHER. YEAH
WE'RE THE LOWEST IN THE COUNTRY.
LOOKING AT IT WE GOT A LOOK AT
THIS STUFF AS A MATTER OF
BALLOTS WHAT OTHER COMMODITY IN
THE STATE OF CALIFORNIA. ARE WE
THE LOWEST RATE ON. IN THE YEAH
OUT. IN IN THE UNITED STATES OUT
OF ALL FIFTY STATES AND WE'VE
GOT A LOOK AT THIS THING AND SAY
WHERE HAVE WE GONE WRONG. IN IT
WHAT I DON'T WANT TO DO IS THROW
THE BABY OUT WITH THE BATHWATER
TERRIBLE ANALOGY BUT I'M GONNA
USE IT FOR THIS BECAUSE I THINK
THERE ARE SOME GOOD THINGS. SO
WHAT I'D LIKE TO SEE YOUR
ORGANIZATION- IS TO SHOW SOME
LEADERSHIP. IN MAYBE WORK WITH
THE INSURANCE COMMISSIONER WORK
WITH INSURANCE COMPANIES TO LOOK
AT. RESPECTS MODELS IN
REINSURANCE IF ONLY FOR A PERIOD
OF TIME. MAYBE WE GOT A PROCESS
OF FIVE YEARS OR SO. ALL ON A
SPECIFIC TO- YOU KNOW TO-
PROPERTIES AND REST TO WILDFIRE
OTHER CLIMATE- THE ODE DANGERS
BECAUSE YOU DOING NOTHING. AND
HAVING THE- THE PROBLEM THE PROP
ONE OH THREE GUIDELINES IN PLACE
TODAY I DO BELIEVE. IS AN
IMPEDIMENT BECAUSE A LOT OF
INSURANCE COMPANIES DON'T WANT
TO DO THE DANCE WITH YOUR
ORGANIZATION TO GET A- TWENTY OR
THIRTY OR 40% INCREASE. THAT
THEY MAY VERY WELL BE DO YOU'RE
TALKING ABOUT THE PROFITABILITY
OF INSURANCE COMPANIES OVER THE
LAST THIRTY FIVE YEARS. THAT
DOESN'T REALLY TELL THE STORY-
THE MICRO STORY OF WHAT'S REALLY
HAPPENED. YOU KNOW IN IN THE
LAST FIVE YEARS IN IN I WANT TO
MAKE ONE OTHER POINT CLEAR. I'VE
DONE THE FIGHT WITH THE
INSURANCE COMPANIES IN THIS VERY
ROOM ON INSURANCE BILLS FOR LOT
BUYER INSURANCE. FOR CONSUMERS-
THAT I WANT TO PROTECT FROM- THE
THINGS THAT INSURANCE COMPANIES
ARE DOING SO THIS AYE YOU'RE NOT
YOU'RE NOT LOOKING AT SOMEBODY
HERE THAT'S- ALL IN WITH
INSURANCE COMPANIES. I'M ALL IN
WITH CONSUMERS YEAH I KNOW YOU
SAY YOU ARE BUT AT THE SAME TIME
I THINK THAT WOULD PROP ONE OH
THREE. WHAT WHAT IT'S DOING IS
IT'S CREATING PROBLEMS. WITHIN
THE SYSTEMS THE NOW- TIME WE
COULD SEE IS HURTING IT'S
HURTING BY CONSTITUENTS SO- I
HOPE THAT YOU'LL CONSIDER
SOMETHING THAT WE CAN WORK
TOGETHER. TO FIND A PATHWAY HOME
. YOU OFF OF YOUR FOR CONSUMERS
. THANK YOU MISTER DOCTOR ANY
OTHER MEMBERS OF THE MANAGER I'M
SURE WOULD YOU MIGHT LET LITTLE
OF MYSELF. I THOUGHT IT WAS A
QUALITY STATEMENT YOU MAY
RESPOND THANK YOU MANAGER.
SENATOR UNDERSTAND WHERE YOU'RE
COMING FROM- OUR OUR MISSION IS
TO PROTECT CONSUMERS AGAINST
PRACTICES THAT ARE AND ARE NOT
IN THEIR INTERESTS I UNDERSTAND
THAT THE INDUSTRY AND- HAS HAS.
PERSUADED PEOPLE HERE IN
SACRAMENTO THE PROPOSITION ONE
OF THREE IS THE PROBLEM IF YOU
THAT IF I WOULD ASK THAT YOU.
CAN RECONSIDER- BY REVIEWING OUR
TESTIMONY WHICH IS FULL OF FACTS
FULL OF NUMBERS MOST OF IT FROM
THE INSURANCE INDUSTRY'S OWN-
DATA. THAT SHOW THAT THEY'RE NOT
LOSING MONEY THAT REINSURANCE
WOULD COST PEOPLE WOULD LEAD TO
AN VAST INCREASES. AND MODELS
ARE NOT RELIABLE SO I WOULD JUST
ASK YOU TO REVIEW THAT. AND SEE
IF YOU CAN'T. THEN I THINK YOU I
HOPEFULLY YOU WILL. SKEWS ME. A
B. PERSUADED. THAT THAT THAT IT
WOULD BE A MISTAKE TO EMBARK ON
WHAT THE INDUSTRY IS ASKING YOU
TO DO AND I WHAT WE SEE IS THAT
A REPEAT OF WHAT HAPPENED. IN
THE LAST CRISIS THAT I TRIED TO
DESCRIBE. THANK YOU. IN THAT
PICTURE YEAH. I WILL I WILL DO
THE DEEP DIVE I DON'T THINK I'VE
BEEN PERSUADED BY INSURANCE
COMPANIES I'VE BEEN PERSUADED
BY. MY CONSTITUENTS. WHO ARE
OUTRAGED. THAT THE INSURANCE
RATES ARE THIS HIGH THAT THEY
CAN'T CHARGE ME IN IN THE OTHER
THING IS. IT'S VERY HARD TO HAVE
THESE DISCUSSIONS WHEN WE'RE
TALKING ABOUT- INSURANCE
INCREASES OF 10% COULD BE 40%
BECAUSE THEY'RE ALL IN THE
ABSTRACT WE DON'T KNOW. WHAT THE
INVESTMENTS ARE FOR THESE
COMPANIES WHAT THEIR RATE OF
RETURNS ARE WE WILL BE MADE
MAYBE MAYBE YOU DO BUT IT BUT AT
THE SAME TIME. IF YOU WERE
LOOKING AT THIS IN THE LAST FIVE
YEARS OR THE LAST TEN YEARS I
THINK DID. TO GO ANY DEEPER THAN
THAT JUST DOESN'T MAKE A LOT OF
SENSE TO ME. JUST KNOWING THAT
THE INSURANCE IF THE MAXIMUM
INCREASE WAS GIVEN IS TEN POINT
TWO PERCENT. AVPROPERTIES THAT.
THAT CANNOT BE ENOUGH IN ANY. IN
ANY WAY SHAPE OR FORM.
INCENTIVIZE THE INSURANCE
INDUSTRY TO WANT TO RATE TO WHAT
TO WRITE BUSINESS IN THE STATE
OF CALIFORNIA AND IT TILL WE
SOLVE THAT PROBLEM. CONSUMERS
THAT I REPRESENT. YOU KNOW ARE
NOT GOING TO ARE GOING TO
CONTINUE TO BE OUTRAGED. SO I'LL
BE. THANK YOU SENATOR DOC ANY
OTHER MEMBERS TO GO AHEAD SIR.
YEAH VERY BRIEF. I REALIZE THAT
USUALLY. FOLLOWED BY AN ENDLESS
. BUT I WON'T DO THAT. THE
CHALLENGE WE HAVE IS A
PROPOSITION ONE OH THREE WAS
CREATED IN A VERY VERY DIFFERENT
TIME. WITH A SET OF CHALLENGES
AT THAT TIME THAT ARE
FUNDAMENTALLY DIFFERENT. THAN
WHAT WERE- FACED WITH AND
DEALING WITH NOW AND NOW WE HAVE
AN ENTIRELY DIFFERENT SET OF
CHALLENGES IN THE INSURANCE
MARKET. AND IT COULD BE THAT
PROP ONE OH THREE. IS WELL
TAILORED TO WHAT EXISTED IN THE
MID EIGHTIES AND EARLY NINETIES
PERHAPS BUT PERHAPS NOT QUITE
SO- WELL- SUITED TO TODAY- YOU
CALLING ON THE- CAR ANALOGY IT
MAY NOW BE UNDER OF AN OBSOLETE
JALOPY- INSPECTOR JONES ANY
COMMENT YEAH I JUST WANT TO
ALIGN MY COMMENTS WITH SENATOR
DODD AND- JUST ALSO UNDERSCORE
THAT I'M HEARING. FROM MY
CONSTITUENTS AS WELL SO. I'M
CERTAINLY CAPABLE AS ALL OF MY
COLLEAGUES ON THIS DICE ARE
MAKING UP THEIR OWN MIND ON HOW
THESE THINGS ARE IMPACTING OUR
CONSTITUENTS AND JUST WANTS TELL
MISTER DOT THANK YOU FOR THOSE
COMMENTS. THANK YOU ASCENA OR
COMMENTS ON THIS ISSUE- I WANT
TO THANK YOU FOR SITTING HERE
WITH US AND SHARING SOME
INFORMATION AND- THE REALITY IS
AND YOU KNOW WHAT I WANT TO JUST
TAKE THE SIM FROM SENATOR DODD
AYE WE WERE YOU WERE REALLY HERE
BECAUSE WE'RE HEARING OUR
CONSUMERS YOU KNOW OUR FOR. THE
FACT THAT WE SEE HERE IN
SACRAMENTO DON'T NECESSARILY
TRANSLATE BACK HOME YOU KNOW
WHEN WE'RE SAYING THINGS ARE
FINE AND THEY'RE DOING GREAT
THAT MAY BE TRUE BUT THEN WE
HAVE CONSUMERS WHO ARE. ARE ARE
YOU KNOW NOT BEING INSURED THEY
DON'T HAVE ENOUGH INSURANCE THAT
THEY'RE SUFFERING THE
CONSEQUENCES OF US I WOULD SAY
ALL OF US HERE NOT FOR YOU NOT
WHAT A GOOD PLACE TO BE IN THE
ENTRANCE MARKET IS RIGHT NOW SO
I WANT TO JUST- I THINK IT WAS
CENTER OUR I DON'T GO OUT SO
MUCH MONEY. CONVENORS MAKE I'M
JUST GONNA QUOTE I JUST FOUND AN
ARTICLE FROM THE SECOND
SACRAMENTO BEE. IT SAYS THAT
MORE THAN THREE QUARTERS OF THE
SEVENTEEN POINT SIX BILLION AN
INTERVIEW I'M SORRY MILLION AN
INTERVENOR. INTERVENOR FEES
AWARDED SINCE TWO THOUSAND
THREE. I'VE GONE TO THE CONSUMER
WATCHDOGS OR CONVENERS. I DON'T
KNOW IF I GET THIS IS NOT GOING
TO BE SO I JUST HAPPEN TO HAVE
THIS. HANDY BUT- I JUST WANT TO
REITERATE WHAT THE OUR CENTER
DOT IS. TOPS JUST STATED WE
REALLY JUST WANT TO FIND
SOLUTIONS AND- AND I KNOW FIRST
YEAR ON THE HOT SEAT- AND HAVE
INSURANCE. YOUR FOLKS ON THE HOT
SEAT A LITTLE LATER. BUT ANOTHER
CALM AND THAT KIND OF- CAUGHT MY
ATTENTION AS- YOU STATED AS A
FACT THAT- THE RATE INCREASES
HAPPEN VERY QUICKLY- BUT I DO
REMEMBER FROM OUR LAST-
OVERSIGHT HEARING WE HAVE THE
INSURANCE COMMISSIONER STAFF
HERE IN. WHEN I ASKED HIM HOW
LONG IT TAKES AND HE- STATED
PUBLICLY THAT SOMETIMES CASES UP
FOR CONVENERS. COULD TAKE UP TO
TWO TO THREE YEARS- I'M SORRY.
FOUR RATE INCREASES CELL. SO
IT'S NOT AS FAST AS- AND SO I
JUST WANT TO SHARE. THAT'S WHAT
I REMEMBER FROM THE LAST DAY AND
WHEN WE CLARIFY WHEN HE GETS.
SAID TO HAVE HIS TURN. BY DOT I
APPRECIATE IT I LIKE I SAID I
KNOW IT FEELS LIKE FOR THE HOT
SEAT RIGHT NOW WILL HAVE A
CHANCE TO. TO GO DEEP INTO THE
OTHERS UP PRESENTATIONS AND- AND
I JUST WANT TO SAY THAT WILL
CONTINUE TO ENGAGE IN A
CONVERSATION THIS IS ABOUT
COMING TOGETHER AT THE TABLE
AND- SO I JUST WANT TO SAY THANK
YOU I KNOW THIS IS NOT EASY TO
BE HERE AND ANSWER ALL THESE
QUESTIONS BUT- WE WANNA MAKE
SURE THAT WE CONTINUE TO MOVE IN
A WAY THAT IT'S RESPECTFUL OF.
ALL PERSPECTIVES ALL THAT YOU'VE
FINISH I KNOW THAT YOU'RE-
TRYING TO SAY SOMETHING IS DONE
AND I JUST REAL QUICKLY THIRTY
SECONDS VERY QUICKLY FIRST OF
ALL THANK YOU IT'S SET. UP IT'S
NOT A HOT SEES FAR AS I'M
CONCERNED AND IN THIS FOR THE
LAST THIRTY FIVE YEARS- I WANT
TO. ONE THING THOUGH BUT THE
IMPRESSION ABOUT THE- INTERVENOR
PRODUCT. PROCESS I HEARD THE
HEARING THIS TESTIMONY LAST TIME
SO- WITH THE BENEFIT THE FACT
THAT WE ARE DALY INVOLVED IN
THAT- THE LAST HEARING. ON A
PROPOSITION RATE APPLICATION ONE
OF THREE RATE APPLICATION WAS IN
TWENTY FIFTEEN. THERE'S NO
THERE'S BEEN NO FORMAL HEARING
SINCE. THE VAST MAJORITY OF
THESE THINGS ARE WRAPPED UP. IN
A FEW MONTHS AFTER THE
DEPARTMENT. INITIATES THE
INQUIRY. AND SOMETIMES THEY'VE
AYE UNCERTAIN SITUATIONS I'VE
BEEN INVOLVED IN THEM. THEN GO
TO EIGHTEEN MONTHS. FOR EXAMPLE
ONE TIME WHEN STATE FARM WAS
REALLY RESISTING COMPLYING WITH
A PORTION OF THE LAW. TOOK
EIGHTEEN MONTHS TO RESOLVE IT
MOST OF THEM ARE DONE. VERY
QUICKLY- THE DELAYS ARE OFTEN ON
THE INSURANCE. INDUSTRY'S PART
WHEN THE WHEN THEY APPLY SO WITH
THAT NOTE. AND I'M HAPPY TO
PROVIDE A MORE MATERIAL THAT THE
COMMITTEE WOULD LIKE MORE DATA
ANYTHING YOU LIKE THANK YOU BUT
I DO HAVE A QUESTION AND I KNOW
THAT IT'S GOING TO CHALLENGE YOU
JUST. A LITTLE BIT. I MEAN GIVEN
THAT IT'S SET UP YOU KNOW WAS
NINETEEN EIGHTY EIGHT JUST YOU
KNOW AS THE AUTHOR IS THERE.
ANYTHING THAT YOU WANT TO SHARE
ANYTHING THAT YOU WOULD HAVE
DONE DIFFERENTLY IN NINETEEN
EIGHTY EIGHT. GIVEN THE
INFORMATION WE HAVE NOW IS THERE
ANYTHING THAT YOU WOULD SAY YOU
KNOW MAYBE WE SHOULD HAVE DONE
THIS. ANYTHING DIFFERENTLY.
FUNDAMENTALLY THE PROPOSITION.
AS I EXPLAINED AT THE BEGINNING.
IT'S SET UP TO BE. A PROTECTOR
OF CONSUMERS IN ANY. SCENARIO
NOT JUST WHAT WAS HAPPENING IN
THE- IN THE MARKETS IN NINETEEN
IN THE NINETEEN EIGHTIES. I DO
WISH. I HAD- THOUGHT MORE
CAREFULLY- UNDERSTOOD BETTER HOW
THE INSURANCE INDUSTRY WOULD.
KIND OF THAT SEIZE ON CERTAIN.
PROPOSITIONS AND WORDS IN THE
INITIATIVE TO- COME UP WITH
ALTERNATIVE MEETING FOR THEM BUT
OTHER THAN THAT. I FEEL PRETTY
COMFORTABLE ABOUT WHAT THE
VOTERS DID. THANK YOU FOR YOUR
TIME WE REALLY APPRECIATE IT SO-
WITHOUT WORRY ONE MORE COMMENT.
MEDFORD YOU HAVE REALLY BRIEFLY
UP REALLY BRIEF SHOP I JUST WANT
TO KNOW BECAUSE YOU MENTIONED
THE SACRAMENTO BEE ARTICLE AND
IT DID STATE THAT CALIFORNIA IS
THE ONLY STATE. THAT ALLOWS
OUTSIDE CONSUME OUTSIDE AGENCIES
TO INTERVENE- IN. AN AUTO AND
HOME INSURANCE RATES. AND SO TO
CENTER DODDS POINT. WHY WOULD
THE INSURANCE INDUSTRY WANT TO
DO BUSINESS IN CALIFORNIA IF WE
ARE THE ONLY STATE AND I DON'T
ANSWER THIS IS MY BRIEF END OF
QUESTION WHY WOULD IT WHY WOULD
INSURANCE INDUSTRY WANT TO DO
BUSINESS HERE IN CALIFORNIA. IF
YOU KNOW WE ARE THE ONLY STATE
THAT MAKES IT THIS MUCH
DIFFICULT FOR THEM. TO DO THEIR-
BUSINESS SO- AND WITH THAT
UNLESS YOU WANT TO CONTINUE
KERR. THANK YOU. OKAY THANK YOU
VERY MUCH. NOW WE WILL MOVE ON
TO OUR NEXT PRESENTER AND THANK
YOU FOR YOUR PATIENCE- WE HAVE
DOCTOR MICHAEL WARA INTERIM
POLICY DIRECTOR. SUSTAINABILITY
ACCELERATOR STAMPFER SCHOOL
SUSTAINABILITY. DIRECTOR CLIMATE
AND ENERGY POLICY PROGRAM SENIOR
RESEARCH SCHOLAR WITH THE
INSTITUTE FOR THE ENVIRONMENT
DOCTOR ARE YOU HAVE QUITE A
TITLE THERE- AND I KNOW THAT
JOB. YOU'VE ASKED TO TESTIFY NOT
ONLY HERE IN OUR HUMBLE BOB DOME
BUT YOU'VE ALSO BEEN IN
WASHINGTON DC SO WE THANK YOU
FOR YOUR TIME AND WHEN YOU'RE
READY YOU MAY PROCEED THANK
THANK YOU THANK YOU SENATOR
RUBIO AND MEMBERS OF THE
COMMITTEE. FOR INVITING ME TO
SPEAK TODAY- I HAVE WORKING ON
THIS- FOR ABOUT THE LAST. SIX
YEARS TO SEVEN YEARS- AND HAVE
WORKED WITH THE SENATE ON THE
MAJOR PIECES OF LEGISLATION
RELATED TO- ESPECIALLY UTILITY
WILDFIRE RISK AND MORE RECENTLY
WILDFIRE RISK MITIGATION. IN-
CALIFORNIA AND- ALSO SERVED ON
THE WELFARE COMMISSION- WHICH
WAS CREATED BY SPY- SB NINE A
ONE. SET A TIMER SO I DON'T. RUN
OVERTIME- AND- THOSE EXPERIENCES
WHAT I BRING TO THIS
CONVERSATION AND I'D SAY IN A
PARTICULARLY SERVING ON THE
WELFARE COMMISSION. MEETING WITH
SENATOR DODD'S CONSTITUENTS-
PEOPLE REAL PEOPLE THAT WERE
IMPACTED BY THE FIRE IN
PARADISE. THE CAR FIRE IN
REDDING. WHICH WAS REALLY
AFFECTING EXPERIENCE PERSONALLY
FOR ME AND MORE RECENTLY.
VISITING COMMUNITIES THAT WERE
AFFECTED BY THE CALDER FIRE
WHICH BURNED- IN THE HIGHWAY
FIFTY CORRIDOR UP TO LAKE TAHOE
A COUPLE OF YEARS AGO AND
VISITING WITH. THE PEOPLE OF
GRIZZLY FLATS WHO'S THE
COMMUNITY WAS UTTERLY DEVASTATED
BY THAT FIRE- I WANT TO MAKE I
WANT YOU TO COME AWAY FROM THIS
PRESENTATION WITH SORT OF TWO
MAIN IDEAS. AND I THINK THESE
ARE FUNDAMENTAL THE FIRST IS.
BECAUSE OF CLIMATE CHANGE. WE
ARE NOT GOING TO BE ABLE TO
FIREFIGHTER WAY OUT OF THIS
PROBLEM WE ARE NOT GOING TO BE
ABLE TO INSURE OUR WAY OUT OF
THIS PROBLEM BOTH OF THOSE
THINGS ARE ESSENTIAL INGREDIENTS
TO SUCCESS FOR CALIFORNIA. BUT
THEY CANNOT BE THE ONLY
INGREDIENTS AND I THINK THE
MISSING INGREDIENT IS JUST A
PLACE WHERE. I AGREE STRONGLY
WITH WHAT WAS JUST SAID BY- THE
PROPRIETOR SPEAKER WE REALLY
NEED TO BE THINKING ABOUT HOW TO
CREATE INVESTMENT IN RISK
REDUCTION AND TO MAKE THAT
INVESTMENT AS EFFECTIVE AS
POSSIBLE- AND THAT MEANS.
ACTUALLY IN MY VIEW INSURANCE
AND THE ROLE OF ENSURE INSURANCE
COMPANIES KIND OF GOING BACK TO
THE FUTURE. THE EARLY ROLE THAT
INSURANCE PLAYS IN THE UNITED
STATES IN THIS IS REALLY IN THE
AFTERMATH OF FIRES IN BALTIMORE
AND CHICAGO AND IN CALIFORNIA
AFTER THE NINETEEN OH SIX.
EARTHQUAKE AND REALLY FIRE THAT
DEVASTATED. MY ANCESTORS HOMES
MY PEOPLE COME FROM MISSION
DISTRICT IN SAN FRANCISCO- WAS
TO PLAY AN IMPORTANT ROLE IN THE
DEVELOPMENT OF URBAN BUILDING
CODES. SO THAT WE WOULD NOT HAVE
HOUSE TO HOUSE CONFLAGRATION.
LIKE WE EXPERIENCED IN THOSE
EARLY FIRES AND PRIMARILY
WOULDN'T CITIES. AND OUR CITIES
TODAY ARE MUCH SAFER BECAUSE OF
IT. WE MAY SUFFER TERRIBLY WHEN
THE NEXT EARTHQUAKE STRIKES
CALIFORNIA BUT WE ARE MUCH LESS
LIKELY TO SUFFER THE KIND OF
CONFLAGRATION THAT OCCURRED IN
SAN FRANCISCO. IN APRIL OF
NINETEEN OH SIX. WE NEED TO DO
MORE OF THAT. IN THE BUILT
ENVIRONMENT IN THE WILDLAND
URBAN INTERFACE INSURANCE HAS A
VERY IMPORTANT ROLE TO PLAY IN
FACILITATING THAT AND THEY ARE
FACILITATING THAT THE CBI. AND
IB H. US IN PARTICULAR BY THE
INSUPERABLE INCOME SAFETY ARE
ARE REALLY STRIVING. TO DO MORE
AND THAT THE TWO DISCOUNTS THAT
WERE RECENTLY INTRODUCED BY CD I
THINK ARE ARE ARE A REASONABLE
STEP IN THAT DIRECTION. CAL
FIGHTER IS ALSO WORKING HARD TO
DO THIS RIGHT TO FIGURE OUT WAYS
TO DO HOME HARDENING- SO CALLED-
BUT. I GUESS WHERE I APPROACH
THIS PROBLEM TODAY IS HIS FIRST
TO SAY THAT. INSURANCE AS A
PRODUCT. IS EXTREMELY VALUABLE
TO CALIFORNIA AND I THINK IT'S
VALUABLE IN TWO WAYS. YOU KNOW
WHAT ONCE YOU TALK TO VICTIMS OF
A WILDFIRE VICTIMS WHO WERE
EITHER UNINSURED OR MORE LIKELY
UNDERINSURED. YOU WANT YOU BE
REALLY UNDERSTAND AND CAN COME
TO GRAPPLE WITH HOW MUCH
INSURANCE IS A IS A WAY TO
CREATE CLIMATE RESILIENCE. IT IS
HOW HOUSEHOLD WEALTH IS
PRESERVED IN THE FACE OF
CATASTROPHE. MORE BROADLY- WELL
INSURED COMMUNITIES ARE GONNA
BOUNCE BACK BETTER FROM THESE
EVER MORE FREQUENT CATASTROPHES
AS THEY OCCUR. AND ARE CENTER
RUBIO YOUR COMMENT ABOUT SCHOOLS
REALLY RESONATED FOR ME. I SPOKE
WITH- A NUMBER OF THE STUDENTS
FROM PARADISE HIGH SCHOOL. YOU
KNOW THAT WERE BASICALLY
DISPERSED TO THE WENT AFTER THAT
DISASTER AND THAT THE SOCIAL AND
EMOTIONAL DISRUPTION THAT OCCURS
WHEN THAT HAPPENS IS I THINK
REALLY HARD TO OVERSTATE IT
IT'S- IT'S WORSE THAN KOPET. BY
A LOT- FOR KIDS. AND THEN I
THINK SPEAKING MORE BROADLY. THE
INSURANCE MARKET PLAYS A PIVOTAL
ROLE IN THE CAT THE RESIDENTIAL
INSURANCE MARKETS IN THE
CALIFORNIA ECONOMY. WE NEED
AVAILABLE. REASONABLY PRICED
HOMEOWNERS INSURANCE ENABLE IN
ORDER TO BUILD NEW HOMES WHICH
WE ALL KNOW THAT WE URGENTLY
NEED TO DO MORE OF IN CALIFORNIA
TO MAKE HOUSING MORE AFFORDABLE.
