GOOD. AFTERNOON THE SENATE
COMMITTEE AND INSURANCE WILL NOW
COME TO ORDER. THANK YOU,
EVERYONE THAT IS HERE IN PERSON
JOINING US TODAY. IT'S BEEN A
LITTLE WHILE AND HAPPY NEW YEARS
TO ALL THOSE THAT I HAVEN'T
SEEN. AH SO TODAY FOR TODAY'S
HEARING, WE ARE GOING TO BE
HEARING FROM THE HONORABLE
RICARDO LARA, OUR INSURANCE
COMMISSIONER PRIOR TO TAKING ANY
PUBLIC COMMENTS. WE WILL HEAR
FIRST FROM THE COMMISSIONER AND
WHEN THEY WILL TAKE PUBLIC
COMMENTS THAT REALLY JUST
ADDRESS THE TOPICS THAT ARE
BEING DISCUSSED TODAY. CURLING
THE INSURANCE CRISIS IN
CALIFORNIA IS SOMETHING THAT'S
ON THE MINDS OF A LOT OF
CALIFORNIANS AND A LOT OF
CONSUMERS. SO TODAY WE'RE HERE
TO ENSURE THAT WE CONTINUE THE
DIALOGUE AND MAKE SURE THAT WE
ARE IN COMMUNICATION WITH ALL
STAKEHOLDERS BECAUSE WE KNOW
THAT THERE'S A LOT TO BE DONE
AND A LOT OF DISCUSSIONS TO BE
HAD. SO I'M VERY THANKFUL THAT
THE INSURANCE COMMISSIONER IS
HERE TODAY TO SHARE SOME OF THE
UPDATES. AND SO ONCE AGAIN, WE
KNOW THAT, UM CALIFORNIA CAN BE
A TEST CASE. CONSIDERING THAT,
UM, CLIMATE CHANGE HAS BEEN
INITIAL WORLDWIDE. WE DO HAVE A
LOT OF WILDFIRES, FLIGHTS AND
OTHER DISASTERS THAT ARE
CREATING ECONOMIC SHOCKWAVES
ACROSS OUR STATE AND OUR
COUNTRY. FOR THAT MATTER. THE
PROPOSITION 103 WAS INTENDED TO
PROTECT CONSUMERS AND THE 19
EIGHTIES. MANY HAVE FOUND IT,
IT'S FALLEN SHORT OF ITS ANTENNA
GOALS, AND WE NEED TO ADDRESS IT
AND WE NEED TO DO SOMETHING TO
CHANGE. WHAT'S HAPPENING SINCE
WE KNOW THAT A LOT OF OUR
CONSUMERS ARE BEING LAUGHED
WITHOUT INSURANCE AND JUST
STRESS AND SOME OF THEM EVEN
LOSING THEIR HOMES. HOME BUYERS
AND HOMEOWNERS ASSOCIATIONS HAVE
FOUND THEIR INSURANCE RATES AND
WHILE IN INTERFACE HAVE
EXPONENTIALLY AH, GROWN OVER THE
COURSE OF A FEW YEARS DUE TO
LIMIT AND THE ABILITY TO
EFFECTIVELY USE AVAILABLE
TECHNOLOGY AND CALCULATING RATES
, THE LACE AND ROADBLOCKS IN THE
RATE MAKING PROCESS AND
HARDENING EFFORTS THAT ARE NOT
BEING ACCOUNTED FOR THE
INSURANCE RATE SETTING PROCESS
DUE TO THESE FACTORS IN
SEPTEMBER, 2023 GOVERNOR GAVIN
NEWSOM ISSUED EXECUTIVE
EXECUTIVE ORDER AND 139, WHICH
BIRCH INSURANCE COMMISSIONER
LADA TO TAKE IMMEDIATE ACTION TO
ADDRESS THIS CURRENT CRISIS.