WE NEED IT SO THAT WE CAN
TRANSACT HOUSES THAT ALREADY
HAVE BEEN BUILT YOU KNOW TO
CREATE SO THE PEOPLE CAN MOVE
AND SELL HOME OR BUY A HOME IN
CALIFORNIA IF YOU WANT TO HAVE A
MORTGAGE YOU NEED TO HAVE
INSURANCE. AND I THINK THAT IS
REALLY WHAT IS UNDER THREAT ALL
OF THOSE THINGS IF WE CAN'T
CREATE THE FLEXIBILITY WE NEED-
IN THE INSURANCE MARKET DUE TO
CLIMATE CHANGE. WHY IS THAT
FLEXIBILITY MORE IMPORTANT TODAY
THAN IT HAS BEEN IN THE PAST.
DID THE INSURANCE PRICING SYSTEM
WE HAVE IS PRIMARILY BACKWARD
LOOKING BY DESIGN IT LOOKS AT
THE LAST TWENTY YEARS OF LOS AND
SAYS THAT'S A GOOD MODEL. FOR
PRICING THIS YEAR. AND THAT
WORKS REALLY WELL WHEN THE RISKS
ARE STABLE WHEN THEY'RE ON
CHANGING. THE PROBLEM NOW IS
THAT WE HAVE A RAPIDLY
ACCELERATING. CLIMATE CHANGE
PROBLEM. THAT'S INCREASING RISK
FOR CALIFORNIANS AND CLIMATE
CHANGE IS NOT THE ONLY BECAUSE
OF OUR WILDFIRE PROBLEM IF IT
WERE WE WOULD HAVE NO AGENCY WE
COULDN'T DO ANYTHING ABOUT IT
REALLY WE'VE SORT OF THE STOCK.
BUT IS THERE ARE THERE OTHER
THINGS WE CAN DO WHICH I'LL TALK
ABOUT BRIEFLY BUT WE NEED TO
THINK ABOUT WAYS TO CREATE
FORWARD LOOKING. PRICING AND
WAYS THAT ARE POLITICALLY
ACCEPTABLE TO ALL CONSTITUENTS
AND I WOULD NOT I WOULD BE THE
FIRST TO AGREE THAT IT CAN'T
JUST BE THAT. THERE'S A BLACK
BOX MODEL THAT'S PROPRIETARY
THAT NO ONE REALLY UNDERSTANDS
THAT'S BEING USED AS THE
JUSTIFICATION FOR A RATE
INCREASE BUT WE DO NEED TO START
THINKING ABOUT WHAT THE RISK IS
TODAY. RATHER THAN SOME WEIGHTED
AVERAGE OF WHAT IT HAS BEEN OVER
THE LAST TWO DECADES BECAUSE-
FRANKLY WHEN YOU LOOK BACK AT
THE FIRES TWO THREE TWO DECADES
AGO. THEY'RE KIND OF QUAINT BY
COMPARISON TO WHAT WE EXPERIENCE
TODAY ON A ROUTINE BASIS ASK ANY
FIREFIGHTER AND THEY'LL TELL
YOU. SO I'M- I WANT TO SPEND A
LITTLE BIT OF TIME JUST
EXPLAINING THIS THE SCIENCE FOR
WHY I AM CONCERNED ABOUT TODAY.
BUT ALSO NOT SO MUCH TODAY BUT
WHERE WE WILL BE IN A DECADE IF
WE DO NOTHING NOW. I PERSONALLY
THINK SEE THE INSURANCE MARKET
AS- CURRENTLY. STABLE BUT
FRAGILE. THAT WE HAVE YOU KNOW
WE HAVE A SITUATION WHERE.
NUMBER CERTAIN NUMBERS OF PEOPLE
IN VERY HIGH RISK AREAS ARE
LOSING AVAILABILITY TO ADMITTED
LINES COVERAGE AS SENATOR DODD
MENTIONED- BUT THE SITUATION IS
NOT OUT OF CONTROL IN THE SENSE
THAT. THERE IS THE FAIR PLAN.
AND INSURERS IMPORTANTLY ARE
STILL IN THE STATE. YOU CAN LOOK
TO OTHER STATES IN THE UNITED
STATES TO OBSERVE SITUATIONS
WHERE THINGS GOT REALLY OUT OF
CONTROL. AND THE INSURERS THE
BIG HOME INSURERS ESSENTIALLY
PULL OUT OF THE STATE. I THINK
FLORIDA IS THE POSTER CHILD FOR
THIS FLORIDA IS IN THE MIDDLE OF
A SECOND INSURANCE MELTDOWN. DUE
TO HURRICANE STRIKES THAT HAVE
OCCURRED OVER THE LAST COUPLE OF
YEARS IN THE LOSSES RELATED TO
THOSE. AND YOU KNOW. AS
CONSERVATIVE A PLACES AND FREE
MARKET PLACES FLORIDA IS YOU
KNOW THERE'S NO ATHEISTS IN
FOXHOLES AND WHEN THE INSURANCE
MARKET COLLAPSES WHAT HAPPENS IS
STATE INTERVENTION WHAT HAPPENS
IS THAT RISK TRANSFER BETWEEN
PRIVATE PARTIES. TURNED INTO
RISK RISK TRANSFER FROM PRIVATE
PARTIES TO THE STATE AND THE
STATE BALANCE SHEET. AND I THINK
WE NEED TO BE PREPARED FOR A
SITUATION WHERE WE HAVE A MAJOR
LOSS EVENT IN CALIFORNIA BECAUSE
WE WILL HAVE ANOTHER MAJOR
LOSSES I WISH I BELIEVE THAT WE
WOULD NOT. BUT I THINK WE'RE NOT
GONNA MOVE FAST ENOUGH TO AVOID
THAT AND WE NEED TO MAKE SURE
THAT OUR INSURANCE SYSTEM IS
RESILIENT TO THAT- ARM. SO WHY
WHY IS CLIMATE CHANGE MAKING
THIS PROBLEM. WORSE THERE'S A
COMMON MISUNDERSTANDING THAT.
THE IMPACTS OF CLIMATE CHANGE
WILL BE DUE TO GRADUALLY RISING
AVERAGE TEMPERATURES. RIGHT
WHAT'S THE WHAT WHAT IS THE
PARIS AGREEMENT TARGETS A TWO
DEGREES OR ONE HALF REASONABLY
KIND KNOWS WHAT THAT REALLY
MEANS TO THEIR DAY TO DAY LIVES
BUT- THEY'RE SORT OF THIS.
PICTURE THAT PROBABLY EVERYONE
HAS IT THEY CLOSE THEIR EYES OF
LIKE THAT GRADUALLY INCREASING
CURVE. THE REALITY IN.
CALIFORNIA AND IN MOST PLACES.
IS THAT THAT AVERAGE INCREASING
CURVE IS IMPORTANT BUT THE MORE
IMPORTANT THING. IS THE CHANGING
PROBABILITY OF EXTREME OUTCOMES.
RIGHT SO IT'S NOT SO MUCH THAT
THE TEMPERATURE IS A LITTLE BIT
WARMER IN THE SUMMER. IS THAT
IT'S THAT THE ODDS OF A ONE IN A
THOUSAND YEAR HEAT EVENT. TURN
INTO ONE IN TEN YEARS. WE
ACTUALLY OBSERVE THIS RECENTLY
IN- THE FIRES THAT OCCURRED IN
VANCOUVER- IN TWENTY TWENTY ONE
THEY WERE DEVASTATING. THAT WAS
A ONE THOUSAND YEAR HEAT EVENT
WE'RE ABOUT TO HAVE A VERY
SIMILAR EVENTS. THIS WEEKEND IN
ALBERTA AND FIRES ARE BURNING
OUT OF CONTROL IN ALBERTA RIGHT
NOW. RIGHT SO THAT'S THE KIND OF
SHIFT WE'VE SEEN A ONE THOUSAND
YEAR EVENT TURNED INTO A MAYBE A
ONE IN A FIVE YEAR EVENT WE'RE
NOT REALLY SURE ANYMORE BECAUSE
THE STATISTICS ARE CHANGING
QUICKLY. IN CALIFORNIA THIS IS
HAPPENING BECAUSE THE ATMOSPHERE
IS DRIER AND THIRSTIER DURING
THE FIRE SEASON. AND BECAUSE THE
ONSET OF THE RAINY SEASON HAS
BEEN DELAYED. BOTH OF THOSE
OUTCOMES RIGHT THIRSTIER
ATMOSPHERE DRYER SLIGHTLY WARMER
BUT ALSO DRIER AIR THAT KIND OF
SUCKS THE WATER OUT OF TREES.
ALSO OUT OF HOMES WHICH ARE DEAD
FUEL RIGHT. I WOULD STICK HOME
IS DEAD FUEL THAT CAN BURKE IF
WE'RE NOT CAREFUL ABOUT IT. BUT
ALL THESE THINGS DRY OUT FASTER
AND THEY HAVE A LONGER PERIOD OF
TIME DURING THE YEAR TO DRY.
WE'VE BEEN LUCKY THE LAST COUPLE
OF YEARS BECAUSE WE'VE HAD AN
ONSET OF THE RAINY SEASON AT A
MORE TYPICAL CALIFORNIA TIME
RIGHT WE HAD. RAIN IN MID
SEPTEMBER LAST YEAR WHICH PUT
OUT THE MOSQUITO FIRE WHICH IS A
VERY DANGEROUS WILDFIRE BURNING
TOWARD A NORTH LAKE TAHOE- BUT-
THE SCIENCE TELLS US. THAT THE
PRIOR YEARS WHEN THE MOST
DEVASTATING FIRES OCCURRED IN
LATE OCTOBER EARLY NOVEMBER EVEN
DECEMBER. RIGHT IS THE FUTURE.
AND SO WE NEED TO BE PREPARED
FOR THAT FUTURE. I THINK THAT.
THE AND SO THIS. THIS FUTURE THE
SHORTHAND THE WAY THAT I EXPLAIN
THIS. IS THAT. WE'VE HAD SOME
REALLY BAD FIRE SEASONS
PARTICULARLY THE TWENTY TWENTY
SEASON. THE TWENTY EIGHTEEN
SEASON WAS DEVASTATING TWENTY
SEVENTEEN WAS DEVASTATING IN
NAPA AND SONOMA COUNTIES. THOSE
SEEM LIKE. OPERATIONS RIGHT NOW
TO US LIKE ON BELIEVABLE
CALAMITIES. THOSE ARE GONNA BE
AVERAGE FIRE SEASONS. BY THE
NEXT DECADE. THAT IS WHAT THE
SCIENCE SAYS. SO WE NEED TO BE
READY FOR THAT WORLD. WE NEED TO
GET THE STATE READY WE NEED TO
GET COMMUNITIES READY AND WE
NEED TO GET THE INSURANCE MARKET
READY. THAT'S A HUGE CHALLENGE
IS A HUGE CHALLENGE FOR THIS
COMMITTEE AND FOR ALL OF YOU AND
YOUR OTHER JOBS WITHIN THE
CALIFORNIA SENATE IT'S A HUGE
CHALLENGE FOR THE GOVERNOR. BUT
I THINK BEING HONEST ABOUT WHERE
THE STATE IS HEADED ON THIS
ISSUE THAT IS WHAT WE NEED TO BE
PREPARED FOR. SO FAR. I THINK
OUR INSURANCE MARKET HAS DONE
OKAY CONSIDERING YOU KNOW. WE
CAN WE CAN WORRY ABOUT THE
ADMITTED LINES COVERAGE AND THAT
PUSHING PEOPLE INTO THE FAIR
PLAN BUT THE REALITY IS THAT
CLAIMS HAVE BEEN PAID. AND THE
INSURANCE COMPANIES DIDN'T GO
OUT OF BUSINESS RIGHT THAT'S A
FUNDAMENTAL DELIVERABLE FROM AN
INSURANCE MARKETS AND WE HAVE
THAT. ALSO THE FAIR PLAN SOLVENT
SO FAR AND THAT'S REALLY GOOD-
AND NOT NECESSARILY GUARANTEED
AT THE SAME TIME. WE HAVE A LOT
OF UNDER INSURANCE AND THAT'S
BEING DRIVEN TO SOME DEGREE BY
COMPETITION IN THE MARKET AND
THAT'S LEADING TO INEQUITABLE
OUTCOMES- THE- V. I AM. THE
STEPS BY CDI AND I. P. H. S. SO
FAR TO MAKE PROGRESS ON THAT I
THINK ARE HELPFUL. BUT THE
REALITY IS THIS IS WHERE I'M
GOING TO PART WAYS WITH A PRIOR
SPEAKER. I THINK THAT WE NEED TO
DEVELOP SOME SORT OF A METHOD.
THAT'S PUBLICLY ACCEPTABLE AND
IS TRANSPARENT. TO BRING SCIENCE
BASED METRICS FOR ESTIMATING
RISK INTO THIS CONVERSATION. AND
I WOULD I THINK THE BEST HOPE
FOR THAT IS ACTUALLY NOT TO MAKE
IT AN INSURANCE ONLY
CONVERSATION. I THINK THIS NEEDS
TO BE A CONVERSATION THAT CAL
FIRE IS A PART OF. THAT THE
UTILITIES ARE PART OF. THE
INDIVIDUAL THE PARTY SPENDING
THE MOST ON WILDFIRE RISK IN
CALIFORNIA BY FAR. ARE THE
ELECTRIC UTILITIES THEY'RE
SPENDING TEN BILLION DOLLARS PER
YEAR. ON RISK MITIGATION
IGNITION AVOIDANCE IN THEIR
TERMS. THAT COMPARES TO THE
MASSIVE INCREASE IN GENERAL FUND
AND GIGI R. F. REVENUES THAT
THAT THE LEGISLATURE AND
GOVERNOR HAVE DEVOTED. AND WE'RE
SPENDING SEVEN HUNDRED MILLION
DOLLARS A YEAR ON RISK
MITIGATION AS A STATE. SO FACTOR
OF TEN DIFFERENCE. IT'S ALSO
ABOUT TEN TIMES AS MUCH AS THE
US FOREST SERVICE SPENDING ON
FUELS MANAGEMENT CALIFORNIA. SO
WE NEED TO COORDINATE ALL OF
THIS AND WE NEED PUBLICLY
AVAILABLE PUBLICLY ACCEPTABLE
AND VETTED MODELS. SO THAT WEEK
THAT ARE USEFUL ACROSS ALL OF
THESE PER BECAUSE THIS CAN. WE
CANNOT INSURE OUR WAY OUT OF
THIS PROBLEM THE INSURANCE COSTS
WILL BE TOO HIGH IF WE DO NOT
ALSO REDUCE THE RISK MATERIALLY
AND SUBSTANTIALLY OVER THE NEXT
DECADE. AND IN ANY CASE. WE
DON'T WANT TO JUST PAY PEOPLE
MONEY. AFTER THEIR COMMUNITIES
HAVE BEEN DESTROYED NO AMOUNT OF
MONEY IS GOING TO MAKE IT OKAY
FOR SOMEONE WHO LIVED IN
PARADISE PRIOR TO THE CAMPFIRE.
NO AMOUNT OF MONEY IS GOING TO
BRING GRIZZLY FLATS BACK AS A
COMMUNITY. SO WE NEED TO BE
DOING THINGS TO REDUCE RISK. AND
FINDING AGREED UPON METRICS THAT
WORK ACROSS THE ECOSYSTEM SO
THAT A HOMEOWNER KNOWS WHAT TO
DO SO THAT OUR COMMUNITY KNOWS
WHAT TO DO SO THAT HELLFIRE HAS
GREAT RISK BASED ANALYTICS. TO
SAY THIS IS WHAT WE WILL FIND
AND THIS OTHER THING THAT YOU'D
LIKE TO DO ACTUALLY IT'S NOT AS
COST EFFECTIVE AS YOU MIGHT
THINK. BECAUSE WE'RE NOT GONNA
HAVE INFINITE MONEY DO THIS
ESPECIALLY AS WE ALL KNOW THIS
YEAR. IT'S A TOUGH YEAR IN THE
BUDGET WE'RE NOT GONNA BE
SPENDING LOTS OF EXTRA MONEY ON
THIS. EVEN AS WE CAN SEE WHAT IS
COMING DOWN THE ROAD. I WOULD
ARGUE THAT THIS PROBLEM IS
URGENT BECAUSE IT'S GONNA TAKE
TIME. JUST AS THE UTILITIES ARE
IN REALITY TAKE. A DECADE IF
WE'RE LUCKY TO GET OUT OF THE
HOLE THEY FOUND THEMSELVES IN.
AFTER ON A VERY BAD MORNING. IN
OCTOBER OF TWENTY SEVENTEEN.
RIGHT IT'S GONNA TAKE TIME FOR
CALIFORNIA COMMUNITIES TO
INVEST. IN THE KINDS OF
STRATEGIES THAT ARE REALLY GOING
TO PROTECT THEM. AND ALSO ALLOW.
NOT JUST FOR GOOD PRICING OF
INSURANCE FOR AVAILABILITY. AND
I THINK AVAILABILITY IS WHAT IS
FUNDAMENTALLY UNDER THREAT. WE
ALL NEED TO BEAR IN MIND THAT
THE FAIR PLAN I'M A PART TIME ON
A ON A WRAP UP WE ALL NEED TO
BEAR IN MIND THAT THE FAIR PLAN
IS A PRIVATELY FINANCED
OPERATION IT ONLY WORKS. IF YOU
IF THE INSURANCE COMPANIES ARE
HEARING CALIFORNIA. READY TO
FOOT THE BILL. AND IF IT GETS
TOO EXPENSIVE. THAT THAT'S UNDER
THREAT AND WE'VE SEEN THEM PULL
OUT OF OTHER STATES EVEN OTHER
BIG STATES LIKE FLORIDA- SO IN
CLOSE. AND CLOSE I JUST. WE
CANNOT INSURE OUR WAY OUT OF
THIS PROBLEM. WE NEED TO BE
INVESTING IN OUR COMMUNITIES TO
MAKE THEM SAFE. AND THAT'S GONNA
BE GOOD FOR THE CALIFORNIA
ECONOMY TO BEEF COMMUNITIES AND
ALSO TO BE GOOD FOR THE LOW AND
MODERATE INCOME PEOPLE IN
CALIFORNIA. THAT WE REALLY NEED
TO HELP SUPPORT AND UPLIFT
BECAUSE OF THE COST OF HOUSING.
THANK YOU. THANK YOU VERY MUCH
JUST. A FEW SECONDS OVERTIME BUT
WE REALLY WANT TO THANK YOU I
THINK I WANT TO BE A SCIENTIST
TODAY. WHERE WERE YOU IN MY
FOURTH GRADE CLASS WAS NEEDING A
SCIENCE LESSON BUT- IT WAS VERY
INFORMATIVE SO I'M GONNA. I'M
GOING TO GIVE MY COLLEAGUES AN
OPPORTUNITY TO ASK QUESTIONS SO
I'LL TURN IT OVER TO. SENATOR
DOT YOU MAY PROCEED. YES THIS
WAR. THIS IS WHY LIKE ACADEMICS
COMING IN AND- WORKING WITH US
ON. YOU KNOW HELPING SOLVE. THE
TYPE OF PROBLEMS THAT WE'VE BEEN
ASKED TO. SOLVE IT YOU HAVE BEEN
WITH THE- THE SENATE HELPING US
ON A LOT OF THESE ISSUES SINCE
TWO THOUSAND SEVENTEEN I CAN'T
TELL YOU HOW MUCH. I APPRECIATE
TIME AND EFFORT. I WISH I HAD
INCLUDED WHAT YOU SAY BECAUSE I
THINK. WHAT YOU TALKED ABOUT
ABOUT FUEL MANAGEMENT AND-
EVERYTHING. IS REALLY IMPORTANT
TO THE WHOLE. THE WHOLE
CONVERSATION IN TERMS OF. YOU
KNOW PERHAPS MAYBE EVEN GIVING
CONSUMER WATCHDOG CONFIDENCE TO.
DO MORE IN THIS AREA OR- OR ALSO
THE CONFIDENCE OF INSURANCE
COMPANIES. TO DO MORE IN THIS
AREA. BECAUSE THE STATE OF
CALIFORNIA THROUGH STATE
FUNDING. IF YOU LOOK AT WHAT
WE'VE DONE. IN TWO THOUSAND
SEVENTEEN WE HAD THREE BILLION
DOLLARS A WE WERE FUNDING. FOR
SUPPRESSION OF FIRES. BUT NEXT
TO NOTHING. FOR ITS- FOR
PREVENTING FIRES. AND SO WHAT DO
OUR FUNDING WE'VE CREATED A YELP
FUNDED. A LOCAL FIRE WISE
PROGRAMS THROUGHOUT THE STATE OF
CALIFORNIA. HOME HARDENING
PROGRAMS AND REBATES AND ALL
THOSE DIFFERENT THINGS REDUCTION
OF FUELS ON A BIG SCALE- AS
WELL- DO. CAL FIRE PERSONNEL ON
THE GROUND EARLY RESPONSE TEAMS-
A NEW AND IMPROVED AIR FORCE
THAT- THAT WE'RE DOING WITH
HELICOPTERS AND- AIRPLANES ARE
CRAZIER INCREASE IN THE- THE
CAPABILITIES. IN THE IDEA THAT
WE'RE EVER GOING TO BE DONE WITH
THIS. IS KIND OF WHAT IT TILL
CLIMATE- IT'S J. IS GONNA BE
IT'S COULD BE LIKE PAINTING THE
GOLDEN GATE BRIDGE YOU START AT
ONE END YOU FINISHING THIS MIGHT
HAVE BEEN YOUR LIFE TO. NOT
STEALING IT I LOVE IT YOU START
AT ONE END INTO THIS THE OTHER
THAN YOUR GOING BACK AGAIN. IT'S
STARTING AGAIN I LIKE YOUR IDEA-
YOU KNOW FRANKLY. ABOUT WORKING
. HE- WITH CONSUMER THE
INTERVENORS CONSUMER WATCHDOG-
WE'RE GETTING CAL BECAUSE IT
ISN'T JUST YOU'RE YOU'RE SO
RIGHT IT'S NOT JUST AN INSURANCE
COMPANY ISSUE IT'S A BIGGER
THING. WITH CLIMATE CHANGE AND I
GUESS ONE QUESTION I WANTED TO
ASK SO I DON'T SELL LIKE I'M
PONTIFICATING TWICE- IN THIS
HEARING. BUT IS THAT POSSIBLE
YOU THINK WELL IN IN IN HOW. IF
YOU'VE GIVEN ENOUGH THOUGHT ON
THAT- FIGURE OUT LIKE WHAT COULD
HAPPEN THERE ARE WHAT HOW THAT
MIGHT BE IMPLEMENTED. LAWCENTER
DODD- I WOULD JUST SAY BECAUSE
YOU KNOW I'M A BIG FAN OF YOUR
BILL SB FOUR THREE SIX THAT
WOULD CREATE A KIND OF
QUANTIFICATION MECHANISM THAT
YOU KNOW IS THAT THE SORT OF
MODELING. MECHANISM FOR THE
STATE TO START THINKING ABOUT
THIS PROBLEM- I THINK IT'S GONNA
TAKE SOME WORK BUT I THINK IT
CAN BE DONE YOU KNOW AND THERE'S
EARLY EXPERIMENTATION. ON THE
PART OF SOME OF THE FOLKS IN
THIS ROOM MIGHT POINT TO THE
WORK THAT NANCY WATKINS WHO'S
GOING TO BE TESTIFYING LATER HAS
DONE- TRYING TO UNDERSTAND WHAT
THE VALUE IS OF DIFFERENT
INTERVENTIONS TO KEEP
COMMUNITIES SAFE. WE NEED TO DO
MUCH MORE IN THERE AND THEY'RE
SOME PRIVATE COMPANIES THAT ARE
TRYING TO DO THIS ALSO GOOGLECSE
IS WORKING ON THIS FOR THE-
WILDFIRE YEAH THE- WAY. THE TASK
FORCE- THE WATER TASK FORCE- BUT
I GUESS MY VIEW IS WE NEED TO WE
NEED TO START. CREATING A- AND I
WOULD AGREE WITH YOU THAT THE
STATE HAS MADE. UNPRECEDENTED
INVESTMENTS OVER THE LAST
SEVERAL YEARS IN TRYING TO
REDUCE THE RISK OF WILDFIRE. I
GUESS THE POINT THAT I'M
PRESSING AS WE NEED TO SUSTAIN
THAT. AND WE NEED TO CREATE A
SUSTAINABLE MODEL FOR DOING THAT
THAT THAT. OVER TIME PERHAPS
GROWS TO BE AS BIG AS THE
CURRENT CAL FIRE. WILDFIRE
FIGHTING FORCE WHICH I DON'T
THINK WE'RE GONNA EVER CUT I
THINK THEY'RE GOING TO GROW TO
BECAUSE WE'RE GONNA NEED A- AND
WE'RE GONNA NEED THEM. TO BE
THERE WHEN WE ARE IN OUR IN OUR
MOST DESPERATE HOUR OF NEED AND
HOPEFULLY TO BE THERE. AND
OVERHEAD AS QUICKLY AS POSSIBLE-
SO IT'S A BOTH FANS. AND THIS IS
A COST OF CLIMATE CHANGE I MEAN
I JUST DON'T THINK THERE'S ANY
OTHER WAY AROUND IT. WE ARE.
GOING TO BE EXPERIENCING THESE
EFFECTS. ALMOST NO MATTER WHAT
HAPPENS WITH GREENHOUSE GAS
EMISSIONS FROM NOW UNTIL TWENTY
FIFTY. THAT'S SORT OF BAKED IN
AT THIS POINT THE EX THAT THE
TRAJECTORY THAT WERE ON. AFTER
TWENTY FIFTY IF THE PLANET DOES
REALLY AGGRESSIVE THINGS TO
REDUCE EMISSIONS VAN OUR FATES
DIVERGE. BUT BUT THE TRAJECTORY
WE'VE BEEN ON FOR THE LAST TWO
DECADES THINK ABOUT. THE FIRES
IN TWO THOUSAND THREE IN SAN
DIEGO. RIGHT THAT WAS.
CATACLYSMIC BY COMPARISON TO SAY
THE FIRES THAT THAT OCCURRED AT
THAT THE HISTORIC FIRES. THEIR
MOVIES YOU CAN LOOK AT ON
YOUTUBE CALIFORNIA OF THE MALIBU
FIRES AND THE FIRES IN SANTA
BARBARA IN THE NINETEEN
SEVENTIES. MY PARENTS WERE
EVACUATED FOR THAT ONE. AND DOES
LOOK QUAINT BY COMPARISON TO
WHAT HAPPENED IN TWO THOUSAND
THREE IN SAN DIEGO. AND AGAIN IN
TWO THOUSAND NINE. AND THAT
STUFF LOOKS QUAINT BY COMPARISON
TO WHAT HAPPENED IN NAPA AND
SONOMA. IN TWO THOUSAND
SEVENTEEN AT PARADISE TO TWENTY
EIGHTEEN AND THAT'S THE
TRAJECTORY THAT WE ARE ON. UNTIL
AT LEAST TWENTY FIFTY. IT'S JUST
WHAT I'VE GOT. YEAH I REMIND
EVERYONE THAT WE NEED TO I HAVE
TO GO AT ALL I'M GONNA TRY TO
MAKE IT BACK HERE. I THINK THE
TAKE AWAY FOR ME FOR THIS IS.
LOOK AT WE CAN HAMMER IF WE WANT
PROP ONE OF THREE ALL DAY LONG.
IT'S IN PLACE IT'S NOT GOING
AWAY. WE CAN HAMMER INSURANCE
COMPANIES ALL DAY LONG THEY'RE
NOT PERFECT BY ANY STRETCH OF
THE IMAGINATION EITHER- BUT
THEY'RE NOT GOING AWAY WE NEED
TO WORK WITH THEM. SAME WITH CAL
FIRE THE INSURANCE COMMISSIONER
WHAT I LIKE YOUR IDEA I THINK
IT'S STUCK HI TIME THAT WE ALL.
YOU KNOW GET TOGETHER GET TO
WORK ON TRYING TO FIND REAL
SOLUTIONS TO THESE PROBLEMS
GOING FORWARD SO I WANT TO THANK
YOU VERY MUCH. AND THANK YOU
THANK YOU SENATOR DINO THAT YOU
HAVE TO GO TO ANOTHER HAS A
COMMITTEE- ANY QUESTIONS ANY
CONCERNS. CHECK THANK YOU VERY
MUCH THAT WAS VERY INFORMATIVE
AND I JUST WANT TO SHARE THAT
JOB. YOU KNOW IT'S THE SCIENCE
THE DATA BEHIND WHAT WHAT YOU
SAID THAT REALLY IS COMPELLING
TO ME BECAUSE- I'M YOU KNOW WHEN
WE TALK ABOUT- YOU KNOW
INSURANCE IMPROPER NOT THREE AS
US SENATOR DOT STATED IT JUST
SEEMS VERY ACADEMIC THAT. I WAS
PART OF THE INITIAL DOTS WHILE
FOR WORKING GROUP IN TWENTY.
EIGHTEEN I THINK IT WAS I WAS
THE COACH OF THE FIRE WHILE FOR
WORKING GROUP. LAST YEAR WITHOUT
SENATOR MCGUIRE. AND STE EIGHT
EIGHT THE DIFFERENCE HERE IS
THAT WE'RE HERE IN A COMMITTEE
HEARING ALL THE DATA I AM VERY
SCIENTIFIC TRENDS BUT YOU KNOW
WE HAVE THE OPPORTUNITY TO
VISIT. IMPACTED COMMUNITIES YOU
TALK TO REAL PEOPLE WHO ARE
STRUGGLING. TREMENDOUSLY IN THE
AFTERMATH OF THESE YOU KNOW
WILDFIRES- I WAS IN THE MALIBU
FIRE BETWEEN THAT AREA AND YOU
TALK YOU KNOW. PEOPLE THINK OF
MALIBU AS A VERY WEALTHY UP
PLACE BUT THERE IS A COUPLE OF
OUR COMMUNITIES THAT WERE. THEY
HAD TO- YOU KNOW THE PEOPLE THAT
LIVED IN COMMUNITIES OF YOU KNOW
IN TRUCKS AND THEN THEY HAD TO-
I MEAN I JUST I WAS BAFFLED BY
THE FACT- JUST. SURPRISED THAT
THERE'S THIS WHOLE COMMUNITY
THAT IS VERY HUMBLE. NESTLED IN.
THE MOUNTAINS OF MALIBU THEY'VE
LOST EVERYTHING AND SO WHEN WE
HAVE THESE PERSONAL CONNECTIONS.
YOU KNOW WE HAVE TO HAVE
SOMEONE. PULL AWAY FROM THE
SCIENCE AND WHAT WE'RE HEARING
BY REALLY CONSIDER WHAT'S
HAPPENING ON THE GROUND LEVEL
SO. I HAD THE UNFORTUNATE TASK
OF ACTUALLY SPEAKING TO PEOPLE
SPEAKING TO CHILDREN. AS I
MENTIONED FIREFIGHTERS WHO WERE.
STILL DEALING WITH SOME OF THE
AFTERMATH OF MENTAL HEALTH
ISSUES OF WHAT THE WITNESS AND
SELF. SO I TAKE ALL THAT INTO
CONSIDERATION BUT WE JUST WANT
TO THANK YOU AND I. DEFINITELY
WANT TO KEEP INVITING YOU TO SEE
IF WE CAN CONTINUE THE
CONVERSATION I WAS VERY VALUABLE
ONE THING THAT STOOD OUT TO ME
AS YOU KNOW AS YOU WERE TALKING
ABOUT INSURANCE. ON
SUSTAINABILITY TALKED ABOUT HOW
WE DON'T. FIGURE SOMETHING OUT
SEWER AT AT SOME POINT BUT YOU
KNOW IT'S THE RESTAURANTS FOR
FROM. YOU KNOW PRIVATE TO THE
STATE AT SOME POINT IT'S GOING
TO BE ON THE STATE TO. HAVE TO
PAY FOR IT RIGHT NOW WE'RE
DEALING WITH A- YOU KNOW A
LITTLE BIT OF A- YOU KNOW A
DEFICIENCY IN TERMS OF OUR
BUDGET AND SO WE NEED TO FIGURE
THIS OUT SOON SO. I WON'T KEEP
YOU ANY LONGER WE THANK YOU AND
I'LL KEEP CALLING YOU. FOR MORE
INFORMATION. UP THANK YOU VERY.
SO WE'RE GONNA INVITE NEXT-
PANEL UP. TO JUST- WE HAVE- WITH
US. K. A. I MENTIONED EARLIER
THAT TECH COMMISSION ARCTIC
OTHER LOT OF WROTE THE NATION'S
FIRST CLIMATE INSURANCE LAW SB.
THIRTY TO EXPLORE INNOVATIVE
STRATEGIES THAT REDUCE. THE RISK
HE HAS APPOINTED A WORKING GROUP
WHICH ON. OUR GONNA HEAR ABOUT
IT IN JUST A FEW MINUTES- AND SO
I'M JUST GOING TO TURN IT OVER
TO YOUR TIME IS I GET A LITTLE
LIMITED. OUR PRESENTERS MIKE
PETERS AND DEPUTY COMMISSIONER
FOR CLIMATE. AND SUSTAINABILITY
OF THE CALIFORNIA DEPARTMENT OF
INSURANCE AND- HERE TO. DISCUSS
THAT TASK FORCE WITH US YOU MAY
PROCEED WHEN YOU'RE READY. THANK
YOU. THANK YOU TERRY. I'M IN
GOOD MORNING- TO RUBIO BY
CERTAIN WHEN. MEMBERS OF THE
COMMITTEE THANK YOU FOR THE
INVITATION TO TESTIFY HERE TODAY
. MY NAME IS MIKE PETERSON I
SERVICE DEPUTY COMMISSIONER FOR
CLIMATE SUSTAINABILITY. OF THE
CALIFORNIA DEPARTMENT OF
INSURANCE UNDER THE LEADERSHIP
OF INSURANCE COMMISSIONER
RICARDO LARA. I WAS ASKED BY THE
COMMITTEE TO SPEAK ON HOW THE
DEPARTMENT HAS APPROACHED
CHALLENGES OF CLIMATE CHANGE THE
NEW PARTNERSHIPS AND INNOVATION.
OUR NUMBER ONE PRIORITY OF THE
DEPARTMENT ITS CONSUMER
PROTECTION. THAT INCLUDES IN THE
CONTEXT OF CLIMATE CHANGE IN
INSURANCE. TACKLING THE CORE
ISSUES. OF CLIMATE CHANGE AND
BUILDING MORE RESILIENCE IN OUR
COMMUNITIES. THE BEST LONG TERM
RESILIENCE STRATEGY IS A
DRAMATIC REDUCTION IN THE
EMISSIONS THAT CAUSE CLIMATE
CHANGE. YEAH EVEN IF WE ARE ABLE
TO QUICKLY MOVE TO A LOW CARBON
ECONOMY. THE PAST EMISSIONS HAVE
ALREADY LOCKED IN RISING
TEMPERATURES AND INCREASING
CLIMATE IMPACTS FOR THE
FORESEEABLE FUTURE. AND WE NEED
TO SEIZE EVERY OPPORTUNITY TO
ADAPT TO AND BOUNCE BACK FROM
CLIMB INTENSIFIED EVENTS. THE
DEPARTMENT OF MANY GOVERNMENTS
THROUGHOUT OUR STATE AND THE
NATION ARE FACING TREMENDOUS
CHALLENGES IN THE FACE OF
CLIMATE CHANGE. INTENSIFYING
WILDFIRES EXTREME HEAT EVENTS
AND FLOODING AND ALSO CAUSING
COASTAL SEA LEVEL RISE. AT THE
SAME TIME PROTECTION GAPS WHICH
IS THE GAP BETWEEN THE TOTAL
COSTS OF A DISASTER. AND THE
COST COVERED BY INSURANCE ARE
GROWING. SO TO STRENGTHEN
RESILIENCE WE NEED TO REDUCE
RISKS FOR ENTIRE COMMUNITIES AND
CLOSE PROTECTION GAPS TODAY AND
MOVING FORWARD. THE SOLUTION IS
TO ACCELERATE CLIMATE RISKS HAVE
TO BE COMPREHENSIVE AND
MEASURABLE. WHICH REQUIRE
COLLABORATIONS WITH STAKEHOLDERS
AND COLLECTIVE ACTION ACROSS
JURISDICTIONS. TODAY I WANT TO
HIGHLIGHT FOUR KEY AREAS WERE
COMMISSIONER LARA AND THE
CALIFORNIA APARTMENT INSURANCE
HAVE CREATED NEW COLLABORATIONS.
THAT ARE PROVIDING THE VISION
AND AN ACTION PLAN ON SOLUTIONS
THAT CAN HELP EMPOWER. SAVE FOR
RESILIENT COMMUNITIES. FIRST AS
YOU MENTIONED IS THE CONVENING
OF THE COMMISSION IS CLIMBING
INTERNS WORKING GROUP. AND IT'S
PROOF- AND PRODUCING THE FIRST
OF ITS KIND CALIFORNIA CLIMB
INSURANCE REPORT. SECONDLY THE
LAUNCHING OF THE INTERAGENCY
PARTNERSHIP BETWEEN THE
DEPARTMENT INSURANCE CALORIE S.
HOW FIRE. THE CALIFORNIA PUBLIC
UTILITIES COMMISSION AND THE
GOVERNOR'S OFFICE OF PLANNING
RESEARCH TO CREATE THE SAVER
FROM WILDFIRES FRAMEWORK. THIRD
CREATING THE FIRST EVER
SUSTAINABLE INSURANCE RUN MATH
IN PARTNERSHIP WITH THE UNITED
NATIONS. AND FOURTH LEADING THE
U. S. STATE REGULATORS TO THE
NATIONAL CLIMATE POLICY FOR THE
INSURANCE SECTOR. COMMISSION
LAWYERS CLAIM INSURANCE WORKING
GROUP CONVENED IN TWENTY
NINETEEN IS CHAIRED BY FORMER
SPECIAL ASSISTANT TO PRESIDENT
OBAMA ON RESILIENCE POLICY.
ALICE HILL AND CONSISTS OF
EIGHTEEN MEMBERS INCLUDING
PUBLIC POLICY LEADERS INSURANCE
SECTOR EXPERTS ACADEMIC
RESEARCHERS AND ENVIRONMENTAL
GROUPS. INCLUDING AND
ENVIRONMENT DEFENSE FUND THE
GREEN LINE INSTITUTE. NATURISTS
FIRST OFFENSE COUNCIL THE
AUDUBON SOCIETY AND THE NATURE
CONSERVANCY. IN THE SUMMER OF
TWENTY TWENTY ONE THE WORKING
GROUP PUBLISHED THE CLIMB
INSURANCE REPORT ENTITLED
PROTECTING COMMUNITIES
PRESERVING NATURE. AND BUILDING
RESILIENCE HELLO FIRST OF ITS
KIND CLIMB INSURANCE WILL COMBAT
THE COST OF WILDFIRES EXTREME
HEAT AND FLOODS. THE REPORTS
ITSELF FORTY RECOMMENDATIONS
GUIDING STRATEGIES TO STRENGTHEN
COMMUNITY PROTECTION. INVESTING
ENSURE NATURE BASED SOLUTIONS
CLOSE PROTECTION GAPS. AND THE
PAIR TOGETHER RISK REDUCTION
WITH INSURANCE POLICIES.
INSURANCE IS THE CORNERSTONE OF
COMMUNITY RESILIENCE AND THE
WORKING GROUP RECOGNIZED THAT
ACCELERATING CLIMATE RISKS. AND
WHY PROTECTION GAPS POSE A
CONCERN SCENARIO. WHEN SEVERE
CLIMATE EVENTS OCCUR WHO IS LEFT
BEHIND. WITHOUT GREATER
INVESTMENT RISK REDUCTION
IMPROVED TOOLS FOR FINANCIAL
RESILIENCE COMMUNITIES ARE
LIKELY TO ENTER A DAMAGING
FEEDBACK LOOP. ONE WERE
ESCALATING RISKS LEADS TO
INCREASE LOSSES. THAN THOSE
LOSSES BECAUSE FINANCIAL
BACKSLIDING FEWER INSURANCE
OPTIONS AND DIMINISHED CAPACITY
FOR FUTURE RESILIENCE. SUCH A
SCENARIO WOULD FURTHER
EXACERBATE INEQUITIES IN OUR
SOCIETY. SO THE CORE OF THE
COMMISSION SUPPORTED THE
RECOGNITION CALIFORNIA'S BOTH
REDUCE CLIMATE RISK IMPACTS AND
CLOSE PROTECTION GAPS IN ORDER
TO PROTECT OUR MOST VULNERABLE
POPULATIONS. THE REPORT'S
RECOMMENDATIONS ALIGN WITH FOUR
ESSENTIAL ELEMENTS OF RISK
MANAGEMENT. NAMELY STRENGTHENED
HOW WE ASSESS RISK. IMPROVE A
RISK COMMUNICATION. EXPAND RISK
REDUCTION AND CLOSE PROTECTION
GAPS BY EXPANDING INSURANCE
SOLUTIONS ALSO KNOWN AS RISK
TRANSFER SOLUTIONS. RISK
ASSESSMENT IS A CRITICAL
FOUNDATION AND UNDERSTANDING OF
CLIMATE THREATS VULNERABILITIES
IN IMPACTS REQUIRES ROBUST RISK
ASSESSMENTS. THIS UNDERSTAND CAN
GUIDE DECISIONS ON HOW
COMMITTEES PRIORITIZE MITIGATION
HOW AND WHERE WE BUILD AND
REBUILD RESILIENT STRUCTURES AND
INFRASTRUCTURE. AND HOW TO
EXPAND INSURANCE COVERAGE
OPTIONS. ONCE A STRONG RISK
ASSESSMENTS IN PLACE THAT
INFORMATION MUST BE WIDELY
COMMUNICATED TO PROMOTE NOT ONLY
RISK AWARENESS BUT ALSO THE
BURDENS OF RECOVERY. SO THE
INDIVIDUALS LOCAL MUNICIPALITIES
AND STAKEHOLDERS CAN MAKE MORE
RESILIENT DECISIONS. SERVICE
REDUCTIONS BOTH THE CENTRAL
OFTEN VERY COST EFFECTIVE
ACCORDING TO NATIONAL ZOO FOR
BUILDING SCIENCES EVERY DOLLAR
PRE DISASTER MITIGATION SAVES
FIVE TO SEVEN DOLLARS AND AVOID
FUTURE INSURANCE LOSSES HELPING
MAKE INSURANCE MORE AVAILABLE.
AND AFFORDABLE. THE REPORT
RECOMMENDATIONS EMPHASIZE THE
ROLE AND THE VALUE OF NATURE
BASED SOLUTIONS AND RISK
MITIGATION. AND THAT THE
CLEAREST PATH TO REDUCING FUTURE
LOSSES IS BUILDING BETTER. AFTER
CONSIDERING IMPORTANT UPSTREAM
FACTORS OF RISK ASSESSMENT RISK
COMMUNICATION RISK REDUCTION THE
WORKING GROUP FOCUSED ON
INSURANCE SOLUTIONS. AND THAT'S
BECAUSE RELIABLE INSURANCE IS
CENTRAL TO DISASTER FINANCIAL
RESILIENCE FUNDING REPAIRS AND
REBUILDING. SO MANY THE MANY
COMMON THREADS OF THEIR POOR I
WILL HAVE A THREE SIGNIFICANT
THEMES REFLECTING THE REPORT'S
RECOMMENDATIONS AND SOLUTIONS
TODAY- FIRST IS THAT SOLUTIONS
MUST BE COMPREHENSIVE AND CROSS
CUTTING. AMONG THE
RECOMMENDATIONS EIGHTEEN OF THE
FORTY ARE CROSS CUTTING WHICH
MEANS SIMULTANEOUSLY FOCUSING ON
MULTIPLE PERILS. THAT FLOOD
WILDFIRE EXTREME HEAT- AND
INCLUDING LAND USE BUILDING
PRACTICES AND NATURE BASED RISK
REDUCTION STRATEGIES AND
SOLUTIONS. SECONDLY COMMUNITY
MITIGATION IS ESSENTIAL. AND THE
PATH TO ACHIEVE STRONGER
COMMUNITY RISK MITIGATION. COVER
SEVERAL THE RECOMMENDATIONS IN
THE REPORT INCLUDING MAKING
GREATER INVESTMENTS IN HOME HER
NAME EXPANDING NATURE BASED
SOLUTIONS AND COMMUNITY
INSURANCE THROUGH PILOT
PROJECTS. AND IMPROVING RISK
COMMUNICATION TO WARN VOLATILE
COMMUNITIES IN ADVANCE OF
DISASTERS. AND THIRDLY NATURE IS
AN ALLY WETLANDS REDUCED FLOOD
LOSSES FORCE MANAGEMENT CAN
REDUCE WILDFIRE RISK IN URBAN
FOREST REDUCE EXTREME HEAT
IMPACTS. THE WORKING GROUP
HIGHLIGHTED EXAMPLES ARE NATURE
COULD REDUCE RISKS AND EXPAND
INSURANCE OPTIONS. THIS
COLLABORATIVE GROUP AND THE
REPORT HAVE ALREADY PRODUCED
INNOVATIVE DELIVERABLES I'VE
SELECTED THREE TO HIGHLIGHT HERE
TODAY. IN TWENTY TWENTY TO THE
STATE LEGISLATURE PASSED AND
GOVERNOR GAVIN NEWSOM SIGNED AB
TWENTY TWO THIRTY EIGHT
SPONSORED BY COMMISSIONER LARA.
THE DIRECT DIRECTS THE
DEVELOPMENT OF A STATE WIDE
EXTREME HEAT HEAT EXTREME HEAT
RANKING SYSTEM FOR CALIFORNIA.
THIS IS THE FIRST SUCH RANKING
SYSTEM IN THE WORLD AND WILL
HELP LOCAL GOVERNMENTS PREPARE
INTERVENE AND MITIGATE THE RISKS
OF EXTREME HEAT. IF COMMUNITIES
CAN REDUCE OR EVEN AVOID DAMAGE
FROM FUTURE DISASTERS EVENTS THE
RECOVERY COSTS BECOME MORE
MANAGEABLE. MAKING LIVES MANY
LIVES CAN BE SAVED AND FUTURE
INSURANCE COSTS LOWERED.
SECONDLY ALSO IN TWENTY TWENTY
TO THE STATE LEGISLATURE PASSING
GOVERNOR SOME SIGN SENATE BILL
EIGHT FIFTY TWO. AUTHORED BY
SENATOR DODD- AND SPONSORED BY
COMMISSIONER LARA AND CIVIC WELL
WHICH AUTHORIZES THE CREATION OF
NEW CLIMATE RESILIENCE DISTRICTS
PROVIDING LOCAL GOVERNMENTS WITH
THE TOOL. TO BECOME MORE
RESILIENT TO CROSS
JURISDICTIONAL CLIMATE RISKS AND
ACHIEVED A SUSTAINED FUNDING FOR
RESILIENCE AND RISK REDUCTION
PROJECTS. AND THIRD THE
DEPARTMENT OF STRENGTH IN HOME
HARD INCENTIVES THROUGH
INTERAGENCY PARTNERSHIPS AND YOU
STATEWIDE REGULATIONS WHICH I
WILL DESCRIBE NEXT. MR LARS
PARTNERSHIP WITH GOVERNANCE AND
ADMINISTRATION ON THE SAFER FROM
WILDFIRES FRAMEWORK. IS THE
SECOND POINT A HIGHLIGHT. THE
MOST DIRECT PATH FOR INSURANCE
TO BECOME MORE AVAILABLE AND
AFFORDABLE IN THE FUTURE IS TO
BRING DOWN THE RISKS ARE HOMES
AND COMMUNITIES. THAT IS WHY
COMMISSIONER HAS RELENTLESSLY
FOCUSED ON PRIORITIZING WILDFIRE
SAFETY. INSURANCE HAS
HISTORICALLY BEEN A PRICING RISK
AND BEING A SOURCE OF RESILIENCE
FUNDING THAT OCCURS AFTER
DEVASTATING WILDFIRE OR FLOOD.
WHAT WE'RE DOING AT THE
DEPARTMENT'S TAKING ACTIONS THAT
CHANGE THE WAY THE INSURANCE
WORKS THE INSURANCE NOT ONLY
PROVIDES PROTECTION AFTER
DISASTER. BUT ALSO INCENTIVIZE
RISK REDUCTION BEFORE A DISASTER
OCCURS THE SAVING LIVES REDUCING
LOSSES IN BRINGING DOWN COSTS.
TO GET TO THE SAVER FROM
WILDFIRES FRAMEWORK. IN TWENTY
TWENTY ONE COMMISSIONER LARA
CONVENE THE STATE'S MAJOR
WILDFIRE PREPAREDNESS AGENCIES
WHICH INCLUDE HELLO YES THE
GOVERNOR'S OFFICE OF PLANNING
RESEARCH THE CALIFORNIA PUBLIC
UTILITIES COMMISSION. AND THE
CALIFORNIA DEPARTMENT OF
FORESTRY AND FIRE PROTECTION. TO
ESTABLISH A LIST OF PRIORITY
HOME AND COMMUNITY HARDING
ACTIONS FOR INSURANCE. WE MET
WITH RESEARCH EXPERT FROM THE
INSTITUTE OF BUSINESS AND HOME
SAFETY. THE UNIVERSITY OF
CALIFORNIA. AND WITH CONSUMER
GROUPS INSURANCE TRADE
ASSOCIATIONS AND FIRE CHIEFS
AMONG OTHERS AND CAME UP WITH A
CONSENSUS OF CORE HOME HARDENING
ACTIONS. AND COMMUNITY
MITIGATION DESIGNATION. ACTIONS
THAT ARE CLEAR AND CONSISTENT.
EFFECTIVE AND ACHIEVABLE. THE
SEVERAL WILDFIRES FRAME WAS
RELEASED IN FEBRUARY OF TWENTY
TWENTY TWO. THE LIST OF ACTION
START WITH STRUCTURE HARDENING
AND WORK OUTWARD FROM THE
STRUCTURE TO THE SURROUNDING
PROPERTY. AND ALSO WORK THAT CAN
BE DONE TOGETHER AS ENTIRE
COMMUNITIES. FOR COMMERCIAL OR
DID TO MAKE THE RIVER WILDFIRES
MOST IMPACTFUL WAS TO WRITE THE
FIRST EVER REGULATIONS BY ANY US
STATE. TO REQUIRE INSURANCE
COMPANIES TO PROVIDE INCENTIVES
TO POLICY HOLDERS WHO TAKE THESE
HOME COMMITTEE HARDING ACTION.
THE REGULATIONS ARE FINALIZED
LAST OCTOBER. AND INSURANCE
COMPANIES HAVE TO MAKE NEW
FILINGS TO COMPLY WITH THE RULES
LAST MONTH. EVERY INSURANCE
COMPANY WRITING RESIDENTIAL OR
COMMERCIAL COVERAGE THE PRICES
INSURANCE BASED ON WELFARE RISK
IS REQUIRED TO PROVIDE THESE
INCENTIVES. PROVIDING A STATE
WIDE CROSS JURISDICTIONAL
INCENTIVE FOR ADAPTING TO
CLIMATE CHANGE. INSURANCE
PRICING IS ONE INCENTIVE. BUT
THERE ALSO BE STATE GRANTS AND
LOCAL GRANTS THAT CAN HELP
NEIGHBORHOODS IN HOMEOWNERS
ACHIEVE ACTIONS ACROSS THE STATE
FROM WILDFIRES FRAMEWORK. MY
THIRD POINT TO HIGHLIGHT. TODAY
IS HOW WE ACHIEVE A
COMPREHENSIVE APPROACH TO
INSURANCE SOLUTIONS. LAST
NOVEMBER COMMISSIONER LARA
ENTERED INTO HISTORIC
SUSTAINABLE INSURANCE ROAD MAC
WITH THE UNITED NATIONS
PRINCIPLES FOR SUSTAINABLE
INSURANCE INITIATIVE. THIS
ROADMAP OUTLINES KEY ACTIONS
THAT REGULATORS INSURANCE
COMPANIES NEED TO MAKE NEED TO
TAKE. TO PROTECT CONSUMERS AND
TO CREATE MORE SUSTAINABLE
INSURANCE MARKETS. WE NOW HAVE A
STRATEGIC VISION AND AN ACTION
PLAN WITH FOUR GOALS TO
STRENGTHEN CONSUMER PROTECTIONS
MOVING FORWARD. YOU HAVE FIVE
MINUTES REMAINED THANK YOU. ALL
WRAPPED UP. A FIRST REDUCE
GREENHOUSE GAS EMISSIONS IN
EVERY SECTOR OF OUR ECONOMY.
SECOND CLOSE PROTECTION GAPS FOR
VULNERABLE COMMUNITIES THIRD.