EXPAND COVERAGE. OPTIONS FOR
CONSUMERS, PROTECT CONSUMERS AND
KEEP PLANTS AFFORDABLE. AH HERE
IN THE ROOM WITH US, WE HAVE
LUCY WANG FROM THE INSURANCE
COMMISSIONERS OFFICE. UM I'VE
SEEN MICHAEL MARTINEZ AS WELL
WITH THE INSURANCE COMMISSIONER
SITTING OUT AND THE AUDIENCE AND
OF COURSE WE WITNESSED TODAY IS
GOING TO BE APPEARING VIA ZOOM
FROM LOS ANGELES. SO I WANT TO
THANK THE HONORABLE LICCARDO
LARA, WHO WILL BE JOINING US IN
A FEW MOMENTS. UM WELCOME
INSURANCE COMMISSIONER. WELCOME
IT'S GREAT TO BE HERE. THANK YOU
SO MUCH FOR TAKING THE TIME AND
SO WE REALLY WANT TO OPEN THIS
UP FOR YOU TO SHARE WITH US SOME
OF THE UPDATES BASED ON THAT
EXECUTIVE ORDER AND SOME OF THE
CONVERSATIONS WE'VE HAD
THROUGHOUT LAST YEAR AND LET ME
JUST START BY SAYING HOW
THANKFUL I AM. WE SPENT A LOT OF
YEAR I'M SORRY. A LOT OF TIME
LAST YEAR HANGING OUT TOGETHER
SOMETIMES ALMOST 24 HOURS A DAY,
TRYING TO FIGURE OUT THIS
INSURANCE CRISIS AND SO ONLY YOU
AND I KNOW HOW MUCH EFFORT WENT
INTO THIS, BUT I'LL TURN IT OVER
TO YOU. AND WHENEVER YOU'RE
READY, YOU MAY BEGIN. THANK YOU.
THANK YOU. THANK YOU. GOOD
AFTERNOON, CHAIRWOMAN RUBIO
CANYON LEVEL AND IT'S GREAT TO
SEE YOU, OF COURSE, ARE VICE
CHAIR NGUYEN AND COMMITTEE
MEMBERS AND THANK YOU FOR
INVITING ME HERE TODAY WE HAVE A
PRESENTATION. UH THAT'S WE'LL
HAVE QUICK PRESENTATION WITH
SOME FLIES JUST SO THAT THE
MEMBERS OF THE AUDIENCE CAN GET
A BETTER PICTURE OF WHAT'S
WHAT'S HAPPENING. UH AND REALLY,
WHAT YOU'LL SEE IS THAT OUR
INSURANCE IS AT A CROSSROAD.
THOSE ARE MARKET. AS YOU WELL
KNOW, CALIFORNIA IS THAT AT THIS
MEANINGFUL CROSSROADS AND FOR
MANY CALIFORNIA. THIS THIS IS AN
INSURANCE EMERGENCY. AS YOU WELL
POINTED OUT, MADAM CHAIR. WE ARE
ALL HEARING EVERY DAY FROM
PEOPLE WHO ARE PAYING MORE FOR
HOME INSURANCE IF THAT'S EVEN IF
THEY CAN FIND A COMPANY THAT
WILL WRITE THEM A POLICY AND
THIS IS REALLY A DIRECT RESULT
OF A GROWING CLIMATE THREATS AS
YOU MENTIONED HISTORIC INFLATION
AND OUTDATED REGULATIONS AS THE
STATE INSURANCE REGULATOR. MY
FOCUS, AS YOU KNOW, IS REALLY
PROTECTING CONSUMERS, WHICH
INCLUDES SAFEGUARDING A ROBUST
AND DRIVING INSURANCE MARKET,
AND OUR MARKET IS UNDER
UNPRECEDENTED STRESS. UNLIKE
ANYTHING THAT WE'VE EXPERIENCED
IN THE MORE THAN 35 YEARS SINCE
THE VOTERS ESTABLISHED OUR
CURRENT SYSTEM OF INSURANCE
REGULATION. LAST SEPTEMBER, I
ANNOUNCED MY SUSTAINABLE
INSURANCE STRATEGY WHICH YOU ARE
VERY FAMILIAR WITH, MADAME TRY
AND THANK YOU FOR WORKING WITH
US AND YOUR STAFF TO REALLY
GETTING SOME OF THESE, UH,
IMPORTANT REFORMS IN THIS PLAN,
WHICH, AS YOU KNOW, IS THE
LARGEST INSURANCE REFORM SINCE
THE VOTERS PASSED PROPOSITION
103. THERE IS NO QUESTION THAT
THE RISKS THAT EXISTED WHEN
VOTERS PASSED 103 ARE NOT THE
SAME REX WE ARE FACING TODAY.