KEEP INSURANCE AVAILABLE AND
AFFORDABLE AND FOURTH. CREATE
COMMUNITY PROTECTION FROM
CLIMATE THREATS. TO CHIEF THE
SCHOOL THE ROADMAP DETAILS FOR
STRATEGIES. WE WILL TRANCE WE
WILL STRENGTHEN TRANSPARENCY IN
AND FINANCIAL OVERSIGHT OF THE
INSURANCE INDUSTRY. SUPPORT THE
TRANSITION TO SUSTAINABLE ENSURE
IN SUSTAINABLE INVESTMENT
STRATEGIES. CATALYZE THE SENATE
WILL INSURANCE PRODUCTS
INCLUDING CLIMB INSURANCE
POLICIES THAT PROTECT ENTIRE
COMMUNITIES. AND POLICIES THAT
DRIVE DOWN EMISSIONS. AND IN
THOSE THAT INCENTIVIZE RISK
MITIGATION. AND FOURTH TO CREATE
MORE RESILIENT COMMUNITIES BY
IMPLEMENTING THE CLIMB INSURANCE
REPORT. LASTLY I WILL HIGHLIGHT
NATIONALLY OR SHIPPED TO THE
NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS. MISTER
LAWRENCE LARA SERVES AS THE CO
CHAIR OF THE CLIMATE AND
RESILIENCY TASK FORCE WHICH HAS
BIPARTISAN LEADERSHIP. AND LEADS
NATIONAL EFFORTS TO ADDRESS
CLIMATE RISKS IN THE INSURANCE
SECTOR INCLUDING CLIMATE RISK
DISCLOSURE WHERE WE HAVE BEEN
ABLE TO GO FROM GETTING ZERO T.
CFT CLIMATE DISCLOSURES IN
TWENTY EIGHTEEN. TO NEARLY 80%
OF THE U. S. MARKET IN TWENTY
TWENTY TWO. ON THE THROUGH THE
ACRONYM OF T. CFD THIS IS THE
INTERNATIONAL STANDARD- FOR
CLIMBERS DISCLOSURE THAT THAT'S
REQUIRED IN FRANCE NEW ZEALAND
SWITZERLAND AMONG OTHERS. SO
INCLUSION IN CONCLUSION
COLLABORATION AND INNOVATION
HAVE LED TO REAL DELIVERABLES
THAT PROTECT THE CALIFORNIA
PUBLIC PROVIDE TOOLS TO REDUCE
FUTURE INSURANCE LOSSES AND
SUPPORT INSURANCE AVAILABILITY.
WITH ME CRITICAL PROGRESS BUT
THE WORK IS NOT COMPLETE. AND
THE RISK CONTINUE TO PRESENT
CHALLENGES. LOOKING FORWARD THE
COMMISSIONERS CLIMB INSURANCE
WORKING GROUP CONTINUES TO
PROVIDE EXPERTISE AND
REFINEMENTS TO ASSIST OUR
IMPLEMENTATION OF THE CLIMB
INSURANCE REPORT RECOMMENDATIONS
. THE COMMISSIONERS SAVER FROM
WILDFIRES REGULATIONS ARE BEING
IMPLEMENTED. AND WE'RE WORKING
WITH LOCAL FIRE PROFESSIONALS
LIKE THE CAL CHIEFS WHO ARE
TESTIFYING LATER TODAY. TO ALIGN
WILDFIRE PREVENTION PRIORITIES
AND ACTIONS. WE CONTINUE TO TAKE
ACTIONS LAID OUT IN THE
SUSTAINABLE ENTRANCE ROAD MAP
WITH UNITED NATIONS. AND TO
BUILD BROADER MULTI STATE
COALITIONS WITH OUR INSURANCE
REGULATOR COLLEAGUES TO BETTER
ADDRESS THE SHARED CHALLENGES
THE CROSS STATE BORDERS. OUR NEW
PARTNERSHIPS THAT PRODUCE THE
CLIMB INSURANCE REPORT AND THE
SUSTAINABLE INSURANCE ROADMAP
HAVE ESTABLISHED A BACKBONE OF
ACTIONS THAT IS FOCUSED AND
COMPREHENSIVE. NOT ERRATIC OR
PARTIAL. FOR CONSUMERS IF WE
REDUCE RISKS ASSOCIATED CLIMATE
CHANGE WE WILL BE PROVIDING MORE
FLEXIBILITY THROUGH GREATER
INSURANCE OPTIONS. AND THE
ABILITY TO MITIGATE RISK TO
THEIR HOMES BUSINESSES AND
LIVES. WITH THE LEADERSHIP OF
THE CALIFORNIA TERMS REGULATOR
WE ARE SHIFTING THE THINKING ON
HOW INSURANCE CAN PROMOTE RISK
MITIGATION. HOW WE BUILD. HOW WE
INCORPORATE NATURE. AND THE NEW
DATA WE CAN COLLECT TO SUPPORT
SUSTAINABILITY. THESE NEW
PARTNERS ARE MAKING OUR
INSURANCE MARKET MORE RESILIENT
AND ITS EMERGING CHALLENGES.
THANK YOU FOR THE OPTION TO BE
HERE AND I'M PLEASED TO TAKE
YOUR QUESTION. THANK YOU VERY
MUCH FOR THAT INFORMATION- I'VE
BIRTH WILL TURN IT OVER TO- MY
COLLEAGUE IF YOU HAVE ANY
QUESTIONS. YEAH THANK YOU FOR
THIS INFORMATION AND DIE I MAY
INVITE YOU AT A LATER TIME I
WANT I WOULD WANT TO GO DEEPER
INTO THE- I DID THE FOUR KEY
ELEMENTS THAT THAT YOU'VE
IDENTIFIED IN THE WORKING GROUP
WHICH IS RISK ASSESSMENT RISK
COMMUNICATION RISK FOR BREAST
REDUCTION ARREST. TRANSFERRED
THIRTY WERE- NOT GOING TO HAVE
TIME TODAY BUT I WANTED TO SHIP
TO LITTLE SO THIS IS VERY
INFORMATIVE AND AGAIN IT WE
WOULD HAVE TO. DIVE DEEPER AND
WE DON'T HAVE THE TIME RIGHT NOW
BUT I DO WANT TO JUST GO BACK
SINCE YOU KNOW EARLIER WE WERE-
DISCUSSING WITHOUT- HARVEY
ABOUT- JUST AT THE TIME IT TAKES
TO. TO APPROVE THE RATES AND WE
GET AN OPPORTUNITY TO RESPOND
BECAUSE I KNOW THAT- LAST TIME.
YOU KNOW YOUR COLLEAGUE HAS
STATED YOU KNOW HOW LONG IT
TAKES. COULD TAKE AND I WANT TO
MAKE SURE THAT WE HAVE ACCURATE
INFORMATION TO ALSO MAKE SURE
THAT ARE BECAUSE- IN ALL OF HIS
UP. SIDE AND AS IT PERTAINS TO
HOW FAST RATE BY MEANS ARE CAN
YOU SHARE A LITTLE BIT. OF THAT
INFORMATION. ABSOLUTELY ARM
THANKS AGAIN FOR THE QUESTION
ACCORDING TO A RATE REGULATION
BRANCH STAFF. A DEPARTMENT RATE
FILING APPROVAL TIMES FOR NON
INTERVENED FINALLY FILENE'S.
AVERAGE JUST OVER SIX MONTHS IF
YOU LOOK FOR BETWEEN TWENTY
FIFTEEN AND TWENTY TWENTY TWO. I
GREW SLIGHTLY DUE TO THE PAIN
DURING THE PANDEMIC DUE TO
SEVERAL FACTORS. HOME FOR
INTERVENING FILINGS BETWEEN
TWENTY SEVENTEEN TO TWENTY
TWENTY THE AVERAGE WAS JUST
UNDER A YEAR. I DO WANT TO PUT
THE CARRY OUT THAT THESE ARE
AVERAGES AND SO WHEN YOU HAVE
ONLY A SMALL NUMBER OF FILINGS
IN CERTAIN YEARS- YOU KNOW ONE
CAN PULL THE AVERAGE. MORE THAN.
MORE THAN IF YOU HAD LOTS OF
FILES IN A GIVEN YEAR. THANK
YOU- AND THAT WAS IMPORTANT TO
KNOW BECAUSE I KNOW THAT- YOUR
AYE SAID BASED ON WHAT I HEARD
LAST TIME THEY WHAT IT COULD
TAKE UP TO TWO YEARS. SO I
IMAGINE THOSE SEARCHES RARE
CASES WHEN THEY CALL TWO THREE
YEARS BUT THE AVERAGE AS YOU
STATED WITH. A IT'S UNDER. SIX
MONTHS FOR JUST NON OUT. IN A-
AND UNDER A YEAR SO IT'S- A
YEAR. MOST RATE FOR. CA FOR THE
YEAH IT THAT'S- FOR THE TIME
PERIODS I STATES ARE. SEVENTY TO
TWENTY TWO- THREE. THE SEVEN
DAYS THE AVERAGE FOR AN INTER IN
FILING. AN ANSWER SIX MONTHS FOR
THE NON INTERVENED FILES THANK
YOU ANOTHER ISSUE I WANT TO
DISCUSS I KNOW THAT OTHER
INTEREST COMMISSIONER HAS BEEN
GOING AROUND THE STATE. JUST
HAVING A LOT OF TOWN HALLS
LISTENING TO CONSUMERS AND-
BECAUSE I'M REALLY INTERESTED IN
WHAT HAPPENS ON THE GROUND LEVEL
AGAIN I. WANNA MAKE SURE THAT WE
DON'T GET LOST IN THE WOODS WE
TEAR ABOUT THAT YOU KNOW THE
SCIENCE OF WHAT WE'RE DISCUSSING
HERE. CAN YOU SHARE A LITTLE BIT
OF WHAT YOU'RE EXPERIENCING OR
HE'S RATHER EXPERIENCING AS HE
GOES OUT AND- TO THESE
COMMUNITIES WERE. AT THE TOP
THREE ISSUES THAT- I HE FINDS
OUT IN THE COMMUNITIES I KNOW HE
VISITED SEVERAL IMPACTED
COMMUNITIES I JUST WANNA KNOW.
WHAT ARE PEOPLE DEALING WITH
RIGHT NOW. AB TWO. SO IT ON. YOU
KNOW I TO THE NEW. ONE ISSUE
THAT WE'RE LOOKING AT AS WE GO
OUT TO COMMUNITIES IS HOW TO
BEST COMMUNICATE. AT REGARD- THE
NEW WILD HER REGULATIONS THAT
WERE FINALIZED IN OCTOBER. I'M
PROVIDE SAID SAFE FROM WILDFIRES
FRAMEWORK THAT SORT OF A CLEAR
COMMUNICATION TOOL. TO HELP
INFORM COMMUNITIES ON WHAT OF
ALL THE THINGS THAT YOU CAN DO
WHAT ARE THE- ACTIONS THAT. ARE
IN THAT FRAMEWORK. AND NOT ONLY
ARE THE CONSENSUS AMONG STATE
AGENCIES. BUT THAT ARE ALSO
WRITTEN THE REGULATIONS FOR
INSURANCE AND SO YOU CAN EXPECT.
AN INCENTIVE IN YOUR INSURANCE
FOR TAKING THOSE ACTIONS. I'M AS
YOU CAN IMAGINE. THE WILDFIRE
ISSUE IS OVERWHELMING FOR MANY
PEOPLE IN TERMS OF WHAT TO DO
AND SO THIS CLARIFIES AND
FOCUSES. HERE WHERE WE CAN PUT
OUR TIME DIFFERENCE PRODUCTION.
ARM AND- AND HOW BEST TO GET
THERE. SO THAT EVERY CONTINUES-
THE OTHER THING IS THAT WE DO
STILL CONTINUE TO COLLECT DATA
AND ANALYZE INFORMATION. ON NON
RENEWALS IN THE STATE- THAT IS
STILL AN ISSUE THAT IS VERY REAL
AND IN MANY COMMUNITIES
ESPECIALLY AND- OTHER WILD IN
URBAN INTERFACE- IT'S SOMETHING
THAT WE CONTINUE TO MONITOR
CLOSELY AND TALK TO COMMITTEES
ABOUT WHEN COMMISSIONER LARA IS
OUT. AT TOWN HALLS AND OTHER
EVENTS. WE REALLY AT THE FOCUS
POINT IS BEING WILD FIRE SAFETY
AS THE CLEAREST PATH. TO BETTER
INSURANCE AVAILABILITY
AFFORDABILITY. THANK YOU- I
WANTED JUST I KNOW THAT
COMMISSIONER RECORD A LOT AND I.
SHARE SIMILAR. OF AREAS I WOULD
SAY IN TERMS OF DEMOGRAPHICS AND
I NAILED DOWN- FOR EXAMPLE-
PEERS BACK ABOUT TWELVE MILLION
DOLLARS UP TO IT YOU KNOW WE
HAVE THE BOBCAT FIRE AND THERE
IS. OF FUNDING FOR GRANTS AND
INCENTIVES AND SOMETIMES OUR
SPANISH SPEAKING COMMUNITY
DOESN'T. NECESSARILY KNOW HOW TO
GO ABOUT DOING THIS CAN YOU
SHARE WHAT YOU ARE DOING IN
TERMS OF JAZZ. ABI MINDFUL OF
THE DIFFERENT LANGUAGES AND
GETTING INFORMATION OUT TO IT TO
FOLKS- HOW DO YOU TACKLE THOSE
THAT. DON'T SPEAK ENGLISH TO
SHARE A LITTLE BIT. OF THAT
PLEASE THANK YOU THANK YOU KNOW
IT'S A IT'S A CRITICAL ISSUE THE
WE HAVE A COMMUNITY RELATIONS
AND OUTREACH BRANCH THAT. IS
RELATIVELY NEW FOR THE
DEPARTMENT AND IS ENERGETIC AND
IT'S HUNDREDS OF EVENTS A YEAR
AND THEY REALLY WORK HARD. TO
IDENTIFY WHAT COMMUNITIES ARE
ABLE TO REACH EACH LANE. ARE
NEEDED. WHEN INFORMATION IS MOST
RELEVANT. AND SO THAT HAS BEEN
ONGOING AND I TO EXPANDING
EFFORT ON FOR THE STATE AND ON
THIS WELFARE ISSUE IT'S REALLY
IMPORTANT BECAUSE WE- HAVE
THESE. RISK REDUCTION ACTIONS
THAT WE WANT PEOPLE TO KNOW
ABOUT AND BE ABLE TO TAKE AND BE
ABLE TO FIND RESOURCES AND SO.
ON ARC OUR COMMUNITY RELATIONS
AND OUTREACH BRANCH- DOES HE
REALLY- AND SEE INCREDIBLE AND
GROWING- JOB AT TRYING TO DO
THAT MOST EFFECTIVELY THROUGHOUT
THE STATE. ALL RIGHTY THANK YOU
SO MUCH AT ONCE AGAIN I HOPE TO
INVITE YOU BACK THERE'S A LOT OF
INFORMATION TO GO DEEPER ON AND
I APPRECIATE THE ENTRANCE
COMMISSIONER. HAVING
REPRESENTATION HERE THANK YOU SO
MUCH THANK YOU VERY MUCH- SO
NOW- AGAIN WE'RE RUNNING A
LITTLE BIT OF TIME SOMEONE TRY
EXPEDITE THIS WE ARE FOURTH THAT
PRESENTERS. BOB WE HAVE A NANCY
WATKINS THANK YOU FOR YOUR
PATIENCE- SITTING HERE THROUGH
THIS OUT SHE IS. THE PRINCIPAL.
AND CONSULTING ACTUARY AT.
MILLIMAN CLIMATE RESILIENCE
INITIATIVE CELL. I KNOW MR WERE
MENTIONED SOME OF THE GOOD WORK
DOING SO. WHEN YOU'RE READY YOU
MAY BE CAN WE HAVE FIFTEEN
MINUTES BUT IF WE CAN.
STREAMLINE THAT I WOULD GREATLY
APPRECIATE IT THANK YOU.
THANK YOU SENATOR RUBIO AND
COMMITTEE MEMBERS FOR HAVING ME
TODAY- AS- AS YOU MENTIONED I'M
AN ACTUARY AND A PRINCIPAL WITH
MILLMAN I MANAGE OUR PRACTICE IN
SAN FRANCISCO. WE CONSULT FOR
MANY OF THE LARGEST CALIFORNIA
INSURERS AND INDUSTRY TRADE
GROUPS WE ALSO CONSULT FOR THE
TOWN OF PARADISE WESTERN FIRE
CHIEFS ASSOCIATION THE NATIONAL
RESOURCES DEFENSE COUNCIL
NATIONAL ASSOCIATION OF REALTORS
ON INSURANCE DEPARTMENTS IN
HAWAII ALABAMA AND CONNECTICUT.
AND OF FEMA FOR THE NATIONAL
FLOOD INSURANCE PROGRAM SO WE'RE
KIND OF IN THE MIDDLE OF-
CATASTROPHIC RISK AND INSURANCE
MARKETS AS A VOLUNTEER I- HELP
TO CLOSE THE FLOOD PROTECTION
GAP IN THE COUNTRY- I ASSIST THE
ANY I SEE ON CATASTROPHIC
ISSUES. AND I SERVE ON THE CAL
FIRE RISK MODELING ADVISORY
WORKGROUP. I ALSO LIVE IN A
RENAULT WHICH IS A VERY HIGH
FIRE RISK SOON AND I WAS DROPPED
BY OUR CARRIER WHEN THEY LEFT
THE CALIFORNIA- HOMEOWNER'S
INSURANCE MARKETS SO I'M
SPEAKING TODAY- NOT ONLY IS A
RISK AN INSURANCE EXPERT BUT
ALSO SOMEONE WHO WANTS A
SUSTAINABLE FUTURE. FOR OUR
FAMILY AND OUR FELLOW
CALIFORNIANS. TODAY I'M GONNA
SHARE SOME THOUGHTS ABOUT HOW
THE RISING CLIMATE RISK IS
INTERACTING WITH OTHER RISKS TO
THREATEN THE SUSTAINABILITY OF
THE CALIFORNIA MARKET. WHEN A
FOCUS MOSTLY ON WILDFIRE
ALTHOUGH THERE'S A COUPLE TIMES
I'M GONNA TALK ABOUT FLOOD AS
WELL- AND I WILL END WITH GOOD
NEWS. PROMISE SO STARTING WHAT
MAKES A SUSTAINABLE INSURANCE
MARKET IT RESTS ON THREE PILLARS
AVAILABILITY OF PRIVATE
INSURANCE IS PREDICATED ON BEING
ABLE TO MANAGE MEASURE. AND
CHARGE ENOUGH TO TAKE ON THE
RISK AFFORDABILITY SEE IT
SIGNIFIES THAT HOMEOWNERS ARE
WILLING AND ABLE TO PAY THE
PREMIUMS CHARGED IN ORDER TO
TRANSFER THE RISK. AND
RELIABILITY SIGNIFIES THAT THE
INSURERS IN THE MARKET ARE
CONFIDENT AND ABLE TO REMAIN
SOLVENT AND PAY CLAIMS
ASSOCIATED WITH THE RISK THAT
THEY'VE TAKEN ON. GIVEN THE
ENVIRONMENT THEY'RE OPERATING IN
. FOR CALIFORNIA PROPERTY
INSURERS CLIMATE CHANGE'S
INTERACTING IN NEW WAYS. AND
CAUSING CRACKS IN ALL THREE OF
THOSE PILLARS WHICH COULD
PRESENT COMPLEX AND DIFFICULT
CHALLENGES. FIRST. OUR INSURANCE
IS INCREASINGLY UNAVAILABLE
WHICH WE'VE ALL BEEN TALKING
ABOUT TODAY WHY IS THAT A COUPLE
OF REASONS FIRST WILDFIRES X.
SPECIALLY DIFFERENT DIFFICULT TO
MODEL FOR MANY REASONS INCLUDING
IT'S OFTEN HUMAN CAUSED IT CAN
SPREAD FAR AWAY FROM WHERE IT
ORIGINATES. ON HOW FAST IT
SPREADS DEPENDS IN PART ON CHEAP
CONDITIONS THAT CHANGE LIKE
VEGETATION DROUGHT WIND. AND THE
INTERACTION OF THE RISK
FRAMEWORK BETWEEN WHAT WE DO AND
WHAT OUR NEIGHBORS AND OUR
COMMUNITY DO. AND WHAT OUR FIRE
PROTECTION CAPABILITIES HALF AS
WE'VE ALL TALKED ABOUT TODAY THE
WILDFIRE RISK IN CALIFORNIA IS
CLEARLY INCREASING DUE TO
CLIMATE CHANGE. AND IT'S BEEN
EXACERBATED BY YEARS OF FIRE
SUPPRESSION LEADING TO BUILD UP
OF VEGETATION. AS WELL AS
EXPANDED REAL ESTATE DEVELOPMENT
IN THE WILD AND URBAN INTERFACE.
ADDITIONALLY CALIFORNIA
REGULATION REQUIRES INSURERS TO
REPLACE ALL HISTORICAL
CATASTROPHE LOSSES WITH A LONG
TERM AVERAGE OF INSURED LOSSES
WHERE'S ACTUARIES CONSIDER
CATASTROPHE MODELS TO BE THE
BEST AVAILABLE SCIENCE FOR THIS
PURPOSE. COMPANIES CAN'T PASS
ALONG THE COST OF REINSURANCE
THROUGH THEIR POLICY HOLDER
PREMIUMS AND THE RESULT
RESULTING RATES ARE OFTEN NOT
ACTUALLY SOUNDED DON'T REFLECT
THE TRUE COST OF RISK TRANSFER.
THIS CREATES A GAP BETWEEN WHAT
INSURERS THINK THAT THE COST IS
AND WHAT THEY'RE ACTUALLY ABLE
TO CHARGE. IT'S IMPORTANT TO
UNDERSTAND HOW OUT OF STEP
CALIFORNIA REGULATION IS WITH
THE REST OF THE COUNTRY AND EVEN
WITH OTHER WITH WITH NON
HOMEOWNERS ON BUSINESS IN OUR
STATE. THERE'S ONLY TWO OTHER
STATES THAT HISTORICALLY HAVE
DISALLOWED CAT MODELS FOR
HOMEOWNERS RATEMAKING. AND BOTH
ARE MOVING TOWARDS LOWERING THE
BARRIERS TO MODEL ACCEPTANCE
BECAUSE THEY UNDERSTAND HOW
IMPORTANT COUNT MODELS ARE TO
ADDRESSING HIGH RISK UNDERSERVED
MARKETS. NONE OF THE OTHER
STATES THAT I KNOW OF REQUIRE A
BACKWARDS LOOKING EXPERIENCE
FORMULA NONE THAT I KNOW OF
PROHIBITS THE COST OF
REINSURANCE NOW THESE STATES DO
REGULATE INSURANCE PRICING THEY
JUST DON'T REGULATED THE WAY
CALIFORNIA US. HOME IN ADDITION
FOR CALIFORNIA EARTHQUAKE
CATASTROPHE MODELS AND
REINSURANCE LOADS HAVE BEEN
INCORPORATED INTO RATE MAKING
FOR MANY MANY YEARS WITHOUT AS
FAR AS I CAN TELL ANY- ISSUES
FACED BY CONSUMERS. FLOOD I'M
JUST GONNA SAY IS A DIFFERENT
DIFFERENT ISSUE THAN WILDFIRE
HOMEOWNERS INSURANCE DOESN'T
TYPICALLY COVER FLOOD AND
THERE'S VERY FEW CURRENT PRIVATE
OPTIONS IN CALIFORNIA. WE
ESTIMATE THAT LESS THAN 2% OF
CALIFORNIA HOMES HAVE FLOOD
INSURANCE TODAY MOSTLY THROUGH
THE NATIONAL FLOOD INSURANCE
PROGRAM. SORE CURRENT FLOOD RISK
IS BORNE MOSTLY BY INDIVIDUALS
IN FLOOD PRONE AREAS AND THE
FINANCIAL INSTITUTIONS WHO HOLD
THE MORTGAGE RISK. IN CALIFORNIA
AND MUCH OF THE WEST THE EPIC
SNOW FROM ATMOSPHERES REYES
RIVERS IS STARTING TO MELT AND
THE FLOOD DANGERS RISING. SO
WHEN RISK IS INCREASING AND
RATES ARE TOO FAR BEHIND
INSURERS HAVE FEW CHOICES OTHER
THAN TO REDUCE EXPOSURES IN HIGH
RISK AREAS WHICH LEADS TO.
UNAVAILABILITY THE FACT THAT
THERE'S FEWER OUR COMPETITORS IN
THE MARKET PRODUCES FEWER
OPPORTUNITIES FOR PRICING
COVERAGE VARIATION WHICH HURTS
AFFORDABILITY- FOR POLICIES WHO
ARE IN HIGH RISK RISK AREAS. YOU
WILL HAVE RATE INCREASES- THAT
MIGHT. PROMOTE MORE AVAILABILITY
BUT THAT WILL MAKE THE POLICIES
LESS AFFORDABLE FOR THOSE PEOPLE
AND THAT MIGHT LEAD TO MORE
HOMES THAT PEOPLE CAN AFFORD TO
ENSURE. THERE'S ALSO ALSO OFTEN
COVERAGE RESTRICTIONS ESPECIALLY
FOR POLICIES GOING TO THE FAIR
PLAN. SO WE ALSO HAVE A
POTENTIALLY UNRELIABLE MARKET
RIGHT NOW INSURERS ARE
CHALLENGED IN MULTIPLE WAYS. TO
ENSURE THEIR SOLVENCY AND
STABILITY FIRST COMPANIES NEED
REINSURANCE PROTECTION TO PREPAY
THEIR CLAIMS AFTER CATASTROPHIC
EVENTS. BUT REINSURERS ARE
RAISING PRICES LIMITING COVERAGE
AND EVEN EXITING SOME MARKETS TO
IMPROVE RETURNS. THIS IS REALLY
A PROBLEM IN CALIFORNIA AS WELL
AS OTHER STATES LIKE FLORIDA AND
LOUISIANA WHERE COMPANIES HAVE
LOST OF REINSURANCE COMPANIES
HAVE LOST A LOT OF MONEY AND
INVESTORS ARE PULLING OUT.