DECADES OF GLOBAL WARMING ARE
COLLIDING WITH OUR STATE'S
GROWING POPULATION TO PUT IT
DIRECTLY AND REALLY PUTTING
PEOPLE IN DIRECTLY IN HARM'S WAY
, WHILE WE ARE MAKING MASSIVE
CHANGES TO HOW WE BUILD BUILDING
SMARTER AND BEING PROACTIVELY
PROACTIVE LEAD TO PREPARE FOR
WILDFIRES. WE MUST ALSO CHANGE
HOW WE REGULATE THIS INSURANCE
INDUSTRY OF OURS. TO PUT IT
SIMPLY. WE NEED NEW TOOLS TO
DEAL WITH THESE NEW PROBLEMS.
THE INSURANCE MARKET WE ARE
DEALING WITH TODAY NECESSITATES
URGENT MEASURES THAT AS YOU WELL
MENTIONED GOVERNOR NEWSOM ALSO
RECOGNIZES. SF FOURTH IN HIS
EXECUTIVE ORDER ISSUED ON
SEPTEMBER 21ST THE GOVERNOR'S
ORDER SUPPORTS SWIFT REGULATION
REGULATORY ACTION BY MY
DEPARTMENT TO STRENGTHEN AND
STABILIZE CALIFORNIA'S INSURANCE
MARKETPLACE STRATEGY. SORRY
INSURANCE COMMISSIONER I'M SO
SORRY I NOTICED THAT OUR VICE
TOO, I THINK JUST ARRIVED AND I
WANT TO MAKE SURE THAT THERE'S A
MEMBER THAT WANTED TO MAKE AN
OPENING COMMENT BEFORE WE MOVE
FORWARD. SO MY APOLOGIES FOR
INTERRUPTING YOU, BUT IT'S OVER
TO YOU OKAY? DO YOU WANT TO MAKE
AN OPENING REMARKS? MY APOLOGIES
WILL TAKE A FEW MINUTES MINUTES
HERE. THANK YOU SO MUCH. I WANT
TO THANK CHAIR RUBIO FOR ALL HER
TIRELESS WORK IN THIS ARENA.
I'VE HAD THE PLEASURE OF BEING
ABLE TO WORK WITH HER AS WELL AS
COMMISSIONER LOTTA ON THIS ISSUE
REPRESENTING SENATE-DISTRICT FOR
IN SOME OF THE HIGH WILDFIRE
AREAS OF CALIFORNIA. UM ACROSS
CALIFORNIA AS YOU MENTIONED THE
COST OF HOMEOWNERS INSURANCE HAS
FURTHER FUELED THE HOUSING
AFFORDABILITY CRISIS. AND WHILE
MANY HOUSEHOLDS IN CALIFORNIA
MAY STILL ENJOY SOME OF THE MOST
LOWEST, SOME OF THE LOWEST
HOMEOWNERS INSURANCE RATES IN
THE NATION, THE ASTRONOMICAL
INSURANCE COSTS INCREASES FOR
RESIDENTS FOR BUSINESSES AND
PUBLIC SERVICE AGENCIES IN FIRE
RISK AREAS HAS GROWN POTENTIALLY
HAS HAS BEEN GROWING HADN'T HAS
THE POTENTIAL TO HAVE A
DETRIMENTAL IMPACT TO THE WELL
BEING OF OUR STATE, LIVING
THROUGH THE REALITIES, DANGERS
AND IMPACTS THAT COME WITH
EXTREME WEATHER AND WILDFIRE.
DISASTERS IS THE TOP ISSUE OF
MINE AND MY CONSTITUENTS SHARE
IN THEIR CONCERNS WITH ME ACROSS
THE DISTRICT. I KNOW THAT THESE
REALITIES ARE REAL BECAUSE I
HAVE EXPERIENCED THEM FIRSTHAND.
I AM BLESSED TO HAVE MY FOREVER
HOME IN AMADOR COUNTY AND
SOMETHING THAT I WAS I WASN'T
PREPARED FOR WHEN I FOUND MY
HOME WAS THE CHALLENGE THAT
WOULD BE FACING FINDING
HOMEOWNERS INSURANCE. LIKE MANY
OF MY CONSTITUENTS, THE
CALIFORNIA FAIR PLAN IS THE ONLY
INSURANCE OPTION THAT I HAVE
AVAILABLE FOR MY HOME. AND LET
ME TELL YOU THAT IT SURE DOES
NOT FEEL FAIR TO ONLY HAVE ONE
OPTION AND THE COST IS FAR FROM
AFFORDABLE FOR MOST OF MY
CONSTITUENTS WHO LIVE ON FIXED
INCOMES. ALSO FOR THOSE WHO ARE
MIDDLE CLASS OR MIDDLE INCOME,
IT IS ALSO UNAFFORDABLE. RECENT
REPORTS INDICATE THAT THE FAIR
PLAN IS RECEIVING OVER 1000
APPLICATIONS A DAY, A RAPID
INCREASE THAT DEMONSTRATES THE
NEED FOR IMMEDIATE AND BOLD
ACTION TO CHANGE COURSE. THERE
ARE SOME AREAS IN MY DISTRICT
SUCH AS TRUCKEE AND IN THE TAHOE
BASIN AND TUOLUMNE COUNTY AREA
THAT HAVE BILLIONS OF DOLLARS OF
FAIR PLAN SATURATION WHERE ONE
FIRE COULD DEVASTATE THE ENTIRE
PROGRAM. THE ACTIONS TAKEN SO
FAR, INCLUDING THE RECENTLY
ANNOUNCED PACKAGE OF EXECUTIVE
ORDERS ISSUED BY GOVERNOR AND
COMMITTEE AND OUR COMMISSIONER,
REPRESENTING ROBUST REFORMS,
SUPPORTED BY A NUMBER OF
STAKEHOLDERS ARE AN IMPORTANT
STARTING POINT. BUT THE WORK TO
END THIS CRISIS IS FAR FROM OVER
. AND I WANT TO THANK YOU FOR
BEING HERE TODAY BECAUSE I KNOW
THAT THE CONVERSATION IS FRONT
AND CENTER WITH YOU,
COMMISSIONER. EVERY SINGLE DAY.
MY OFFICE IS CONTACTED BY
UPWARDS OF A DOZEN CONSTITUENTS
WHO ARE FEARFUL OF LOSING THEIR
HOMES THREATENED DUE TO NOT
HAVING ACCESS TO PROPERTY
INSURANCE THAT THEY CAN AFFORD.