SECOND AND THIS IS SOMETHING WE
HAVEN'T REALLY FOCUSED ON TODAY
THE GROWTH OF THE FAIR PLAN IS A
THREAT TO THE PRIVATE INSURANCE
MARKET THAT REMAINS EVEN IF THEY
GET OUT OF HIGH RISK AREAS. THE
THERE ARE UNLIMITED ASSESSMENTS
TO ADMITTED INSURERS WHO REMAIN
IN THE MARKET THEY BEAR THE
ULTIMATE RISK OF THE FAIR PLAN
SURPLUS IF THE FAIR PLAN SURPLUS
AND REINSURANCE ARE INSUFFICIENT
TO PLAY PAY CLAIMS. SO WHAT YOU
HAVE IS A PROBLEM LIKE IF YOU'RE
IF YOU'RE IN A BAR WITH YOUR
BUDDIES AND EVERYBODY'S DRINKING
AND THEN YOUR YOUR YOUR FRIENDS
JUST THROW SOME MONEY DOWN AND
LEAVE THE BAR. AND YOU STAY
NEWSDAY NEWSDAY WHATEVER THE TAB
IS AT THE END OF THE NIGHT
THAT'S WHAT YOU'RE GOING TO BE
PAYING ON IT THERE IS AN
INCENTIVE FOR OF IF THE FAIR
PLAN GETS TOO BIG FOR COMPANIES
TO GET OUT. IT'S NOT THAT
DISSIMILAR FROM WHAT HAPPENED
WITH SILICON VALLEY BANK I'M NOT
SAYING THAT WILL HAPPEN I'M
SAYING IT HAS HAPPENED IN OTHER
PLACES. LIKE NORTH CAROLINA IN
TWO THOUSAND EIGHT WHEN THEY'RE
BEACH PLAN GOT TOO BIG- WE
ESTIMATED AT THE TIME. THAT THEY
COULD HAVE BEEN UNFUNDED DEFICIT
OF UP TO SIX POINT TWO BILLION.
WHERE'S THE TOTAL ANNUAL PREMIUM
OF ALL PERSONAL AND COMMERCIAL
PROPERTY INSURANCE IN THE STATE
WAS THREE BILLION DOLLARS. SO
COMPANIES STARTED PULLING OUT OF
NORTH CAROLINA UNTIL THE SENATE.
PASSED OF. A LAW THAT THAT
ALLOWED SOME KIND OF RECRUITMENT
OF ASSESSMENTS WE JUST DON'T
WANT TO GET TO THAT POINT AND
CAL. ONE YOU. LASTLY THE
CALIFORNIA RATE FILING AND
REGULATORY SYSTEM IS NOT
PERCEIVED AS STABLE. BECAUSE
THERE'S JUST A HIGHLY
UNPREDICTABLE RATE FILING
PROCESS WITH RESPECT TO THE COST
THE TIMING AND THE OUTCOME. SO
I'D LIKE TO TALK A LITTLE BIT
ABOUT HOW THE PROBLEM IF THEY
WERE REGULATION HAS PLAYED OUT-
OVERTIME. BOMB WE WE'VE HEARD
ABOUT THE SOME THE SLIDE THAT I
DID A FEW YEARS AGO WHERE I CAN-
WE CALCULATED THAT BETWEEN
NINETEEN NINETY ONE IN TWENTY
SIXTEEN THE INDUSTRY HAS. MADE
AN AGGREGATE PROFIT OF ABOUT TEN
BILLION DOLLARS WELL IF YOU WERE
HERE AROUND- AROUND THAT TIME OF
TWENTY FIFTEEN TWENTY SIXTEEN.
WE WERE COMING OFF FIVE YEARS
INTO THE LONGEST DROUGHT THE
STATE HAS EVER HAD. AND I WAS ON
A RATE HEARING FOR A LARGE
CALIFORNIA ENSURE THAT WAS
SEEKING A SMALL RATE INCREASE.
AND ONE OF THEIR REASONS WAS
BECAUSE OF RISING WILDFIRE RISK-
THROUGH THE INTERVENORS SAYS-
CONSUMER INTERVENERS IN THE CDI
WERE ARGUING THAT THE WILDFIRE
RISK WAS DECREASING AND THEY
WERE USING THAT BACKWARDS
LOOKING FORMULA TO JUSTIFY IT.
SO THIS WAS TWENTY FIFTEEN AND
TWENTY SIXTEEN AND I THINK WE
KNOW WHAT HAPPENED RIGHT AFTER
THAT. THEY WEREN'T LOOKING AT
THE DROUGHT THEY WEREN'T LOOKING
AT THE SPENT EXPANSION OF
POLICIES INTO THE WE- WE DID SEE
THESE THESE HIGH LOSSES IN THE
NEXT COUPLE OF YEARS. AND AFTER
THAT THE FORMULA THAT WERE
ALLOWED TO USE IN CALIFORNIA
REFLECTED THOSE NEXT TWO YEARS
OF LOSSES- WE DID AN ANALYSIS OF
THE- THREE OF THE TOP TEN
INSURERS. AND WE SAW THEIR
WILDFIRE ALLOWED CAT LOAD
INCREASE BY FOUR HUNDRED
PERCENT. THAT IS WHY WE HAD AN
AFFORDABILITY CRISIS BECAUSE
RATHER THAN ALLOWING THE
PREMIUMS TO GO UP AS THE
EXPOSURES WENT UP OVER TIME WE
HAD THIS HUGE RECOGNITION OF THE
RISK THAT HAPPENED AFTER THE
LOSSES. SO WHAT I WANT TO TELL
YOU IS MATHEMATICALLY THAT
FORMULA DISINCENTIVE VISES
TAKING ON MORE RISK ONCE A
COMPANY HAS A CERTAIN RISK
PROFILE. THEY THEY LOSE IF THEY
TRY TO WRITE RISKIER POLICIES
UNDER A BACKWARDS LOOKING
FORMULA. THEY GET RATE REALLY IF
THEY DRAW BUT THE HIGH RISK
POLICIES SO THIS IS ONE OF THE
REASONS THAT. WE'VE GOTTEN
AFFORDABILITY AND AVAILABILITY
CRISIS. THE CALIFORNIA MARKET IS
PRECARIOUS AND I THINK THAT
THEIR SEPARATE SEVERAL
PRECIPITATING FACTORS THAT COULD
MOVE US INTO A MORE SEVERE STAGE
OF CRISIS. FIRST WE COULD HAVE
REINSURANCE RENEWALS SO ADVERSE
THE CALIFORNIA TEACHERS CAN'T
OBTAIN COVERAGE OR THEY CAN'T
AFFORD TO CONTINUE WRITING HERE.
SECOND WE COULD HAVE MAJOR
WILDFIRE EVENTS THAT HER COMPANY
PROVINCE PROFITABILITY SOLVENCY.
OR PERCEPTION OF RISK THIRD WE
COULD HAVE FEAR PLAN EXPOSURES
BECOMING SO HIGH THAT COMPANIES
FEEL LIKE THEY HAVE TO LEAVE THE
ADMITTED MARKET IN ORDER TO NOT
BE STUCK WITH THE BILL- LAST CD
I COULD BE. A IF THEY WERE GIVEN
ENOUGH PRESSURE TO NEGOTIATE
MORE GENEROUS MITIGATION CREDITS
THAT INDICATED- THE OR OR HOLD
UP FILINGS FOR RATE INCREASES
FOR PROPERTY INSURERS- OR IF THE
COMPANIES HAVE POOR EXPERIENCE
IN OTHER RELATED LINES LIKE
AUTO. CALIFORNIA COULD BECOME
LESS DESIRABLE THAN IT IS RIGHT
NOW. SO WHY HAVEN'T OUR
GOVERNMENT POLICIES WORKS TO
STOOD TO ADDRESS THIS PROBLEM
FIRST THE ACTIONS THAT ARE
INTENDED TO HELP CONSUMERS CAN
ACTUALLY BACKFIRE ON
INTENTIONALLY AND ACCELERATE THE
COLLAPSE OF THE INSURANCE
MARKET. THIS GENERALLY HAPPENS
BECAUSE THE ACTIONS ARE
TYPICALLY ADDRESSED AT
AVAILABILITY AND AFFORDABILITY
BUT THEY DON'T CONSIDER SOLVENCY
THIS ALMOST ALWAYS RESTS ON
DOWNPLAYING THE RISKS. THE
POLICY ACTIONS CAN IGNORE THE
REALITY THAT THE RISKS
ASSOCIATED WITH WILDFIRE AND
CLIMATE CHANGE THEY'RE OWNED BY
HOMEOWNERS IN THE COMMUNITY
THEY'RE NOT OWNED BY THE
INSURANCE INDUSTRY. THEY DON'T
RECOGNIZE THAT ARE BROKEN
INSURANCE MARKET IS NOT THE
PROBLEM IT'S A SYMPTOM OF A
LARGER PROBLEM WHICH IS TOO MUCH
RISK FOR THE MARKET TO BEAR. IN
CALIFORNIA WE'VE SEEN THAT A
LACK OF UNDERSTANDING A WILDFIRE
RISK HAS ENCOURAGE PRACTICES
THAT INCREASES WHICH NOT ONLY
CREATED A HOMEOWNERS INSURANCE
CRISIS IT ALSO PUT MORE FAMILIES
IN HARM'S WAY AND DROVE UP THE
COST OF THE STATE OF REJECTING
ITS CITIZENS. TO RESTORE HEALTH
TO THE CALIFORNIANS CURRENTS
MARKET THE PRICE TO TRANSFER
RISK MUST REFLECT THE COST TO
TRANSFER RISK. END TO IMPROVE
AFFORDABILITY WE MUST DRIVE DOWN
THE RISK SO. PROP ONE OF THREE
IS NOT THE ONLY PROBLEM HERE- AS
AS OUR PRIOR SPEAKERS OF SAID WE
DO HAVE TO RESOLVE THE
AFFORDABILITY ISSUE. SO WHAT WE
NEED FOR THAT IS FORWARD LOOKING
REGULATION AND LEGISLATION THAT
CONSIDERS THE UNIQUE NATURE OF
CLIMATE RISK WE CAN'T REST ON
FORMULAS. WE MUST BE FLEXIBLE
BECAUSE WE DON'T KNOW EXACTLY
WHAT'S AHEAD OF US WE MUST TRY
TO BETTER UNDERSTAND AND
COMMUNICATE RISK AND WORK
COLLECTIVELY TO BEND DOWN THE
RISK CURVE. WE NEED BETTER DATA
MODELING SCIENCE HIGHER
PRIORITIZATION OF MITIGATION
VERSUS DISASTER DISASTER
RESPONSE AND RESOURCE ASSISTANCE
TO THE AREAS MOST IN NEED. THE
GOVERNMENT IS GOING TO NEED TO
WORK WITH A RANGE OF EXPERTS AND
STAKEHOLDERS TO UNDERSTAND
WHAT'S THE BEST THE BEST PATH
AHEAD. WE NEED TO WORK TOGETHER
TO COMMUNICATE THE TRUE COST OF
WILDFIRE RISK AND IT ENCOURAGE
PRACTICES THAT REDUCE THE RISK.
SO I PROMISED YOU SOME GOOD NEWS
. THE GOOD NEWS IS- WE CAN BUILD
SAFELY. AND WE CAN REDUCE THE
RISK NOT ONLY IN THE BUILT
ENVIRONMENT BUT ALSO IN THE
WILDLAND URBAN INTERFACE. SO
WE'VE BEEN WORKING ON FOR THE
PAST YEAR ON A VOLUNTEER EFFORT
WITH A FIRE CHIEFS CAL FIRE
CATASTROPHE MODELERS INSURERS-
THE IDEA CHEST SCIENTISTS AND
CDI. TO BETTER UNDERSTAND THE
IMPACTS OF DEFENSIBLE SPACE HOME
HARDENING DEFENSIVE ACTION AND
THE LOCATION ON WILDFIRE RISK.
AND WE'RE ALSO TRYING TO
IDENTIFY GAPS IN THE CURRENT AND
DATA AND SCIENCE WE'RE TRYING TO
FIGURE OUT HOW TO COMMUNICATE
COMMUNITY RISK AND TAKE. HOME A
UNIFIED MESSAGE AND MAKE IT
EASIER FOR COMMUNITIES TO KNOW
WHAT TO DO WE HAVE A VISION AND
WE HAVE A PLAN. THE INSURERS
HAVE BEEN GENERALLY SUPPORTIVE
ALTHOUGH WE'RE IN EARLY STAGES
RESEARCH AND WE'RE HAPPY TO
SHARE MORE WITH THE COMMITTEE.
ENCLOSING CALIFORNIA LEADS THE
NATION IN TECHNOLOGY SCIENCE
INNOVATION PROGRESSIVE VALUES
AND COLLECTIVE ACTION LET'S USE
THE STRENGTH TO FACE THE
WILDFIRE PROBLEM AND WORK
TOGETHER TO CREATE A VISION AND
ADDRESS IT. I'D BE HAPPY TO
ANSWER QUESTIONS AND CONTRIBUTE
THE SKILLS AND EXPERTISE THAT MY
STAFF AND I HAVE TO SUPPORT YOUR
EFFORTS THANK YOU. THANK YOU
VERY MUCH- IT'S A LOT OF- GOOD
INFORMATION THERE- I GO BACK TO
I THINK MISSOURI WILL ALSO
MENTIONED- I'M TRYING TO SAY I'M
SO SORRY I JUST SAW THAT YOU
CAME BACK SIR WOULD YOU LIKE TO
HAVE ANY COMMENTS QUESTIONS.
OKAY YOU KNOW I THINK WHAT I
KEEP SEEN OUR HERE MR ALSO
MENTION IS A- THE FLOOR LOOKING
VERSUS FACTORED LOOKING AND I
THINK THAT'S A- IT'S A BIG ISSUE
AND BOB CAN YOU EXPAND A LITTLE
I THINK I HEARD YOU SAY THAT
THERE'S TWO. OTHER STATES FROM
ONLY TWO OTHER STATES THAT DON'T
ALLOW THEIR INSURANCE THAT I
HAVE THAT WRONG ARM. I SAID TO
OTHER STATES THAT HISTORICALLY
DID NOT ALLOW COUNT MODELS THAT
WAS GEORGIA NEW YORK. AND FOR
HER- COMPANIES WERE. NOT ALLOWED
TO MENTION THAT THEY USE TO
CATASTROPHE MODEL IN THEIR RATE
FILINGS BUT THAT'S CHANGED IN
RECENT YEARS- BASICALLY THEY-
THEY THEY WANT TO FLOOD
INSURANCE. AND THAT AND THERE
WAS NO WAY TO GET FLOOD
INSURANCE IN THE MARKET WITHOUT
CATASTROPHE MODELS. AND THEY
REALIZED I THINK THEY WERE
CHANGES IN REGIMES SO- THEY'VE
STARTED ALLOWING CATASTROPHE
MODELS EXPLICITLY. IN RATE
FILINGS BUT ONLY RECENTLY. THANK
YOU I AGAIN I THINK I HEARD
MISSOURI MENTIONING I DON'T WANT
TO PUT WORDS IN HIS MOUTH BUT I
FIVE REMEMBER HE SAID YOU KNOW
IT WAS- PART OF THE SOLUTION
SHOULD BE TO FOR ABOUT A MINUTE
THAT THAT'S YOU KNOW PUBLICLY
ACCEPTABLE TO. EVERYONE BUT WE
NEED TO FIGURE OUT HOW TO BE
MORE FORWARD LOOKING IN TERMS OF
WHAT'S HAPPENING BUT- AGAIN I'M
SORRY WE'RE RUNNING UP AGAINST
THE CLOCK AND WE HAVE TO. MAKE
SURE THAT WE LEAVE THIS UP FOR
THE NEXT COMMITTEE HERE IN CELL
I WANT TO THANK YOU
UNFORTUNATELY ALL OVER COMMITTEE
MEMBERS HAVE DIFFERENT-
COMMITTEES GOING ON RIGHT NOW SO
I WILL RESERVE. MY QUESTIONS FOR
ANOTHER TIME ON BECAUSE WE HAVE
SOME GENTLEMAN HERE AND- THAT
HAVE BEEN HERE FOR A LITTLE
WHILE BUT- THANK YOU SO VERY
MUCH AND THANK YOU FOR THE
INFORMATION. AND I WILL. LOOK
FORWARD TO HAVING YOU ONCE AGAIN
THANK THE ANYA. ON THE NEXT ONE-
IS GOING TO BE A LITTLE BIT OF A
FAST ROUND HERE- WE KNOW WE DO
HAVE FIFTEEN MINUTES BUT WE ARE
GOING TO BE SHARING. ALL THOSE
FIFTEEN MINUTES WITH SEVERAL
FOLKS- I WOULD LIKE TO INVITE A
DAN. DONE MORE TO PRESIDENT AND
CEO OF THE CALIFORNIA BUILDERS
INDUSTRY ASSOCIATION- I DO HAVE
A TED GAINES PRESIDENT OF THE-
GAINES INSURANCE AGENCY IF HE'S
HERE WOULD LIKE TO INVITE YOU TO
COME UP- AND DAVID. CAPONIER
CORRECT M. MANAGING PARTNER.
VALERIE EMORY BUSCO INSURANCE
SERVICES SORRY FOR THAT MIKE
FALL PUBLIC POLICY ECONOMISTS
CALIFORNIA ASSOCIATION OF
REALTORS. AND I THINK WE HAVE
ANOTHER SEAT UP HERE. BILL EVANS
REALTOR AND BRANCH MANAGER
ALLIANZ REAL ESTATE. HE'S A
PLAYMAKER. NO HE'S APPEARING
VICE HIM THANK YOU FOR THAT. I
DAVE WINOKUR FIRE CHIEF MORAGA
ORINDA FIRE DISTRICT CALIFORNIA
FIRE CHIEFS ASSOCIATION IN THE
WAKE TASK FORCE. SO I THINK WE
HAVE ENOUGH SEATS FOR EVERYONE
SO JENNIFER AND I KNOW THAT WE
HAVE A LITTLE BIT OF- TIME
CONSTRAINTS HERE. AND WE HAVE
SOMEONE. THAT IS APPEARING VIA
CELL CORRECT. AND SO I'M GONNA
START AND I'LL BE VERY STRICT
WITH OUR TIMELINES HERE SO IF I
YOU DON'T MIND. UP PLEASE
INTRODUCE YOURSELF AS YOU'RE
DOING THIS AND I'M GONNA START
WITH A DAD. OF FIVE MINUTES YOU
MAY PROCEED THANK YOU. THANK YOU
. THANK YOU CHAIR JOHN CHART
RUBIO AND THANKS TO THE
COMMITTEE MEMBERS FOR HEARING US
OUT TODAY DAN DONE MORE YOU'RE A
PRESIDENCY OF THE CALIFORNIA
BUILDING INDUSTRY ASSOCIATION.
NINE OF THE TEN NEW HOMES ARE
BUILT IN CALIFORNIA WHETHER IT'S
FOR RENT OR FOR SALE OR BILL
PLAYER MEMBERS. THE BILL
STATEWIDE WE BUILD ALL TYPES OF
HOUSING FROM AFFORDABLE TO
LUXURY. BUT THE PRIMARY- TYPE
HOME WE BUILD FOR THE FIRST TIME
HOME BUYER- TODAY WERE JUST HERE
TO TALK ABOUT THE FACT THAT WE
DO HAVE AN INSURANCE CRISIS AND
HOW IT'S IMPACTING OUR
CONSUMERS. FOR THOSE WHO KNOW ME
FOR A LONG TIME YOU KNOW IT'S
KIND OF INTERESTING TO BE ON
THIS SIDE OF THE TABLE I'M NOT.
USED TO REPRESENT THE INSURANCE
INDUSTRY WILL TODAY I'M
REPRESENTING CONSUMERS. WHO ARE
AT THIS POINT- BEING A PAIN VERY
VERY HIGH PREMIUMS TO STAY IN
THEIR HOMES AND FRANKLY ARE
ABOUT TO LOSE THEIR HOMES
BECAUSE OF THE HIGH COST OF
INSURANCE. SO LET'S TALK QUICKLY
ABOUT CLIMATE- WE BUILD IN
CALIFORNIA NOW THE MOST FIRE
RESILIENT. FIRE HARDENED FIRE
SAFE HOMES IN THE WORLD. WE HAVE
SINCE TWO THOUSAND TEN AND THIS
IS KIND OF AN INTERESTING FACT
THAT IN OF THIS BUILDING I WOULD
MISS WALKING SAID IN SOME OF THE
DIFFERENT ISSUES- THAT WE CAN DO
TO MAKE. OUR COMMUNITY SAFER FOR
FIRE SINCE TWO THOUSAND TEN.
THERE'S NOT A MASTER PLANNED.
BUILT COMMUNITY FOR HOMES IN
CALIFORNIA THAT IS BURNED DOWN.
MANIFESTOS NOT A HOME. IT IS
BURNED DOWN IN A MASTER PLANNED.
FIRE RETARDANT TWO THOUSAND TEN
CODE BUILT COMMUNITY. SO THE
GOOD NEWS IS WE HAVE ACHIEVED A
MECHANISM WE PLAN A COMMUNITY
RIGHT AND BUILD IT RIGHT. ON THE
TOP CODES IN CALIFORNIA- WE CAN
CREATE MASTER PLANNED
COMMUNITIES THAT ARE FIRE
RESISTANT RETURN AND DON'T BURN
. THE GOOD NEWS ABOUT THAT TOO
IS WE CAN GET OUR PRICE POINT
THAT'S FAR CHEAPER THAN WE BUILD
URBAN INFILL. REBUILDERS AND
URBAN INFILL TO BUT IT'S
PRIMARILY FOR MILLIONAIRES. WHEN
YOU BUILD A REALLY NICE MULTI
STORY BUILDING. IN DOWNTOWN
PICKED THE CITY. IT COSTS FIVE
TIMES MORE THAN WHEN YOU BUILT
ON THE SUBURBAN COMMUNITIES.
IT'S JUST MATH- BUT IT'S REALITY
BUT SO A LOT OF PEOPLE SAY WHY
YOU KEEP BUILDING THOSE FIRE
PRONE AREAS. ONE WE CAN BUILD A
FIRE SAFE FIRE WISE. AND THEY
DON'T BURN IN A PRICE THAT
MIDDLE CLASS CALIFORNIANS CAN
AFFORD. SO HERE'S A CRISIS WE
HAVE THE COMMISSIONERS DOWN SOME
OF THE GOOD WORK. AND WORKING
WITH THE FAIR PLAN TO TRY TO
EXPAND SOME SHORT TERM COVERAGE
IS THE FAIR PLANS ONLY A VERY
SHORT TERM. SOLUTION TO THIS
PROBLEM THE PRIVATE MARKET HAS
TO SOLVE ITS ONLY MARKET BIG
ENOUGH TO SOLVING A FAIR PLANS
NOT BIG ENOUGH. HE DID EXPANDED
TO ALLOW FOR TWENTY MILLION.
DOLLARS PER LOCATION- FOR RISK
AND THE FOR PLANS WORKING ON
THAT NOW. WHICH IS A GOOD FIRST
STEP BUT UNFORTUNATELY ALL THE
PRODUCT THAT WE BUILDING
CALIFORNIA FOR CONDOMINIUMS. IS
IN EXCESS OF TWENTY MILLION
DOLLARS PER LOCATION SO IT
DOESN'T SOLVE OUR PROBLEM. AND
WHY THIS IS MOST PROFOUND FOR
CALIFORNIA IS CONDOMINIUMS IS
THE MOST AFFORDABLE HOUSING
PRODUCT WE BUILD IN CALIFORNIA.
IS PRIMARILY BOUGHT BY PEOPLE OF
COLOR LATINOS AND AFRICAN
AMERICANS. AND IT IS THE PRODUCT
THAT ALLOWS PEOPLE TO GET THE
AMERICAN DREAM AT THE BEST PRICE
POINT THAT WE HAVE AS A HOME
BUILDER. AND SO THE CHALLENGE WE
HAVE THE RIGHT NOW IS OUR CONDO
PROJECTS IN ALMOST ALL THE
STATES ARE NOW ON HOLD. BECAUSE
WE CAN'T GET INSURANCE. IF WE
BUILD A SINGLE FAMILY DETACHED
MULTI MILLION DOLLAR HOME. WE
CAN'T GET INSURANCE FOR THE FAIR
PLAN- UP TO THREE POINT FOUR
MILLION DOLLARS. BUT IF WE BUILD
A FOUR HUNDRED EIGHTY THOUSAND
DOLLAR CONDO IN NORTH ORANGE
COUNTY WHICH IS AMAZING- THAT
PRICE POINT ORANGE COUNTY. WE
CANNOT GET INSURANCE BECAUSE
IT'S CONSIDERED A COMMERCIAL
HABITATIONAL RISK. AND SO WE
CONTINUE TO WORK WITH
COMMISSIONER AND SEEING IF WE
CAN FOR A VERY SHORT TERM.
EXPAND THE FAIR. PLAN TO ADDRESS
THESE CONDOS. TO THINGS ON PROP
ONE OF- NO PROB. THREE DOES A
GOOD JOB IN PRICE CONTROLS. BUT
IT DOESN'T DO A GOOD JOB AND
RECOGNIZING MARKET REALITIES. SO
I'M IN THIS UNTENABLE POSITION
OF ADVOCATING THAT THE INSURANCE
COMMISSIONER AND MR ROSENFIELD
MANY INTERVENORS ALLOW THE
INSURANCE INDUSTRY TO GET RATE
INCREASES. I DON'T CARE IF
THEY'RE THIRTY OR FORTY PERCENT.
BECAUSE RIGHT NOW WE HAVE BEEN
OFFERED INSURANCE IN THE NOT A
BIGGER MARKET WHICH BY THE WAY
PROP ONE OF THREE DOES NOT
TOUCH. AND BY THE WAY YOU BUY
AND NOT A MINUTE COVERAGE
THERE'S NO BACKSTOP NO MACINNES
NO GUARANTEE FUND TO BAIL IT OUT
IF IT DOESN'T PAY. BUT OUR RATES
ARE GOING UP 40% IN THE NOT IN
THE MARKET YOU HAVE LESS THAN A
MINUTE THEY'RE GOING UP SIX
THOUSAND. NINE HUNDRED PERCENT.
THERE IS NO CONSUMER PROTECTION
IN THE SURPLUS LINES MARKET NOT
PICKING ON IT IT'S SET UP AS A
MARKET OF LAST RESORT. BUT IT IS
FAILING TO ADDRESS THE PRICE
POINT THE AFFORDABILITY ISSUE
THAT MS WATKINS TALKED ABOUT IS
OUT THE WINDOW. SO WE URGE THE
INSURANCE INDUSTRY TO SIT DOWN
WITH THE COMMISSIONER. TO WORK
TO SOLVE THIS PROBLEM TO COME UP
WITH IF IT'S A 40% INCREASE GIVE
IT TO HIM. LESSING ASSAYS WHEN
YOU BUY A CONDO. YOU PAY A
MORTGAGE YOU ALSO PAY WHAT'S
CALLED A HOMEOWNERS ASSOCIATION
DUES. THOSE DUES RIGHT NOW
AVERAGING ABOUT TWO HUNDRED
FIFTY THREE HUNDRED DOLLARS A
MONTH BECAUSE OF THIS HIGH COST
OF NOT ADMIT INSURANCE. IS GOING
UP TO AS HIGH AS FIFTEEN HUNDRED
DOLLARS A MONTH THE INSURANCE
AND HOMEOWNERS ASSOCIATION DUES
ARE IN EXCESS OF THE MORTGAGE.
AND WE NEED HELP TO HAVE THAT
FIXED SO WE LOOK FORWARD TO
WORKING WITH YOU. MADAM CHAIR OF
THE COMMITTEE MEMBERS TO BRING
THE INDUSTRY TOGETHER WORK WITH
THE COMMISSIONER AND THE
CONSUMER LEADERS. TO CREATE A
SOLUTION TO THIS RACE REYES
PROBLEM. SO WE CAN SELL CONDOS
AND SO PEOPLE CAN STAY IN THEIR
HOMES IF THEY BOUGHT A CONDO.
THANK YOU MADAM CHAIR. THANK YOU
AND I'M SORRY I FELL TED WHO-
SHARE WHY I FELT IT WAS
IMPORTANT FOR YOU TO BE HERE- AS
WE ARE NOW DEALING WITH ANOTHER
CRISIS WHICH IS THE HOUSING AND
HOMELESSNESS. ISSUE SINCE OUR
LAST COMMITTEE HEARING- WE
STARTED GETTING A LOT OF CALLS
FROM. FOLKS THAT HAVE HOAS. THAT
ARE HAVING A VERY DIFFICULT
TIME- GETTING INSURED I THINK
HAVE STATE. YOU KNOW SOMEWHERE
MADE TO HUNDREDS HOAS TO A TWO
REALLY EXPENSIVE HOAS AND- AND
AS WE'RE TRYING TO FIGURE OUT
THIS HOUSING CRISIS WE OUR GOAL
IS TO BUILD. MORE HOUSING NOT
LAST. AND IS JANET WAS SHARING-
THROUGH OTHER CONVERSATIONS
WE'VE HAD THAT THE IF. THEY HAVE
TO FOCUS ON SINGLE FAMILY HOMES
BECAUSE THEY CAN BE. INSURED
VERSUS. THE MORE AFFORDABLE
OPTION FOR OTHER FOLKS THAT
CAN'T AFFORD A SINGLE FAMILY
HOME IN. AND SOLD B. S.
INSURANCE ISSUE IS TRICKLING
DOWN TO OTHER ISSUES THAT WE'RE
DEALING HERE. WITH IN CALIFORNIA
AND IT'S IMPORTANT TO TAKE.
STOCK OF THAT ISSUE BECAUSE YOU
KNOW BUILDING HOMES THAT ARE
AFFORDABLE THAT CAN GET PEOPLE
INTO HOME OWNERSHIP. IS
IMPORTANT NOT ONLY TO ME BUT THE
ENTIRE STATE OF CALIFORNIA. SO
THAT'S A REAL CRISIS OUT. AND
EVEN LAST STOP. INFORMATIONAL
HEARING I INVITE AT THE FOR A
PLAN TO SHARE A LITTLE BIT OF
WHAT THEY'RE HEARING. BECAUSE
THE CALLS WOULD NOT STOP COMING
IN. AND THAT IS WHY WE WERE-
ABLE TO INCREASE IT TO. TWENTY
MILLION BECAUSE IT WAS NECESSARY
AT THE TIME BUT THAT'S NOT
SUSTAINABLE SO WE WANT TO THANK
YOU FOR YOUR PERSPECTIVE WHICH
IS REALLY IMPORTANT. I AND
FORGIVE ME AGAIN WE'RE GOING TO
HAVE TO. SPEAK THROUGH THE LAST
PART OF IT. REALLY THANK YOU DAN
AND I'M GONNA TURN IT OVER TO
SENATOR GAINES. BOB YOU HAVE
FIVE MINUTES IF WE CAN KEEP A
VERY SUCCINCT THANK YOU. FOR
THANK YOU SENATOR RUBIO THANK
YOU SENATOR NEW LOW FOR THIS OP
TO SPEAK I. AM THE OWNER OF A
SMALL INSURANCE AGENCY
INDEPENDENT AGENCY WITH MY WIFE
BETH AND OUR DAUGHTER HALEY- WE
HAVE THREE ADDITIONAL FULL TIME
EMPLOYEES IN A PART TIME
BOOKKEEPER. AS INDEPENDENT
CHURNS AGENTS WE REPRESENT A LOT
OF DIFFERENT. INSURANCE
COMPANIES BUT THEY ARE SMALLER
IN THE MARKET PLACE COMPARED TO
A STATE. FARM OR FARMERS ARE ALL
STATE. AND SO THE END. OF THE-
THROUGH. APPLICATIONS THAT HAVE
BEEN SUBMITTED TO THE DEPARTMENT
OF INSURANCE THAT HAVE NOT BEEN
APPROVED. IS BASICALLY SHUTTING
DOWN THE INSURANCE MARKET BUT I
FEEL LIKE THERE'S MORE PRESSURE
ON- INDEPENDENT AGENTS ALTHOUGH
I'VE HEARD THAT ARE CHALLENGES-
EVEN WITH STATE FARM- NOT BEING
ABLE TO WRITE. HOMEOWNERS AS
THEY WERE EVEN A MONTH AGO- OUR
PERSONAL EXPERIENCES THAT- WITH
NATIONWIDE WE ARE ONE OF FOUR
HUNDRED AGENTS THAT LOST OR
AGENCY CONTRACTS SO WE'VE GOT-
SEVERAL- CLIENTS THAT WE'RE-
RACING TO FIND COVERAGE FOR-
ORGAN MUTUALS RECENTLY PULLED
OUT ON THE PERSONAL LINE SIDE. A
GOLDEN BEAR ANOTHER SMALL
INSURANCE COMPANY BASED OUT OF
STOCKTON. HAD KIND OF A BLUE
COLLAR HOMEOWNER'S POLICY THAT
WAS REALLY AFFORDABLE LIKE SIX
HUNDRED BUCKS A YEAR- THEY WENT
TO THE PARCHMENT OF INSURANCE
ASKING FOR A RATE INCREASE- THEY
WERE ABLE NOT ABLE TO GET THAT
RATE INCREASE. AND SERVICE
PULLED OUT OF THE MARKET AND SO
WE'RE KIND OF IN THE MIDDLE AS
AGENTS- TRYING TO FIND COVERAGE.
OF FOR OUR CLIENTS- IT IS NOT
SUSTAINABLE- A HEADED
OPPORTUNITY TO HEAR- VICTORIA
ROACHES THE PRESIDENT OF THE
CALIFORNIA FAIR PLAN. AND THIS
IS VERY SOBERING- BECAUSE IF YOU
LOOK AT WHAT'S HAPPENING
CALIFORNIA SINCE TWENTY
SEVENTEEN WITH THAT. FORTY
BILLION DOLLARS IN LOSSES AS A
RESULT OF WILDFIRES FORTY
BILLION. SHE SHARED WITH US THAT
IF THEY HAD A BILLION DOLLAR
LOSS. THEY COULDN'T PLATE PAY
THE CLAIM. SO IF WE HAVE ANOTHER
WILDFIRE THAT'S CONCENTRATED
WHERE THE CALIFORNIA FAIR PLAN
IS WRITING A LOT OF COVERAGE- AS
WE STATED EARLIER IN TESTIMONY-
THE INSURANCE COMPANY SOME
ASSUMING WILL BE HELD LIABLE.
FOR THE SHORTFALL AND- I THINK
THAT WILL CONTINUE TO CREATE A
DECLINE IN THE MARKET PLACE-
BOTTOM LINE I JUST WANT TO MAKE
SURE THAT WE CAN PROVIDE
SERVICES TO OUR CLIENTS AND THE
MARKET IS. TIGHTER THAN IT'S
BEEN IN I WOULD SAY AT LEAST
THREE DECADES HAVE BEEN IN THE
INSURANCE BUSINESS FOR. FORTY
TWO YEARS SO. IT'S REALLY TOUGH
ANYTHING THAT YOU COULD DO TO
PROVIDE RELIEF ON I WANT TO- I
KNOW THAT COMMISSIONER LARA SAID
DIFFICULT- SCENARIO HE'S
REPRESENTING LOTS OF DIFFERENT
INTERESTS. BUT I THINK BOTTOM
LINE WE WANT INSURANCE MARKET
THEY GIVE CHOICES TO CONSUMERS-
I THINK THAT'S GONNA COME WITH
SOME RATE INCREASES
UNFORTUNATELY- TO STABILIZE THE
MARKET. WE DON'T WANT OUR
COMPANIES PULLING OUT OF THE
STATE AND CREATING A BIGGER MASS
FOR THOSE COMPANIES THAT FEEL AN
OBLIGATION. AND MAY HAVE MORE
ECONOMIC MIGHT TO STAY HERE A
LITTLE LONGER- WE JUST NEED A
GOOD STABLE INSURANCE MARKET SO
THANK YOU APPRECIATE IT. THANK
YOU SENATOR GAINES- I YOUR
PERSPECTIVE WAS IMPORTANT TO AND
YOU KNOW AS I'M HAVING MEETINGS
AND DIFFERENT AREAS OF THE STATE
TALKING TO SMALL. COMPANIES LIKE
YOURSELVES AND THEY'RE HAVING A
HARD TIME AND SO I YOU KNOW I
REALLY REALLY APPRECIATE YOU
BRINGING THAT VOICE FORWARD
BECAUSE- YOU'RE AT THE- METAL IS
A LITTLE GUY IN THE MIDDLE BUT
YOU GET CAUGHT IN THE MIDDLE OF
YOU KNOW WHAT'S HAPPENING UP
HERE SO. I JUST WANNA SAY THANK
YOU AND- YOUR PERSPECTIVE IS
VERY CANCER ISSUE TALK TO YOUR
LOCAL INSURANCE AGENTS I THINK
I'LL TELL YOU SIMILAR THINGS
YEAH SIMILAR STORIES. AND THAT'S
WHAT I'VE BEEN HEARING SELL YOUR
VOICE IS IMPORTANT SO I WILL NOW
TURN IT OVER TO- DAVID CAPONIER
. YOU MAY BE RECEIVING READY
JUST KEEP IN MIND WE HAVE FIVE
MINUTES THANK YOU VENTURE THANK
YOU VERY MUCH- SO MUCH OF WHAT I
HAD TO SAY TODAY- HAS ALREADY
BEEN SAID- AND THEN THERE'S A
FEW THINGS I'D LIKE TO
REITERATE- YOU'LL WANT A
MANAGING PARTNER. OF THE LABOR
VASCONIA IT SAID INSURANCE
AGENCY IN THE NAPA VALLEY. WE
HAVE A HUNDRED AND THIRTY THREE
YEAR HISTORY OF SERVING THE
VALLEY- AND I'VE BEEN UP A
PARTNER THERE FOR TWENTY FOUR
YEARS. I'M ALSO A- RETIRED FIRE
CAPTAIN WITH THE FIRE DEPARTMENT
IN THE CITY OF SAINT HELENA. I
SERVE FOR TWENTY ONE YEARS
THERE- I HAVE. FOUGHT FIRES
AROUND THE STATE OF CALIFORNIA
AND ALSO THE SEVENTEEN FIRES IN
NAPA AND CINEMA. AS WELL AS A
GLASS FIRE THAT- DID SO MUCH
DEVASTATION IN OUR COMMUNITY-
THERE'S SO MUCH GOOD THINGS HAVE
BEEN SAID AS I SAID ALREADY-
WHAT I'D LIKE TO POINT OUT IS I
THINK THAT- PROP ONE OF THREE
HAS KIND OF COME FULL CIRCLE- IT
STARTED OUT WITH THE- NOBLE
INTENT I THINK BUT- IS NOW
HURTING CONSUMERS. AND- AS A-
CONSTITUENT OF SENATOR DODD AND-
CENTER OUT OF RED OAK GRILL AND
DEAL- THEIR DISTRICTS ARE BEING
DECIMATED BY THIS PROBLEM. THE
INSURANCE AFFORDABILITY ISSUE IT
IS SOMETHING THAT IS JUST.
HEARTBREAKING TO DESCRIBE- IT IS
YOUR SEEING CLIENTS LOSE
COVERAGE AFTER. DECADES OF BEING
LOST FREE- HAVING THEM LOOK AT-
RATE INCREASES THAT ARE IN THE
HUNDREDS. OF PERCENT- CENTER
DODD MENTIONED HE HAS THE L.
CONSTITUENTS THAT ARE GOING
NAKED. ALL THE TIME AND I CAN'T
STRESS THAT ENOUGH- OUR CLIENT
BASE IS. PICKING AND CHOOSING
BETWEEN WHAT THEY CAN POSSIBLY
DO- AND IT'S BECAUSE OF. THE
YOUR THINGS AT THAT PROP ONE OF
THREE IS DOING THAT DODD- IN
IMPACTS THE RATE FILINGS AND
HEALTH- RATES ARE BEING APPROVED
IN THE STATE. THE ONE THING THAT
WAS SAID THAT THAT REALLY
CONCERNED ME YOUNG CALIFORNIA'S
AND AMEND STATE. E. L. F.
THERE'S MANY STATISTICS THAT
BACK THAT UP. BUT TO HEAR THE
DEPARTMENT SAY THERE'S A VERY
SMALL NUMBER OF RATE FILINGS
THAT ARE COMING TO THE
DEPARTMENT I JUST I CAN'T
IMAGINE THAT- I KNOW WHY THE
THAT IS- AND IT'S BECAUSE WHEN
CARRIERS. GO SEE THAT RATE
FILING PROCESS THE ABUSE THAT
THEY- GO THROUGH WITH THE
DEPARTMENT. MAKES THEM NOT WANT
TO APPROACH THE DEPARTMENT.
THEY'VE BEEN GETTING SOME RATE
INCREASES- BUT THOSE ARE NOMINAL
IN A LOT OF CASES IN IN OUR
AREAS IT IT'S REALLY
CONSTRUCTING THE AVAILABILITY OF
COVERAGE- I DID BRING WITH ME-
AN EMAIL EXCHANGE THAT I HAD.
WITH THE CARRIER PARTNER THAT
HAS SERVED MANY OF OUR CLIENTS-
IN THE NAP AND CINEMA AREA- AND
HE SAID TO ME IN THIS EMAIL- AS
RECENTLY DISCUSSED WE'RE LOOKING
INTO NON ADMITTED PROPERTY
OPTIONS. AS A WAY FORWARD IN
CALIFORNIA WITH NEW AN
ADDITIONAL COVERAGE OFFERINGS.
WE BOTH KNOW THERE'S TREMENDOUS
OPPORTUNITY TO HELP INSURED
SOLVE REAL PROBLEMS HERE.
UNFORTUNATELY THE PROCESS AT THE
CDI DEAL WHY. IS IMPOSSIBLE. WE
PAID OVER A HUNDRED MILLION
DOLLARS IN WILDFIRE LOSSES WE
STILL RETAIN SIX BILLION DOLLARS
OF PROPERTY VALUES EXPOSURES AND
SOMEHOW WE'RE THE BAD GUY. SUCH
A SHAME. THAT'S THE POINT AND-
WITH EVERY KERRIER THAT I TALK
TO YOU WOULD HEAR THE SAME
THING. THEY CAN'T MAKE THE
MODIFICATIONS THERE FORM WE KEEP
TALKING ABOUT RATES AND RATES
ARE IMPORTANT- BUT EVEN CHANGING
SOME OF THE WAY THAT THE
INSURANCE FORMS WORKS. GIVES
CARRIERS A LITTLE BIT OF RELIEF
IN ORDER TO PROVIDE COVERAGES
THAT THEY CAN'T PROVIDE NOW-
THANK YOU VERY MUCH FOR YOUR
TIME AT- LEAD ANSWERING
QUESTIONS- BUT AGAIN I. THE LACK
OF RATE FILINGS THAT ARE COMING
TO THE APARTMENT. THE TIME THAT
IT TAKES AND NOT BEING ABLE TO
ADEQUATELY ADJUST FORMS. AND
ADOPT RATES TO THE MARKET THE
EXPOSURE THAT WE HAVE. WITH
WILDFIRE AND CLIMATE CHANGE IS
REALLY DEVASTATING OUR MARKET.
THANK YOU FOR THAT- YOU KNOW AND
I WE RECOGNIZE THAT TO WORK ON
OUR ISSUES YOUR CONFERENCES
ENDING NOW PLEASE HANG ON.
EXCUSE ME WHENEVER IF- SO
ANYWAYS WE RECOGNIZE THERE'S A
LOT OF ISSUES BUT I DO WANT TO
SAY AND- INSURANCE COMMISSIONER
LOUDEST DEFENSE- THIS IS THE WAY
THE SYSTEM IS SET UP. IN TERMS
OF YOU KNOW THE RATE FILING HE
HAS TO EAT HERE TO PROBLEM-
THREE IT'S A TRICKLE DOWN A FAX
SO HE'S JUST YOU KNOW HAVING TO
COMPLY WITH WHAT'S IN FRONT OF
HIM AND- ON YOU KNOW WE HAVE
THESE CONVERSATIONS OFTEN AND
YOU KNOW ALL AND THAT IS AGAIN.
THE SYSTEM THAT WE HAVE SET UP
RIGHT NOW BUT I APPRECIATE GIVEN
YOUR PERSPECTIVE I WILL NOW TURN
IT OVER TO. BOB AND MIKE BALK
MADAM CHAIR. BUT I ASK A QUICK
QUESTION- MY APOLOGIES ARE
ANSWERED OKAY NO PROBLEM- BUT
IT'S- TIMELY WITH THE- TO.
PARTICULARLY TO AGENTS WHO HAVE
TESTIFIED- MISTER ROSEN. EARLIER
STATED THAT- THE INSURANCE
COMPANIES HAVE GENERALLY
RECEIVED THE ROOM RATE INCREASES
THEY'VE ASKED FOR I THINK HE
CITED- AGGREGATE. OVERTIME
REQUESTS BEING TEN POINT 8% AND-
BEEN GRANTED TEN POINT 2%
SOMETHING LIKE THAT. THE
TESTIMONY THAT BOTH OF YOU HAVE
GIVEN. COMPLETELY FLIES IN THE
FACE OF THAT. HOW CAN YOU. HELP
ME WITHOUT. YOU CAN MAKE
STATISTICS SAY WHAT YOU WANT THE
SAME- AND INSURANCE COMPANIES
ARE ONLY ASKING FOR WHAT THEY
KNOW THEY WON'T GET. HARASSED ON
THE THAT WHAT THEY KNOW THAT
THEY CAN GET THROUGH. THEY'RE
NOT ASKING FOR WHAT THEY NEED- I
HAVE YET TO COME ACROSS AN
INSURANCE COMPANY THAT DOESN'T
WANT TO MAKE MONEY. AND LEADING
THE STATE. E. L. IS A SIGN THAT
THIS A NON SUSTAINABLE POSITION
FOR THEM- IF THEY CAN'T AVOID.
THE EXPOSURE IF THEY CAN'T GET
THE RATE THAT THEY NEED- WITHOUT
YOUR GETTING INTO THAT THAT
POSITION WITH WITH THE
DEPARTMENT AND PROP ONE OF THREE
AND- PEOPLE ASKING. YOU KNOW THE
PROCESS TAKING TWO YEARS TWO
YEARS TO GET A RATE FILING. YEAH
WE'RE GONNA HAVE ANOTHER GLASS
FIRE EVENT IN THOSE NEXT TWO
YEARS. AND YOUR RATE FILING THAT
YOU ASK FOR TWO YEARS AGO THAT
YOU MAY FINALLY GET. IS GOING TO
BE COMPLETELY INADEQUATE AT THAT
POINT. I THINK THEY TOOK. OVER
YOUR BY THINK THEY COULD'VE AND
I'VE HEARD A LOT OF CHALLENGES-
IF THEY COULD GET THROUGH THE
RATE APPROVAL PROCESS A LOT MORE
QUICKLY. BECAUSE IN A WAY YOU'RE
CREATING ANSWER ADVERSE
SELECTION SO. A LOT OF THE
COMPANIES LIKE PROGRESSIVE GOT A
70% RATE INCREASE. THAT'S GOOD.
BUT THEY DON'T WANT TO GET THEY
CAN ONLY HANDLE SO MUCH CAPACITY
RIGHT SO THEY WANT TO BE CAREFUL
OF NOT. WHEN IT COMES THE
PROPERTY OF NOT ENSURING TOO
MANY HOMES IN ANY ONE PARTICULAR
AREA BECAUSE IT COULD TAKE DOWN
AN INSURANCE COMPANY LIKE IT DID
OREGON MUTUAL THE PARADOX
PARADISE FIRE. THEY HAD TO MUCH
CONCENTRATION PARADISE THE
COMPANY WENT BANKRUPT SO THEY'VE
GOT TO BE CAREFUL THAT THEY'RE
NOT GETTING FLOODED. IF YOU WERE
ABLE TO GET APPROVALS THROUGH
MORE QUICKLY YOU WOULD HAVE. A
BROADER MARKET MORE OPTIONS FOR
INSURERS. HOW MUCH DOES THE
INTERVENOR PROCESS CONTRIBUTE TO
THIS. WELL I THINK IT NEEDS TO
BE SPED UP RIGHT AYE ANYTHING WE
CAN DO TO SPEED UP THE PROCESS
WOULD BE HELPFUL SO I THINK IT'S
ANYTHING OVER SIX POINT NINE HAS
TO GO THROUGH AN INTERVIEW-
PROCESS THAT'S MY UNDERSTANDING-
IF THAT COULD BE ACCELERATED
THAT WOULD BE FANTASTIC- BUT THE
PROBLEM IS THAT A LOT OF THESE.
YOU KNOW YOU CAN GO THROUGH THE
PROCESS IS SIX POINT NINE BUT
THAT'S NOT ENOUGH OF A RATE
INCREASE. TO JUSTIFY. AN
INSURANCE COMPANY TO BE ABLE TO
MAKE MONEY. IN THE STATE THERE.
IT'S REALLY REALLY IN THEIR SELF
INTEREST TO ONE RIGHT INSURANCE
IN CALIFORNIA BUT THEY'VE GOT TO
MAKE. A PROFIT AND- I THINK
UNDER PROP ONE OF THREE IT STILL
ALLOWS A PROFIT SIMILAR TO WATER
UTILITY WOULD MAKE. AND IF YOU
HAVE A LARGE INSURANCE COMPANIES
OPERATING IN FIFTY STATES. AND
THEY CAN MAKE MONEY AND SAVE
FORTY NINE. AND NOT IN
CALIFORNIA THEY'RE GONNA PULL
BACK AND THAT'S THAT'S WHAT
WE'RE SEEING IS THAT THEY'RE
THEY'RE NOT. WE'RE GETTING
REQUIREMENTS THAT YOU HAVE TO
BUNDLE INSURANCE FROM INSURANCE
COMPANIES OF SO MUCH CALLING YOU
FOR A HOMEOWNER'S QUOTE- WHAT WE
WANT THE AUTO TO WELL. MAYBE
THEY HAVE AUTO WITH TRIPLE A
THEY DON'T COME WHOSE THAT-
SORCHER INSING CHALLENGES LIKE
THAT OR- TO SLOW DOWN THE FLOW
INSURANCE COMPANIES ARE SAYING
WELL. YOU KNOW WE NEED TEN DAYS
BEFORE WILL BUYING COVERAGE. SO
WE'RE WE'RE EXPERIENCING ALL
THESE- HURDLES IN ORDER TO
PROVIDE COVERAGE. FOR CLIENTS.
BUT IT STILL COMES BACK TO THIS
RATE APPROVAL PROCESS. AND
LETTING IT REFLECT WHAT'S REALLY
HAPPENING IN THE MARKET PLACE.
SO A LOT OF THE REGULATIONS
THAT. WE IMPOSE IN CALIFORNIA.
ARE MANY TIMES IMPOSED WITH THE
IMPLIED ASSUMPTION AND MANY
TIMES UNSTATED ASSUMPTION THAT.
CALIFORNIA'S JUST TO GO TO
MARKET FOR BUSINESSES TO- NOT
WANT TO BE AND- AND YOU'RE
IMPLYING THAT. THAT MAY BE THE
CASE BUT YOU'RE ALSO SAYING.
THAT INSURANCE COMPANIES-
BECAUSE THEY CAN MAKE MORE MONEY
AND OTHER MARKETS ARE. LEAVING
THIS MARKET- NOW. ARE WE
APPROACHING A POINT WHERE. SO
MANY COMPANIES EXIT THE MARKET.
THAT WE CAN'T GET INSURANCE
COVERAGE. OF NOT BECAUSE OF RATE
ISSUES BUT JUST BECAUSE I THINK
THERE. YEAH I THINK I THINK WE
ARE I THINK THE EXAMPLE FAIR
PLAN IF YOUR PLAN HAS A BILLION
DOLLAR OR MORE LOS- YOU'RE GONNA
SEE A LOT OF INSURANCE COMPANIES
MAKING DECISIONS TO PULL OUT.
NOW HERE'S THE TOUGH PART
APPARENTLY AFTER PULLING OUT OF
THE MARKET IN CALIFORNIA STILL
OBLIGATED TO PAY IN. TO THE FAIR
PLAN OBLIGATION FOR TWO YEARS SO
YOU MAY HAVE COMPANIES THAT ARE
MAKING PREEMPTIVE DECISIONS TO
PULL OUT OF THE MARKET BECAUSE
THEY DON'T WANT TO BE OBLIGATED
ABOUT A FUTURE FIRED COULD OCCUR
. FOR WHICH CAT- PLAN WOULD BE-
YOU KNOW WOULD BE PAYING CLAIMS
. THANKS I SEE THAT INTERVENOR
PROCESS AS BEING A DETERRENT-
YUP TO. INSURANCE COMPANIES
DOING MORE IN THE STATE IT'S
MORE OF A DETERRENT THAN A DELAY
PROCESS AND- THE EXODUS OF
INSURANCE COMPANIES YA I SEE IN
THE NEAR TERM IS HAVING
INCREASING VELOCITY. IT'S GOING
TO CONTINUE IT IN MY VIEW AND I
THINK AS THE NEXT ONE PULLS OUT.
YOU'RE GONNA SEE TO THE NEXT
TIME FIVE THE NEXT TIME- AND IN
A VERY RAPID EXPANSION OF THAT.