PREMIUMS ARE JUMPING FROM $1200
A YEAR ANNUALLY TO OVER 12,000
TO 14,000 ANNUALLY FOR MODEST
MIDDLE INCOME HOMES. THIS IS NOT
A SUSTAINABLE MODEL. WE ARE AT A
CRISIS POINT, AND WE NEED THAT
RELIEF RIGHT NOW. I WOULD LIKE
TO THANK YOU, COMMISSIONER LARA
FOR BEING RESPONSIVE, BEING
RESPONSIVE AND ACCESSIBLE TO ME
AND MY STAFF. AS WE HAVE REACHED
OUT FOR ASSISTANCE, SUCH AS YOUR
RECENT ACTIONS IN RESPONDING TO
THE FAIR PLAN, APPLICATION
PROCESSING DELAYS MY
CONSTITUENTS HAVE BEEN FACING
THESE AND THANK YOU FOR BEING
RESPONSIVE. YOUR ACTIONS IN
ISSUING GUIDANCE ON BACKDATED
FAIR PLAN POLICY INSURANCE
STATES IS ALSO GREATLY
APPRECIATED. TO SUM IT UP YOUR
ODD? UM UM BUD ZEMAN OFFICES ON
SPEED DIAL WITH MY TEAM AS WE
WORK DAILY TO RESPOND TO
CONSTITUENTS WHO NEED THAT
ASSISTANCE TODAY I AM EAGER TO
DETERMINE THE TIMELINES THAT ARE
MORE ABOUT DETAILS OF THE
IMPLEMENTATION OF THE
SUSTAINABLE INSURANCE STRATEGY.
THANK YOU AGAIN FOR YOUR
PARTICIPATION, AND I LOOK
FORWARD TO YOUR PRESENTATION AND
FOLLOW UP QUESTIONS. THANK YOU,
SENATOR. WE JUST HAD OUR
ESTEEMED COLLEAGUE JOIN US AS
WELL. HE'S GOING TO MAKE BRIEF
REMARKS. YOU MAY PROCEED. THANK
YOU, MADAM CHAIR. I TOO JUST FOR
TIME'S SAKE. I WOULD JUST, UH
PROBABLY BE REPEATING WHAT SAYS
SENATOR ALVARADO KILL? JUST SAID
I CONCUR WITH HER REMARKS IN,
UH, REALLY APPRECIATE. THE
COMMISSIONER BEING HERE TODAY
AND TALKING MORE ABOUT YOU KNOW
HOW WE ACCELERATE THIS? OR AT
LEAST KEEP IT ON THE PERFECT
TIMELINE? THANK YOU. THANK YOU.
AND WITH THAT INSURANCE
COMMISSIONER OR APOLOGIES, AND
YOU MAY CONTINUE WITH YOUR
PRESENTATION. THANK YOU. THANK
YOU. I APPRECIATE, UH, BOTH
CENTER OF R O KILL, UH AND
SENATOR DODD FURTHER FURTHER
WORD, SO LET'S LET'S GET INTO
IT. AND JUST TO SELL YOU THAT
THE STRATEGY IS REALLY OUR
STRATEGY IS REALLY BASED ON A
THOROUGH ASSESSMENT OF TODAY'S
INSURANCE LANDSCAPE WITH ACTUAL
INPUT FROM WILDFIRE SURVIVORS
FROM OUR RANCHO COMMUNITY OR
FARMERS ARE SUPPORTIVE. HOUSING
GROUPS ARE REALTORS HOMEOWNERS.
CONDO ASSOCIATIONS, NEW HOME
BUILDERS AND OTHER INSURANCE
CONSUMERS THAT ARE MOST
EFFECTIVE. NO OTHER DEPARTMENT
IN THE HISTORY HAS BEEN SUCH AN
A ROBUST OUTREACH TO REALLY TRY
TO GET TO ALL THE INSURANCE
CONSUMERS IN CALIFORNIA TO GET
FIRST HAND INFORMATION AND
NOBODY ELSE HAS EVER DONE THIS
WORK. SO KUDOS TO MY STAFF FOR
THE WORK THAT WE'VE DONE ON THE
OTHER SIDE ARE THOSE WHO ARE
GOING TO DEFEND THIS BROKEN
STATUS QUO AT OUR COST. EVEN TO
THE POINT WHERE INSURANCE IS NOT
IS NOT JUST NO LONGER AVAILABLE
AS WE ARE HEARING FROM OUR
SENATORS, BUT YOU KNOW IT'S NOT
EVEN NOT JUST GOING TO BE
AVAILABLE, BUT UNAFFORDABLE AS
IT IS ALREADY AND I REFUSE TO BE
PRESSURED BY ENTRENCHED GROUPS
PUTTING THEIR INTERESTS AND
THEIR FINANCIAL STABILITY AHEAD
OF THE PUBLIC'S BENEFIT. SO
LET'S GET INTO IT. UM IN THE
COMING MONTHS. UH I WILL BE
IMPLEMENTING THE LAST THING
CHANGES THAT WILL MAKE
CALIFORNIANS SAFER AND THROUGH
AND STRONGER AND MORE
SUSTAINABLE THROUGH OUR
INSURANCE MARKET. AS WE
DISCUSSED IN GREAT DETAIL IN MY
TESTIMONY. MY STRATEGY REALLY
CONSIST OF THE FOLLOWING
COMPONENTS. WE'RE GONNA
STREAMLINE THE RATE APPLICATION
AND APPROVAL PROCESS TO WE'RE
GONNA BE INTRODUCING A RISK
MANAGEMENT TOOL THAT RECOGNIZES
CATASTROPHIC MODELING AND
CALIFORNIA ONLY NET COST OF
REINSURANCE. WITH THE COMMITMENT
FROM INSURANCE COMPANIES TO
WRITE AT LEAST 85% OF HOMES AND
BUSINESSES IN DISTRESSED AREAS
ESSENTIALLY, AREAS ARE
PRIORITIZING CENTER ALVARADO'S
GILLES DISTRICT AND SENATOR DODD
AND, OF COURSE, STRENGTHENING
AND MARK AND MODERNIZING OUR
FAIR PLAN THE CHANGES TO
CALIFORNIA'S MARKET HAVE BEEN
SUDDEN, BUT ARE DECADES IN THE
MAKING OVER THE LAST PAST 12
MONTHS, SEVEN OF THE 12
INSURANCE GROUPS IN CALIFORNIA
HAVE EITHER PAUSED OR RESTRICTED
NEW HOMEOWNERS BUSINESS IN THE
PAST YEAR. THESE INSURANCE
GROUPS ROUGHLY REPRESENT 85% OF
THE MARKETPLACE, SO THESE
ACTIONS ARE HAVING A SIGNIFICANT
IMPACT ACROSS OUR STATE. AT THE
SAME TIME, INSURANCE COMPANIES
HAVE INCREASED THEIR RATES UNDER
OUR EXISTING REGULATIONS SO OVER
THE PAST YEAR MAJOR COMPANIES
INCLUDING STATE FARM, ALLSTATE,
AND FARMERS HAVE APPLIED AND
RECEIVED SIGNIFICANT RATE
INCREASES. AS YOU'VE SEEN
PUBLICLY REPORTED IN THE MEDIA.
UNDER EXISTING LAW INSURANCE
COMPANY RATES MUST BE ADEQUATE
TO PAY FUTURE CLAIMS WHILE
COVERING EXPENSES AND ALLOWING
FOR A REASONABLE RATE OF RETURN.
MY DEPARTMENT FOLLOWS THE RIGHT
REVIEW FORMULA THAT PUTS CLEAR
LIMITS ON PROFIT TAKING.
EXECUTIVE PAY AND ADVERTISING
EXPENSES WHILE ALLOWING
INSURANCE COMPANIES TO SET
JUSTIFIED RATE APPROVALS TO
COVER THEIR FUTURE LOSSES. YET
EVEN WITH THESE RATE INCREASES,
IT'S IMPORTANT TO SAY HE SURE
IS. COMPANIES ARE STILL ARE NOT
WRITING MORE POLICIES. THERE IS
NO REQUIREMENT UNDER PROPOSITION
103 FOR INSURANCE COMPANIES TO
WRITE POLICIES. THIS IS A
LIMITATION THAT WAS ALSO
ENFORCED IN COURT AGAINST FORMER
INSURANCE COMMISSIONER GARAMENDI
. I SAY THIS BECAUSE MANY FOLKS
ARE GOING TO SAY THAT WE CAN
JUST, UM EITHER FORCED THEM TO
WRITE POLICIES OR PASSED
LEGISLATION TO HAVE THEM WRITE
POLICIES. UH THIS INVITATION WAS
ALREADY ENFORCED IN COURT
AGAINST INSURANCE COMMISSIONER
GARAMENDI IN ESSENTIALLY LOOKING
AT OUR UNDERWRITING GUIDELINES.