CONTRACTION FROM THE CALIFORNIA
MARKET- WE KEEP TALKING ABOUT
THE FAIR PLAN THERE'S BEEN MUCH
ABOUT THAT. BUT THE FAIR PLAN IS
NOT. INSURANCE I MEAN IT'S
INSURANCE BUT IT'S NOT THE ONLY
INSURANCE THAT THAT CLIENT
NEEDS. THEY ALSO NEED A
COMPANION POLICY TO GO WITH
THAT. THE FAIR PLAN IS SIMPLY
THE MINIMUM STANDARD TO MEET
THEIR FINANCIAL OBLIGATIONS OF
YOUR MORTGAGE IT'S NOT THE
INSURANCE THAT YOU NEED FOR YOUR
HOME IT DOESN'T INCLUDE. ANY
LIABILITY COVERAGE IT'S NOT A
FULL SOLUTION SO EVEN THOUGH
THAT MARKET EXIST THEY'RE STILL
GOING TO THAT NONSTANDARD
MARKETING PAYING VERY EXPENSIVE
PREMIUMS FOR THE OTHER COVERAGES
THEY NEED. IF THEY CAN GET THEM
. THERE'S A GOVERNMENT ONE MORE
COMMENT ON THE REALLY VERY FAR
THINK YOU BECAUSE THAT'S WHOLE
NOTHER. COULD BE A WHOLE NOTHER
MASS BECAUSE THE REINSURERS ARE
COMING AND THEY'RE LAYING LATER
IN COVERAGE OF THE INSURANCE
COMPANY MIGHT TAKE. THE FIRST-
BILLION DOLLARS IN CLAIM
OBLIGATION AND THEN. YOU BRING
IT AND- REINSURANCE YOU LATER IT
WITH DIFFERENT INSURANCE
COMPANIES BUT- IF THEY'RE NOT
ABLE TO GET THE RATE. THAT THEY
THINK THEY NEED THEN THEY'LL
PULL OUT OF THE MARKET AND
THEY'VE GOT A REAL MESS ON YOUR
HANDS IN TERMS OF. COMPANIES
EVEN BEING BEING ABLE TO PROVIDE
THE COVERAGE SO- I THINK THAT IS
A FLAW- IN TERMS OF WHEN YOU'RE
LOOKING AT RATES IF YOU CAN'T
TAKE REINSURANCE INTO
CONSIDERATION. IN TERMS OF
APPROVING A RATE INCREASE. THAT
JUST DOESN'T CONNECT WITH WHAT'S
HAPPENING IN REALITY. THANK YOU
OF ALL AND I JUST WANNA ADD A
LITTLE BIT TOO WHICH IS HE JUST
SAID- YOU KNOW I HEAR OFTEN THE
CRITICISM THAT THE ENTRANCE-
INSURERS. KEEP ASKING FOR RATING
PURPOSES OVER AND OVER AGAIN.
AND I FIND YOU KNOW THE SIX
POINT NINE CAP TO SOMEWHAT BE.
AN ISSUE BECAUSE YOU KNOW THEY
HAVE THAT'S FOR SIX POINT NINE
TO MAKE SURE THAT THEY DON'T
HAVE TO GO THROUGH THE COMMUTER
PROCESS BUT- THE NOW THE KEEP
COMING AGAIN OVER AND OVER AGAIN
AND THAT'S NOT. QUITE THE
ADEQUATE INSURER OF RATE
INCREASE THAT THEY NEED SO. THAT
I GET THE SYSTEM IS FLAWED AS I
SEE IT AND- NOT THAT ITS THE-
WRONG OR- GOOD OR BAD IS JUST IT
I THINK WE HAVE TO REALLY LOOK
INTO THAT I MEAN I WOULD RATHER
HAVE SOMEONE THAT'S GOING TO ASK
FOR WHAT THEY NEED. ONE TIME AND
GET IT APPROVED VERSUS. TRYING
TO SORT OF PLAY THESE AYE I
DON'T WANT TO YOU KNOW JUST
RESPECT THE MARKET BUT SOMEWHAT
OF A CAME BECAUSE YOU WANT TO
STANDARD IS SIX POINT NINE JUST
TO MAKE SURE YOU DON'T. GET
DELAYS AND DELAYS AND SO AGAIN
M. IT'S JUST THE WAY THE SYSTEM
IS SET UP I'M JUST POSING THIS
SORT OF THE QUESTION IN TERMS
OF. YOU KNOW SOMETHING WE MIGHT
HAVE TO EXPLORE I RATHER HAVE
SOMEONE DO IT ONCE. AND GET WHAT
THEY NEED FOR SAYS YOU ARE YOU
KNOW WE'RE DISCUSSING HERE
RIGHTEOUS STANDARD SIX POINT
NINE SOME OF I'M NOT. GOING FOR
RATE INCREASES AT ALL JUST
BECAUSE THEY DON'T WANT TO DEAL
WITH THE PROCESSES AND IT'S
COSTLY ITS LENGTHY SO. ANYHOW
AGAIN ALL THESE ARE GOOD
QUESTIONS JUST TO SET TO POSE
IN. AND EXPLORE AND SEE IF THERE
IS POSSIBILITIES OF REVIEW AND-
AND DIE AND I BELIEVE MISTER DOT
SAID IT OR YOUR- BE GREAT IF WE
CAN HAVE. YOU KNOW- CONSUMER
WATCHDOG SAID THE INSURANCE
INDUSTRY CDI EVERYONE. OUT THE
MARKET COME TOGETHER AND SEE IF
WE CAN FIGURE OUT. SOLUTIONS FOR
THIS SO THAT WE DON'T HAVE TO
BE- YOU KNOW PLAYING THESE ARE
SOMEWHAT GAMES OF. STATE UNDER
SIX POINT NINE AND- AND NOT
GETTING WHAT THEY NEED SO. WE'RE
GOING TO MOVE OVER TO. NOW THE
IMAGES GIVE A- OVER HERE- I WAS
GONNA GO THIS WAY BUT I'M NOT.
CONTINUE ON THIS SITE WHILE. I'M
ALLOW. THE CHIEF DAVE WHEN
OCCURRED TO. TO SAY A FEW WORDS
AND THEN I'LL TURN IT OVER TO
YOU AND I KNOW WE STILL HAVE
SOMEONE ON THE- UNSEREM SELL.
OUT YOU. HAVE FIVE MINUTES TO
SHARE WITH YOU SEE AN- I WILL
REMAIN TO. WHEN YOU HAVE A
MINUTE THANK. YOU THANK YOU
MADAM CHAIR. MEMBERS OF THE
COMMITTEE MY NAME'S DAVE. ON A
CAR I THE FIRE CHIEF. THE MORAGA
ORINDA FIRE. PROTECTION DISTRICT
I. LEAVE TO CAL. FIRE TO.
ASSOCIATION WHILE. URBAN
INTERFACE. BASED FORCE.
REPRESENT THE GROUP ON THAT CAN.
FIRE MITIGATIONS AND RESPONDING
WORKGROUPS. MUSSO A HOOVER
VETERAN FELLOW AT STANFORD
UNIVERSITY WORKING ON THE
INTERSECTION OF WILDFIRE AND
INSURANCE AVAILABILITY- I THINK
THEY'RE TWO IMMUTABLE FACTS
ABOUT WILDFIRE THAT ARE WORTH
REMEMBERING. ONE IS THAT IS A
NATURAL RECURRENT PART OF THE
CALIFORNIA ENVIRONMENT. WHILE
DOCTOR WARA WHOSE OPINION I
RESPECT GREATLY REFERRED TO THE
FIRE TO TWENTY YEARS AGO IS
QUAINT I WOULD ARGUE THE FIRES
OF THE LAST FIVE YEARS ARE
QUAINT COMPARED. TO THEIR PRE
DEVELOPMENT NATURAL STATE IN
WHICH FORTY EIGHT MILLION ACRES
BURNED PER YEAR. IN CALIFORNIA.
AND THAT IS SIMPLY WHAT A FIRE
PRONE TO FIRE ADAPTED
ENVIRONMENT REQUIRES TO REMAIN
IN EQUILIBRIUM. WHILE THE
EXCLUDED WILDFIRE FOR THE LAST
HUNDRED TWENTY YEARS AS WE HAVE
BUILT HOMES IN THESE AREAS. WE
HAVEN'T STOP PHOTOSYNTHESIS IN
THERE NOW IS A BILL SENSUALLY
COMING DO WITH REGARD TO THE
ACCUMULATION OF COMBUSTIBLE
EDUCATION OTHER MATERIALS IN
THESE AREAS. THAT CAN AND WILL
BURN WITH THE STRUCT OF RESULTS.
THE SECOND IMMUTABLE TRUTH OF
WILDFIRE IS THAT THEY'RE ONLY
THREE FACTORS THAT CONTRIBUTE TO
WILDFIRES SPREAD THOSE ARE
TOPOGRAPHY WEATHER AND FUEL OF.
THE TOPOGRAPHY IS UNCHANGEABLE
THE WEATHER IS BAD AND GETTING
WORSE. AND THE FUEL LOAD CAN BE
MODIFIED AND WIN FUEL LOTUS
MODIFIED FIRE CANNOT SPREAD TO
THE SAME SPEED INTENSITY IT DOES
AN UNMODIFIED ENVIRONMENT. AS WE
ARE ABLE TO HARNESS AND ACHIEVE
ALIGNMENT AROUND NEED TO REDUCE
WILDFIRE RISK PACIFIC LEE
THROUGH THE MODIFICATION OF
FUELS AND THE DEVELOPMENT OF
FIRE ADAPTED RESILIENT
COMMUNITIES. THAT ARE
CHARACTERIZED. BY HARDEN HOME TO
THE NEW CONSTRUCTION OR RETROFIT
SENSIBLE THOUGHTFUL RETROFITS OF
EXISTING HOMES AND THE CREATION
DEFENSIBLE SPACE AROUND THOSE
HOMES. AS REQUIRED BY EXISTING
STATE LAW UNDER PRC FORTY TWO
NINETY ONE GOVERNMENT CODE FIVE
ONE ONE EIGHT TWO FOR MANY YEARS
THESE ARE NOT NEW CHANGES.
LONGSTANDING YET POORLY ENFORCED
WITH PORT OPTION RIGHT TO MANY
OF OUR- MOST EXPOSED AREAS. AND
THOUGHTFUL INTERVENTIONS TO
CREATE MODIFIED FUEL AREAS ALONG
THE FIRE PATHWAYS THAT WILL LEAD
WILD FIRE INTO OUR COMMUNITIES.
AS WE CHIEF THOSE GOALS WILL
REDUCE THE NEGATIVE OUTCOMES
WE'VE SEEN WHEN THE NATURAL
RECURRING AND PREDICTABLE FUTURE
FIRES OCCUR. IF THOSE FIRES DO
NOT DAMAGE THE VALUES AT RISK WE
HAVE STOPPED THE BLEEDING IF YOU
WILL WE HAVE SET CONDITIONS FOR
WHAT IS GOING TO BE A MULTI
GENERATIONAL EFFORT TO RESTORE
BOUNCED ARE FORCED ENVIRONMENT.
AS A LOCAL GOVERNMENT FIRE CHIEF
FOR THE LAST FIVE YEARS I HAVE
WORKED. DAY AND NIGHT TO REDUCE
MY COMMUNITIES EXPOSURE TO FIGHT
WILDFIRE RISK AS THE FIRE CHIEF
AND THE FIRE CODE OFFICIAL
MEETING I HAVE THE AUTHORITY TO
PASS MORE RESTRICTIVE
PROGRESSIVE AMENDMENTS TO THE
FIRE CODE. AND MORE RESTRICTIVE
ORDINANCES WHICH WE HAVE DONE
AND WE HAVE SOUGHT TO GET OUR
COMMUNITY TO ADOPT THEM. ONE OF
THE CHALLENGES WE HAVE IS THAT
WILDFIRE IS AN ABSTRACT THOUGHT
FOR MOST RESIDENTS. ON THE OTHER
HAND INSURANCE IS AN ANNUAL
CONCERN FOR RESIDENTS I GET FAR
MORE QUESTIONS FOR THE RESIDENTS
OF MY COMMUNITY. ABOUT THE
IMPACT THEY HAVE WHEN IT COMES
TO EITHER RATE INCREASES OR OR
MORE RECENTLY AVAILABILITY OF
INSURANCE. ARE FAR MORE
QUESTIONS ON THAT TOPIC THEN
THERE ARE ON THE QUESTION OF
WILDFIRE. BECAUSE IN THE EAST
BAY WHERE THE FIRE DISTRICT IS
PRESENT WE HAVE NOT HAD A MAJOR
DESTRUCTIVE FIRE SINCE NINETEEN
NINETY ONE. TO FIRES ABSTRACT
BUT INSURANCE IS ANNUAL AND
RECURRING. AND IF THERE IS
ALIGNMENT WHICH I BELIEVE THERE
IS BETWEEN GOVERNMENT REGULATORS
INDUSTRY FIRE SERVICE AND
RESIDENTS. AROUND A DESIRE A
SHARED DESIRE TO REDUCE WILDFIRE
LOSS A RESIDENT DOES NOT WANT TO
RECEIVE AN INSURANCE PAYOUT
CHECK FROM LOSING THEIR HOMES.
IT WOULD MUCH RATHER NOT LOSE
THEIR HOME JUST AS THE CARRIER
DOES NOT WANT TO WRITE THAT
CHECK WE ARE ALL IN ALIGNMENT
AROUND. WHEN WE ARE IN ALIGNMENT
AND WE CAN UNDERSTAND THAT A
LIME AND WE CAN SPEAK WITH ONE
VOICE ABOUT THE MITIGATIONS THAT
MATTER THAT BE CORPS MITIGATIONS
FOR CREATION DEFENSIBLE SPACE
AND THOUGHTFUL HOME RETROFIT
SPECIFICALLY THE REPLACEMENT
EVENTS AND NOT CLASS A. RATED
ROOFS. WE CAN THEN QUICKLY MOVE
TO REDUCE THE EXPOSURE RISK BY
HARNESSING THE MARKET'S ABILITY
TO PRICE RISK AND NOTES
SIGNALING THAT PRICING EVERY
SENSE TO RESIDENTS FOR THE NEED
TO DO THIS WORK. WHEN WE DO NOT
HAVE THAT ALIGNMENT WE ENCOUNTER
EMOTIONAL BARRIERS TO THE
REDUCTION OF WILDFIRE RISK
HAVING TO DO WITH PEOPLE SENSE
OF PLACE. WITH THEIR ATTACHMENT
TO VEGETATIVE ITEMS IN CLOSE
PROXIMITY TO THE HOME THAT ARE
DIRECTLY CORRELATED WITH. VERY
WELL REVIEWED AND ACCEPTED
SCIENCE TO INCREASE WILDFIRE
LOSS. WE ENCOUNTER RESISTANCE IN
MOST CASES THIS IS NOT A MATTER
OF RESOURCES IS A MATTER OF WILL
AND DESIRE TO DO THE WORK. ON
ONE HAND WE CAN SAY THERE ARE
ONE POINT TWO MILLION HOMES IN
THE WILDLAND URBAN INTERFACE IN
CALIFORNIA WHICH IS A DAUNTING
NUMBER IF YOU'D FROM CENTRALIZED
TOP DOWN APPROACH. ON THE OTHER
HAND WE CAN SAY THE TWO POINT
FOUR MILLION RESIDENTS OF THOSE
ONE POINT TWO MILLION HOMES IF
PROPERLY INCENTIVIZE EDUCATED
ENCOURAGED. CAN MAKE SHORT WORK
OF THE LOW COST HIGH IMPACT
MITIGATIONS TO REDUCE THEIR
HOMES EXPOSURE TO WILDFIRE. AND
NOT ONLY TO DO IT ONCE THE ONE
TIME INTERVENTION THE INITIAL
ENTRY BUT TO MAINTAIN IT OVER
TIME AS IS REQUIRED. AND AS WE
IDENTIFY THE OPPORTUNITIES TO
REPORT AND VERIFY THAT
INFORMATION. INTO THE CAT RISK
MODELS THEY CAN BE USED FOR THE
PRICING OF RISK WE CAN SEE IT
COMMUNITIES AVERAGE ANNUAL LOSS.
FALL PRECIPITOUSLY BECAUSE IN
THE CURRENT ENVIRONMENT A
COMMUNITY SUCH AS THE ONE THAT I
REPRESENT THAT IS MADE ENORMOUS
INVESTMENTS. INDEFENSIBLE SPACE
HOME HARDENING INTERRUPTION OF
FIRE PATHWAYS AROUND OUR
COMMUNITY AND OUR FIREFIGHTING
RESPONSE THE WEIGHT OF
SUPPRESSION ATTACK WE CAN PUT
AGAINST A FIRE. WE ARE
EFFECTIVELY PENALIZED BECAUSE
THERE IS NO MECHANISM FOR US TO
REPORT THIS GOOD WORK. TO THE
INSURANCE INDUSTRY SO THAT OUR
PREMIUMS THE PREMIUMS PAID BY
THE RESINS MY DISTRICT REFLECT
THESE INVESTMENTS IN THE CURRENT
FIREMAN THAT SIMPLY DOES NOT
HAPPEN. I BELIEVE WE WILL NEED
THOSE MECHANISMS IN ORDER TO
SCALE THIS AND TO RAPIDLY MOVE.
TO A MORE FIRE ADAPTED RESILIENT
FUTURE WORK COMMUNITIES. CAN
EXPERIENCE CLOSE PROXIMITY TO
WILDFIRE WITHOUT THAT NATURALLY
CONVERTING TO LOS. HAVE SERVED
AS A FRONT LINE BUT RESPOND- ON
MANY OF THE MAJOR WILDFIRES THAT
WERE MENTIONED BEFORE. AND WE
SPEND ENORMOUS AMOUNTS OF TIME
AND DIVERT ENORMOUS NUMBERS OF
FIREFIGHTING RESOURCES ON THESE
FIRES. TO THE CREATION OF
DEFENSIBLE SPACE AROUND HOMES
THAT ARE BEING MAINTAINED IN
VIOLATION OF LONG STANDING AND
WELL ESTABLISHED STATE LAW. THAT
ARE SIPHONING AWAY RESOURCES
THAT WOULD OTHERWISE BE ABLE TO
MANAGER CONTAIN THE FIRE. AND
FAILED TO SET CONDITIONS FOR
FIREFIGHTERS SUCCESS AS WE
MENTIONED EARLIER. WE HAVE MADE
ENORMOUS INVESTMENTS AT THE
STATE LEVEL AND OUR FIREFIGHTING
RESPONSE WE HAVE MANY MORE
FIREFIGHTERS- TANKERS AND OTHER
DELIVERIES OF SUPPRESSION
MECHANISMS NOW THAN WE DID
BEFORE. BUT WHEN HOMES HAVE NOT
CREATED DEFENSIBLE SPACE IN
ADVANCE OF THE FIRE WE HAVE NOT
SET CONDITIONS FOR EFFECTIVE
FIREFIGHTING RESPONSE.
FIREFIGHTERS IN THE FACE OF A
FAST MOVING FIRE ARE UNABLE TO
BOTH FIGHT THE FIRE AND PREPARE
HOMES TO RECEIVE FIRE AND
PRIORITIZATION IS NORMALLY GIVEN
TO PREPARING HOMES TO RECEIVE
FIRE. WHICH TAKES AWAY FROM OUR
EFFORTS OTHERWISE CONTAINERS
PRESS THE FIRE I BELIEVE BY
RECOGNIZING ADVANCING THE
ALIGNMENT MARKS ALL THE PLAYERS.
AROUND SHARED UNDERSTANDING OF
MITIGATIONS THAT MATTER NOT ONLY
WHAT THEY ARE BUT THE PRESENCE
AND VERIFICATION OF THOSE ON AN
ANNUAL BASIS. WE HAVE AN
OPPORTUNITY TO RAPIDLY MOVE THE
NEEDLE AND REDUCE OUR STATE
EXPOSURE TO WILDFIRE RISK BEHALF
TO ANSWER ANY QUESTIONS AND
GRATEFUL FOR THE OPPORTUNITY. I
WILL. THE MEMBERS ANY QUESTIONS
. YOUR CRAFT I'M JUST A IF YOU
WANT TO JUST EXPAND A LITTLE BIT
FOR YOU MAY I KNOW THAT YUP
WE'VE MADE INVESTMENTS CAN YOU
SHARE A LITTLE BIT OF THE
TECHNOLOGY. THAT PERHAPS YOU
KNOW SOMEONE IN THIS ROOM MAY
NOT KNOW WHAT ARE SOME OF THE
NEW TECHNOLOGIES THAT YOU GUYS
ARE. INVESTING IN OR FOR
IMPLEMENTING THAT- YOU PERHAPS
HAVE NOT SEEN OUR FOR PREVENTION
RESPONSE AND PREVENTION YES
MA'AM SO. AT THE FIRST P.
SEVENTY PREVENTION IS GROUND
BASED ASSESSMENT SO THAT WE KNOW
WHAT ARE THE CONDITIONS AROUND
THE HOUSE GENERATING FROM THOSE
A STANDARDIZED REPORT THAT GIVES
A HOMEOWNER AID TO SYNC LIST OF
THESE OF THE- MEDICATIONS THAT
ARE REQUIRED ONE OF THE
CHALLENGES WE HAVE IS WE HAVE
CONFLICTING CONFUSING
INFORMATION REACHING HOMEOWNERS
THAT REINFORCES THE STATUS QUO
BIAS. WHEN PEOPLE HEAR MULTIPLE
THINGS IT GIVES THEM A VERY IT
IS WHICH ARE IN CONFLICT WITH
EACH OTHER GIVES A VERY EASY
PATHWAY. TO DOING NOTHING SO THE
STANDARDIZATION OF THE
INSPECTION PROCESS IN THE
DELIVERY OF THAT INFORMATION
STATE FIRE TRAINING AB ONE OF
THE OFFICE STATE FIRE MARSHAL
FUNCTIONS RECENTLY ADOPTED
APPROVED AND HAVE FIELDED A
STANDARDIZED HOME INSPECTION-
HUMMING MISSIONS ON A DEFENSIBLE
SPACE INSPECTOR COURSE THAT IS A
STEP TOWARDS THE
STANDARDIZATION. OF THAT
INFORMATION. AND THE NEXT WHICH
IS AN EVOLVING AREA. IS HOW WE
CAN REPORT. HOMES THAT ARE IN
COMPLY. WITH UNDERSTOOD AND
ACCEPTED MITIGATIONS HOW WE CAN
REPORT THAT INFORMATION. TO CAT
RISK MODELER SO THAT THEIR
MODELS WILL REFLECT CONDITIONS
THAT ARE ACTUALLY ON THE GROUND.
INSTEAD OF UPDATED SATELLITE
PICTURE THAT MAY BE AS MUCH AS
NINE YEARS OLD DEPENDING ON ON
WHICH YOU MODEL THEY'RE USING
NOW. WORK IN THAT AREA CONTINUES
TO EVOLVE WORK WITH MY
COLLEAGUES- MICHAEL WARREN NANCY
WALK INS AND OTHERS WHO WE CAN
BE AND AT STANFORD MUSCLE. THANK
YOU SO I MEAN I HEARD YOU SAY
THAT IT WOULD BE- YOU JUST
ACTUALLY MENTIONED THAT
REPORTING JUSTICE INVESTING
VESTMENTS AND REAL TIME VERSUS-
HAVING TO LOOK AT THE SOUTH
SATELLITES MON I KNOW THAT'S AN
ISSUE- I THINK WE WILL. I TALKED
TO PARTNERS ACROSS THE GLOBE- I
THINK IN PARTICULAR NEW ZEALAND
AND CHINA. THEY'RE ALLOWING THAT
TYPE OF. INFORMATION TO ATTACH
IT TO COME FORWARD IN REAL TIME
AND I KNOW THAT WE- ARE STILL
HAVING CHALLENGES IN CHINA CREE
OF. IF WE CAN USE CAT MODELS
AND- AND BE MORE FOR LOOKING BUT
THANK YOU FOR THAT INFORMATION
I'M GONNA. MOVE ON BECAUSE I
HAVE TO BUT THERE'S SO MUCH
THERE THAT I WANT TO REACH OUT
TO YOU. ALL FLIGHTS TO MAKE SURE
THAT WE- UP SIT DOWN AND SEE HOW
WE CAN. TAKE THE INFORMATION YOU
JUST SHARED AND- PUT INTO POLICY
AND SEE HOW WE CAN HELP YOU IN
THAT AREA. I'M LIKE WELL I GUESS
I WOULD TO WANT TO GIVE YOU THIS
LAST QUESTION- IF YOU'RE SITTING
IN OUR SEATS. YOU HAVE THE
ABILITY TO CREATE POLICY WHAT
WOULD BE THAT TOP LINE ITEM THAT
YOU WOULD PUSH FORWARD. THE
ENFORCEMENT OF EXISTING
DEFENSIBLE SPACE REGULATIONS
THERE ARE- THERE IS A DELTA
BETWEEN THE ASSESSMENT
ACTIVITIES OCCURRING AND
DISSOCIATED- VIOLATION NOTICES
THE COMPEL ACTION. THERE IS ALSO
A DELTA BETWEEN EFFORTS TAKEN
OUT AT THE STATE LEVEL TO
ENFORCE STATE MINIMUMS. AND
LOCAL GOVERNMENT EFFORTS WHICH
INCLUDE MODIFICATIONS TO
AMENDMENTS TO THE FIRE CODE
MINIMUMS AND LOCAL OR NICHE IS
WHICH MEET OR EXCEED STATE
MINIMUMS. RIGHT NOW THOSE
EFFORTS ARE NOT ALIGNED MOST OF
THE HOMES WE'RE TALKING ABOUT IN
THE WILDLAND URBAN INTERFACE.
FALL WITHIN LOCAL GOVERNMENT
JURISDICTIONS EITHER MUNICIPAL
FIRE DEPARTMENTS OR FIVE FIRE
DISTRICTS. THERE IS NOT
ALIGNMENT AROUND THE INSPECTION
ENFORCEMENT PROCESS AND AS A
RESULT OF THAT. WE DO A LOT OF
TIRE KICKING. WERE EXPLAIN TO
FOLKS SAY THESE ARE THE THINGS
THAT SHOULD BE DONE. MY
EXPERIENCE IN THE FIRE DISTRICT
IS IF THAT'S NOT ACCOMPANIED BY
A CITATION. GIVEN THIRTY DAYS TO
COMPLY AND WE CAN SPEND YEARS
GOING BACK. WORKING THROUGH THE
OUTREACH AND EDUCATION SIDE
THERE'S AN IMPORTANT ROLE FOR
INCENTIVES AS WELL BUT
ULTIMATELY THESE MUST BE
FOLLOWED. UP WITH ENFORCEMENT- A
AN ANALOGY I USE RIGHT NOW IS
THE- IF YOU HAVE A TAIL. THAT
OUT AND PULLED OVER BY POLICE
OFFICER. THEY INFORM YOU THE
TAILLIGHT IS OUT AND THAT
ACCOMPANIED IS ACCOMPANIED BY A
FIX IT TICKET THE GIVES YOU
THIRTY DAYS TO CORRECT A
VIOLATION. MAKE WE NEED TO MOVE
SENT A SIMILAR UNAPOLOGETIC
ENFORCEMENT. IN THE DEFENSIBLE
SPACE AROUND. THANK YOU AND
THANK YOU FOR ALL THE WORK THAT
FIREFIGHTERS TO APPRECIATE YOUR
WORK. I WILL NOW MOVE OVER TO
YOU SIR- AND I BELIEVE- LET'S
SEE HERE AT MIKE FLOCK RIGHT
PUBLIC POLICY ECONOMISTS
CALIFORNIA ASSOCIATION OF
REALTORS. THANK YOU MADAM CHAIR
MEMBERS OF THE COMMITTEE MY NAME
IS MIKE FALL COME THE PUBLIC
POLICY ECONOMIST FOR THE
CALIFORNIA ASSOCIATION OF
REALTORS- I DO HAVE A
PRESENTATION- I'M GOING TO.
BREEZE THROUGH IT IN THE
INTEREST OF TIME- PARTLY BECAUSE
A LOT OF PREVIOUS SPEAKERS HAVE.
TOUCHED ON SOME THINGS I'VE
TALKED ABOUT MORE COMPETENT. AND
INTERESTING WAY THAN I POSSIBLY
COULD AND I ALSO MADE ELEVEN
SLIDES FOR A FIVE MINUTE
PRESENTATION. AND I'M SUPPOSED
TO BE THE GUY THAT'S GOOD AT
MATH SO. YOU KNOW. A RIGO AND
I'LL REMIND YOU WHEN WE HAVE A
MINUTE YEAH. THANK YOU. SO AS-
THE PREVIOUS SPEAKERS OF NOTED I
YOU KNOW I'LL LIGHTING THE
PROBLEM FOR- INSURANCE SO.
DELIVER MILLION CALIFORNIANS. A
LIVE IN HIGH RISK FIGHT WILDLIFE
WILD FIRE AREAS. AND NEARLY TWO
POINT SEVEN IN VERY HIGH RISKS
IN THESE NUMBERS HAVE
FLUCTUATED- AND I'VE SEEN
DIFFERENT NUMBERS BUT THESE SEEM
TO BE- THE MOST- YOU KNOW. THE
BEST NUMBERS I COULD FIND AND I
JUST WANT TO. PLUG REAL QUICKLY
ABOUT FLOODING AND- YOU KNOW
COASTAL RISE AT ONE POINT FIVE
MILLION PROPERTIES ARE AT RISK
OF SEVERE FLOODING IN ONLY 2% OF
THOSE PROPERTIES HAVE FLOOD
INSURANCE RIGHT NOW- SO THAT'S A
PROBLEM TO KEEP AN EYE ON. IN
THE FUTURE AS WELL- I DID THREE.
INTO HOW MANY STRUCTURES HAVE
BEEN DAMAGED AND LOST BY RECENT
FIRES AND WHAT I FOUND SINCE TWO
THOUSAND FIVE IS THAT SIXTY FIVE
THOUSAND STRUCTURES ROUGHLY.
HAVE BEEN DESTROYED MACCABI
HOMES COMMERCIAL BUILDINGS
OUTBUILDINGS AND FIVE OF THE
WORST FOUR OF THE FIVE WORST
YEARS OF LOSS OF PROPERTY
ANCHOR. OCCURRED IN THE LAST
FIVE YEARS- IN RECENT FIRES- AND
SO HOW MUCH ARE PREMIUMS
INCREASING I FOUND THIS. IN A
COUPLE OF DIFFERENT STUDIES BUT
THIS WAS PROBABLY THE BEST I'VE
FOUND IN VERY HIGH RISK
CATEGORIES ON AVERAGE IS 24% FOR
HOMEOWNERS INSURANCE ABOUT 57%
FOR THE FAIR PLAN. AND AGAIN
THAT'S AN AVERAGE IN VERY VERY
HIGH RISK ZIP CODES IN AREAS
THAT PERCENTAGE MIGHT BE
SIGNIFICANTLY HIGHER. AND YOU
WILL HAVE HIGHER RATES OF NON
RENEWAL- IN THOSE AREAS AND THIS
AMOUNTS TO A COUPLE HUNDRED
DOLLARS FOR A LOT OF HOMEOWNERS.
AND I REALLY WANT TO PLACE THAT
WITHIN THE CONTEXT OF THE
AFFORDABILITY CRISIS THAT WE'RE
CURRENTLY HAVING IN CALIFORNIA
IN TERMS. OF HOUSING- THIS IS
WHERE I'M MOST COMFORTABLE THIS
IS THE HOUSING AFFORDABILITY
INDEX THAT WE- ARE THE RESEARCH
TEAM THAT I WORK WITH WE ALL PUT
THIS OUT. TODAY SO THIS IS THE
PERCENTAGE OF HOUSEHOLDS THAT
CAN AFFORD A MEDIAN PRICED HOME
IN CALIFORNIA. CALIFORNIA AS OF
THIS LAST QUARTER- THAT NUMBER
IS CURRENTLY TWENTY PERCENT- AND
WE'RE TALKING ABOUT INCREASE
PREMIUMS- INCREASE BARRIERS TO
HOMEOWNERSHIP. WERE ATTACKING
THAT ON TO A HOUSING
AFFORDABILITY CRISIS THAT IS
RELATIVELY SEVERE I MEAN VERY
SEVERE TWENTY IF 20% OF
FAMILIES. CAN AFFORD A MEDIAN
PRICED HOME THAT'S A VERY LOW
NUMBER AND THREE THINGS KIND OF
GO INTO THIS THREE INGREDIENTS
FIRST THE COST OF A MEDIAN
PRICED HOME. SECOND YOU KNOW
INSURED- INTEREST RATES MORE
EXPERIENCED THINGS LIKE THAT.
WHICH AS YOU KNOW OUR
FLUCTUATING GOING UP. NOW I'M A
FREE HEARING OF. I GUESS MY SON
TELLING. CALL WE CAN. PEOPLE TO
MEET OUR WOULD BE GREAT THANK
YOU I'M SO SORRY ALL RIGHTS ARE
. THIS IS MY BOSS CAME- AND- SO
I WANTED TO PUT OUR CURRENT- YOU
KNOW AFFORDABILITY CRISIS IN THE
CONTEXT BECAUSE I CAN. SAY 20%
AND THEN ROMEO ECHO YEAH
COMPARED TO WHITE SO. BACK IN
TWENTY TWELVE THE FIRST QUARTER
OF TWENTY TWELVE HI IN FOR
CALIFORNIA SINGLE FAMILY HOUSING
RESIDENCES THE HOUSING
AFFORDABILITY INDEX WAS FIFTY
SIX PERCENT. WHICH MEANS THAT
56% OF FAMILIES COULD AFFORD A
MEDIAN PRICED HOME IN
CALIFORNIA. AND OBVIOUSLY THAT'S
GOING TO BE DIFFERENT IN LA
THAT'S GOING TO BE DIFFERENT SAN
FRANCISCO ON DIFFERENT RURAL
AREA. THAT'S CALIFORNIA HI AS A
WHOLE IT'S DOWN 220% HOW. AND
YOU KNOW WITH LACK OF SUPPLY A
LACK OF BUILDING- AND A LOT OF
FOLKS STAYING IN THEIR HOMES
BECAUSE OF LOW MORTGAGE RATES
RIGHT NOW- I WOULD EXPECT THAT
THE HOUSING AFFORDABILITY CRISIS
IS GOING TO STAY WHERE IT IS.
AND THIS PRESENTS A PARTICULAR
PROBLEM FOR FIRST TIME HOME
BUYERS WHO GENERALLY HAVE LESS-
MEANS FOR DOWN PAYMENTS AND- WHO
ARE ALREADY PRICED OUT AND WE'RE
TALKING ABOUT HIGHER PREMIUMS
AND- YOU KNOW AFFORDABILITY
CRISIS RIGHT NOW ANY ADDITIONAL
COST ON TOP OF THIS. IS GOING TO
BE PRICING OUT MORE POTENTIAL
HOME BUYERS HI WHO COULD BE
BUILDING WEALTH- I'M A SKIP PASS
THE SLIDE BECAUSE IT'S NOT IN
OUR GRAPH- WE MADE A SURVEY. FOR
OUR REALTORS LAST YEAR. WE'RE WE
ASKED ABOUT. RISK AND WE ASK DID
YOU REPRESENT ANY CLIENTS WHO
HAVE A WILDFIRE RISK AND WE HAD
A ABOUT EIGHTEEN HUNDRED
RESPONSES IN ABOUT NEARLY HALF
OF THOSE. RESPONDED YES- OF
THOSE THAT SAID YES MOST- YOU
KNOW ABOUT 80% OF THOSE FOLKS
HAD ISSUES. GETTING HOMEOWNERS
INSURANCE. THAT COVERS DAMAGE
DUE TO FIRE WHETHER THAT IS THE
COST WHETHER OR NOT IT WAS GOING
TO BE RENEWED- AND SO 80% I HAD
A PROBLEM WITH THAT. AND YOU
KNOW. HI I CAN'T SEE BILLS. IN
THERE ARE SO ABOUT 88% I HAD
DIFFICULTY OBTAINING INSURANCE
OF THOSE NEAR HALF. I 83% SAW AN
INCREASE IN PREMIUM ALMOST 60%
SAW CANCELLATION- SO THIS IS NOT
ONLY AFFECTING YOU KNOW- YOU
KNOW THE AFFORDABILITY OF
HOUSING BUT IT IT'S ALSO
AFFECTING THE MARKET HI AS WELL
. AND I BELIEVE THAT IS IT FOR
ME OH AND ONE MORE AT A NEARLY A
THIRD OF BUYERS DECIDED NOT TO
BUY- IN CERTAIN AREAS ACCORDING
TO OUR REALTORS IN THE SURVEY.
BECAUSE THEY HAD- DIFFICULTY
OBTAINING FIRE INSURANCE SO IT'S
A BARRIER AND- IT'S SOMETHING TO
BE AWARE THANK YOU. CAN KILL YOU
KNOW AND AGAIN AND IT WAS A
PRINTER BRING THE CONVERSATION
IN TERMS OF THE BUILDERS AND
WHAT'S HAPPENING AND THAT THE
HOUSING MARKET BECAUSE AGAIN
THAT'S AN ISSUE THAT WE'RE
TRYING TO TACKLE. ALMOST
SIMULTANEOUSLY WITH THEIR
INSURANCE CRISIS RIGHT AND SO
THANK YOU FOR THAT PERSPECTIVE
AND I KNOW WE HAVE ONE MORE
OPERATIVES HAVE BEEN WHO'S
JOINING US THROUGH ZOOM- BILL
EVANS I'M SO SORRY I KNOW YOU'VE
BEEN WAITING QUITE A BIT AND- SO
PLEASE TRY AND KEEP YOUR
COMMENTS AS CONCISE AS POSSIBLE
WE APPRECIATE IT THANK YOU AND
WELCOME. THANK YOU MADAM CHAIR
AND COMMITTEE MEMBERS- WOW WHAT
A WHAT AN AMAZING INVESTMENT OF
TIME THE CHIEF WAS WAS EXACTLY
RIGHT- I REPRESENTED OFFICE OF
THE LARGE FIRM- AND IN THE
FOOTHILLS OF WILDLAND URBAN
INTERFACE. CAN WE LIVE WITH THIS
AND HAVE BEEN LIVING WITH THIS
EVERY DAY- DID THE- THE WITH THE
WORLD AROUND WHAT WAS GOING ON
WITH INSURANCE USED TO BE. A FEW
YEARS AGO INSURANCE IS ONE OF
THE LAST THING YOU DID ON AFTER
PROCESS NOW IS ONE OF THE FIRST
THINGS YOU DO IS TO FIND AN
AREA. AND G. AND SEE THAT IT'S
AFFORDABLE WE'RE FINDING ON
TALKING TO LOCAL AGENTS OR
WRITING POLICIES IN. NEVADA
COUNTY THE UPPER PACHTER COUNTY
EL DORADO COUNTY THAT 8290% OF
WHAT'S BEING DONE IN OUR MARKET
UP HERE. IS A THE FAIR PLAN WITH
IT WITH A RAP. THAT IS A COUPLE
QUICK STORIES AND THEN WE'LL
MOVE ON- ONE OF OUR FRIENDS IT
JUST. GOT POLICY INCREASED THEY
HAVE A HOUSING PLACERVILLE. BUT
BASIC THREE BEDROOM TWO BATH
HOME BY NINETEEN HUNDRED SQUARE
FEET THEY JUST GOT RAISED. FROM
TWO THOUSAND TO FIFTY FIVE
HUNDRED. ON THEIR POLICY THIS IS
A TRADITIONAL INSURANCE POLICY
NOT A MEDICARE PLAN POLICY. I'M
LOOKING AT THE AFFORDABILITY OF
WHICH MIKE SPOKE ABOUT. YOU WERE
LOOKING AT ON THE TICKET TODAY'S
CURRENT RATE ABOUT SIX AND A.
QUARTER PERCENT. BUT SAID ABOUT
TEN THOUSAND DAHLE- AT. THE TEN
THOUSAND DOLLARS PURPOSE. FIVE
AND SO IN. RACE FOR THAT
PARTICULAR. IT WOULD HAVE THEIR
REPORTED. BUT FIVE. AND THE IS
AN AVERAGE. THAT WE MOVE UP A-
TOO AVERAGE OR ENTRY. WE COULD
BE LOOKING AT FORTY FIVE OF
COURSE OF NINETY THOUSAND DOLLAR
COST DIFFERENCE- AS RELATED TO
WHAT THEY CAN AFFORD THE
MORTGAGE PAYMENT WHAT THEY
QUALIFY FOR. ANOTHER APPOINTMENT
WITH THE CHIEF HAD MENTIONED
EARLIER. ONE OF MY GOOD FRIENDS
IS ALSO PART OF OUR INSURANCE
TASK FORCE- GLOUCESTER HOME SHE
HAD OVER A HUNDRED FEET OR
DEFENSIBLE SPACE. SHE HAD THE
PROPERTY WAS METICULOUS METAL
ROUGH WITH A FIRE HYDRANT TWO
ENTRANCES. AND EXITS ON HER
PROPERTY HOWEVER THE NEIGHBORING
PROPERTY- HAD NO. MITIGATION IT
WAS OVERGROWN YOUR BY BANDING
VEHICLES THAT PROPERTY BURNED SO
HOT. THAT HER AND HER NEIGHBORS
LOST THEIR HOMES BEFORE THE FIRE
DEPARTMENT COULD EVER SHOW UP.
SO TO MAKE IT TO ME IT'S VERY
REAL BECAUSE WE LIVE WITH THIS
EVERY DAY SO EDUCATION AND
ENGAGEMENT BUT- WHAT THE CHIEF
HAD SAID ENFORCEMENT. WE HAVE TO
HAVE THE ABILITY TO GET PEOPLE
TO UNDERSTAND THE VALUE OF FIRE
WIVES IN FIRE STATE COMMUNITIES-
I BELIEVE IS ONE OF THE YOU
KNOW. INSURANCE COMPANIES HAVE A
RIGHT TO MAKE A RETURN ON
INVESTMENT WE UNDERSTAND THAT.
BUT WE CAN DO MORE THE PEOPLE
WHO LIVE IN THESE AREAS WILL DO
MORE WE'RE WE'RE GUIDED AND WE
HAVE THE ASSISTANCE AS WELL AS
THE ENFORCEMENT. TO MAKE THE
PEOPLE WHO ARE NOT DOING. THE
RIGHT THING TO PROTECT
PROPERTIES. THOUGH THAT'S ALL. I
HAVE UNLESS YOU HAVE QUESTIONS.
I THANK YOU I'M I. WANT TO
UNDERSCORE AT THE END. YOU
SHARED ABOUT- HOMEOWNER WHO DID
EVERY POSSIBLE SIX HAVE DONE AND
TRYING OF DEFENSE. SPACE AND
EVERYTHING TO ENSURE THAT. THE
HOME SURVIVED AND IT'S THAT THAT
THE NEIGHBOR WHO ACTUALLY COST
UP. THE LOSS OF HOME SO I CAN'T
I WANT TO UNDERSCORE THE
IMPORTANCE OF TO ME COMMUNITY
HOME HEARTENING BECAUSE- WE NEED
THE ENTIRE COMMUNITY TO BE SAFE-
I REALLY JUST WANT TO THANK. ALL
OF YOU AYE I KNOW I'M GONNA TURN
IT OVER TO- SERGEANTS IF WE HAVE
CALLERS ARE NOT SOMETHING WE GOT
DISCONNECTED. AND I CANNOT ALLOW
COMMENTS BY- I THINK I'M JUST
GONNA ALLOW NAME CAN YOU CHECK
TO SEE HOW MANY. PEOPLE WE HAVE
IF ANY. ON THE TELECONFERENCE
CALL. ZERO OKAY I'M GONNA ASK
GOD THOSE HERE VERY BRIEFLY TO
IF THEY HAVE ANYBODY- IN THIS
ROOM ANY COMMENTS YOU WANTED TO
SAY. REALLY BRIEFLY THAT WOULD.
HELP OUT BUT AGAIN TO ALL OF YOU
THAT BEEN HERE IT IS AN
INCREDIBLE. UP INVESTMENT ON
THIS TIME THIS TIME REALLY HAS
GIVEN ME A BROAD PERSPECTIVE OF
OUT. OF YOU KNOW ALL ISSUES AND
I HOPE THAT ANYBODY THAT THAT
THAT'S LISTENING AT HOME AND ALL
OF YOU HERE HAVE TAKEN A LOT OF
WAY I KNOW I HAVE A- LOT OF
INFORMATION RIGHT NOW TO DISSECT
AND HAVE A MILLION QUESTIONS
UNFORTUNATELY TIME DOES NOT
ALLOW IT. BUT I KNOW FOR SOME OF
YOU THAT NEED TO GO I WANT
EXCUSE YOU IN CASE YOU NEED- YOU
HAVE OTHER COMMITMENTS. BUT I
WILL ALLOW- MEMBERS OF THE
PUBLIC TO MAKE COMMENTS VERY
BRIEFLY THANK YOU ALL OF YOU FOR
YOUR TIME AND YOU. ARE WELCOME
TO STEP AWAY FROM THE DESK THANK
YOU. SO WHAT TURN IT OVER TO
YOU- WE HAVE UP SOMEONE WISHING
TO SPEAK. AS PREVIOUS ACCOUNT
THANK YOU YEAH THANK YOU SENATOR
RUBIO AND- MEMBERS OF THE
COMMITTEE- MY NAME IS ROBERT
CORRAL I'M THE EXECUTIVE
DIRECTOR OF THE CONSUMER
FEDERATION OF CALIFORNIA- AND I
WAS AS A- VERY YOUNG COLLEGE
STUDENT IN NINETEEN EIGHTY EIGHT
ONE OF THE CANVASSERS FOR WHAT
WAS THEN CALLED VOTER REVOLT-
WHICH IS NOW. MORPHED INTO A
CONSUMER WATCHDOG- I JUST WANNA
PROVIDE A TINY BIT OF CONTEXT
BEYOND THAT WHICH MISTER
ROSENFIELD PROVIDED WHICH IS
HELPFUL SO CAN I ASK YOU TO KEEP
IT UNDER A MINUTE PLEASE. INCA
YOU CAN ASK THAT SURE. I'LL TRY
TO DO SO- THERE WERE FIVE
INITIATIVES ON THE BALLOT. TWO
OF WHICH WERE PUT ON BY THE
INSURANCE INDUSTRY AND I THINK
THE TRAILERS PUT A COUPLE
DIFFERENT VARIATIONS OF
SOMETHING ON THE BALLOT TO. SO
THE OBJECTIVE JUST YOU KNOW AND
SOME OF YOU WERE AROUND IT SO IF
YOU WEREN'T. WAS HAVOC IF YOU
MODERNIZE THOSE DOLLAR NUMBERS
IT DWARFS FOR EXAMPLE WHAT
LIBERAL LIFT SPENT ON PROP
TWENTY TWO OF THE TWO HUNDRED
MILLION SPACE. SO THERE'S A
CONTEXT THAT IT'S THAT'S THAT'S
IMPORTANT- I THINK THERE'S A
SUBTEXT TO THIS HEARING THAT
GIVES ME PAUSE. WHICH IS THE
NOTION THAT THERE'S GONNA BE
SOME SORT OF OPENING UP OF ONE
OF THREE TO WHAT I WOULD
INTERPRET AS A POTENTIAL FULL
FRONTAL ATTACK- I NOTED WHERE.
MISTER DON MOYER IS A WORTHY
ADVERSARY AND FORMER INSURANCE
INDUSTRY LOBBYIST FOR MANY YEARS
VERY CASUALLY JUST SAID IF THEY
OFFER 40% GIVE IT ALL. THE
DEPARTMENT IS PROCESSING RATE
INCREASES. AT A REALLY RAPID
RATE- AND I THINK. THIS NOTION
THAT YOU CAN GET STATISTICS TO
LIVE I THINK DOESN'T ISN'T BORNE
OUT WHEN YOU LOOK AT ANY I SEE
DATA. WHEN YOU LOOK AT
DEPARTMENT OF INSURANCE STATE
WHEN YOU LOOK AT ALL THE DATA.
AVAILABLE I AS SOMEONE WHO WORKS
AT ALMOST A HALF A DOZEN YEARS
AT THE DEPARTMENT OF INSURANCE I
CAN FINALLY TELL YOU. THE RATE
FILING PROCESS- WHAT OFTEN
HAPPENS IS A RATE FAMILY COMES
IN. IN MANY CASES IT IS
INADEQUATE OR DOESN'T ANSWER
BASIC QUESTIONS OR IS
INCOMPLETE. THE DEPARTMENT THEN
PROCESSES THAT AND ASKS IF. IN
SOME CASES IT'S SHORT MEDIUM OR
LONG LIST OF QUESTIONS. AND THEN
THEY WAIT. AND THEY WAIT AND
THEY WAIT AND THEY WAIT. THEN
THE INSURANCE INDUSTRY TURNS
AROUND AND BLAMES THE
DEPARTMENT. FOR WHAT'S TAKING
THE SO MANY JUST ARE WRAPPING IT
UP THANK YOU SO SORRY WE WOULD
URGE YOU I AGREE WITH THE- OF.
FIRE CHIEF ON ENFORCEMENT OF
DEFENSIBLE SPACE I THINK THAT
NEEDS TO BE STEPPED UP. I THINK
THERE'S A DISCONNECT ON FIRE
BETWEEN LOCAL GOVERNMENTS SOME
OF THE LOCAL. DECISIONS THAT ARE
MADE THERE AND WHO PAYS FOR THE
EXTERNALITIES. WE ORDERED YOU
ALL NOT TO FUNDAMENTALLY ATTACK
PROP. ONE OF THREE- IN THIS
PROCESS THANK YOU. THEY YOU
ANYONE. FISHING TO SPEAK. OKAY
NO ONE ON THE LINE. OKAY WHAT WE
WILL- THANK YOU TO ALL OF YOU
THAT ARE HERE RIGHT NOW FOR ME
IT'S A WELCOME AND AFTERNOON
WELL SPENT IT'S A LOT OF
INFORMATION AND I. YOU KNOW AND
I HER CHILD THE LAST SPEAKER IT
FEELS LIKE IT'S SOUTH SOMEWHAT
OF A THE TACKLE PROBLEM ALONG
ONE ALL THREE AND IT IS
SOMETHING THAT IS. HERE TO STAY
BUT IT'S JUST A MATTER OF.
SEEING WHERE WE CAN YOU KNOW SIT
DOWN AND EXPLORE OPTIONS ON HOW
DO WE MOVE FORWARD IN A WAY THAT
RESPECTS WON ALL THREE BUT ALSO
TAKES INTO CONSIDERATION ALL
THE- THE NEW OF FACTORS THAT
WERE NOT HERE. IN NINETEEN
EIGHTY EIGHT SO I YOU KNOW I
UNDERSTAND THE PASSION I'VE HAD
CONVERSATIONS WITH HARVEY AS
WELL AND- AND SO AGAIN IT'S NOT
ABOUT RIGHT OR WRONG IT'S ABOUT
HOW DO WE MOVE FORWARD FROM HERE
AND THERE IS A NEED THERE IS A-
SERIOUS CONCERNS ARE AS- ONE OF
THE SPEAKER STATED. A HOMEOWNER
WENT FROM TWO THOUSAND DOLLARS
TO FIFTY FIVE HUNDRED AND THAT'S
JUST ASSUMING PEOPLE HAVE
DISPOSABLE. INCOME HANGING
AROUND AND OF COURSE THAT
TRICKLES DOWN TO THE QUALITY OF
LIFE FOR THE FAMILY AND- YOU
KNOW THEIR CHILDREN AND THERE'S
SO MANY THINGS THAT HAPPEN AS A
RESULT OF SO. I JUST WANTED TO
HAVE A REALLY COMPREHENSIVE
HEARING WHERE WE CAN KIND OF
CONNECT ALL THE DOTS YOU KNOW I
SPOKE ABOUT JUST EVEN SPEAKING
ABOUT FIREFIGHTERS YOU KNOW AND
WHAT THEY HAVE TO DEAL WITH. SO
THERE'S A LOT OF PIECES HERE
THAT WE'VE BEEN EXPLORING AND I
HOPE THAT AGAIN THAT. WE JUST
YOU KNOW TO CREATIVELY THINK
OUTSIDE THE BOX AND SEE IF YOU
HAVE ANY IDEAS WERE ALWAYS OPEN
TO. SUGGESTIONS AND
CONSIDERATIONS AND WE WILL.
CONTINUE THESE OVERSIGHT
HEARINGS TO CONTINUE TO GIVE
PEOPLE A VOICE AND THE
OPPORTUNITY TO. TO SHARE THEIR
CONCERNS HELP THANK YOU EVERY
SINGLE MEMBER WHO. CAME UP HERE
TO TESTIFY AND TAKE THE TIME TO
IT TO EDUCATE AS AGAIN WE'RE
NOT. ALL EXPERTS IN EVERY SINGLE
TOPIC BUT THIS IS REALLY
INFORMATIVE AND CELL. THANK YOU
I AND I HOPE YOU HAVE A LOVELY
DAY AND THIS CONCLUDES. OUR
HEARING HAVE A GOOD DAY.