BUT LET ME UNDERSCORE THIS POINT
UNDER OUR EXISTING REGULATIONS,
CONSUMERS ARE PAYING MORE WITH
NO PROMISE THAT THEY WILL HAVE A
COMPETITIVE MARKET IN YOUR THE
YEARS AHEAD. INSURANCE COMPANIES
INTERVENERS AND RED AND THE
REGULATOR SHARE THIS
RESPONSIBILITY IN 2023, THE
DEPARTMENT RECEIVED OVER 504
APPLICATIONS FOR RATE INCREASES
AND APPROVED 158 OF THESE
APPLICATIONS. ONE ORGANIZATION
INTERVENED IN 18 OF THESE
APPLICATIONS. ASIANS AND THE
DEPARTMENT IS MEETING ITS
RESPONSIBILITY UNDER THE CURRENT
REGULATORY STRUCTURE, BUT THAT'S
NOT ENOUGH TO ADDRESS THE
CURRENT INSURANCE MARKET CRISIS
DECISIONS. THAT WERE KICKED DOWN
THE ROAD CAN NO LONGER WAIT. WE
ARE AT ESSENTIALLY AT THE END OF
THE ROAD. SO LET'S TALK ABOUT
THIS GROWING FAIR PLAN. THERE IS
ANOTHER COST OF OUR SHRINKING
MARKET. THE INSURANCE COMPANY
ACTIONS HAVE REALLY PUSHED MORE
CALIFORNIANS TO THE FAIR PLAN,
WHICH HAS BECOME THE ONLY OPTION
THAT SENATOR ALVARADO GIL WAS
SAYING EARLIER INSTEAD OF THE
LAST OPTION. SO THE FAIR PLAN
HAS GROWN 20% THIS YEAR ALONE
NOW AT MORE THAN 330,000
RESIDENTIAL POLICIES. FOR MOST,
THE FAIR PLAN IS VERY LIMITED IN
COVERAGE AT A HIGHER COST. IT
CONTRIBUTES TO OUR PROBLEM OF
UNDER INSURANCE, LEAVING PEOPLE
AT A GREATER RISK OF PAYING OUT
OF POCKET IN A DISASTER. AND A
GROWING FAIR PLAN POSES A
PROBLEM FOR ALL CALIFORNIANS,
EVEN IF THEY'VE NEVER EVEN HEARD
OF THE FAIR PLAN, SIMPLY PUT,
INCREASING THE NUMBER OF
POLICIES IN THE FAIR PLAN
THREATENS THE SOLVENCY OF OUR
ENTIRE VOLUNTARY INSURANCE
MARKET BY LAW IF THE FAIR PLAN
EXPERIENCES A MASSIVE LOSS AND
CANNOT PAY ITS CLAIMS INSURANCE
COMPANIES AROUND THE HOOK FOR
THE UNPAID FAIR PLAN LOSSES, BUT
THIS ASSESSMENT ON INSURANCE
COMPANIES HAVE TO SAY HASN'T
HAPPENED IN NEARLY 30 YEARS.
IT'S THE UNCERTAINTY OF WHAT'S
GOING TO HAPPEN IN OUR EVER
CHANGING MARKET THAT REALLY IS
DRIVING INSURANCE COMPANIES
FURTHER LIMIT COVERAGE TO
CALIFORNIANS HAD A GREATER FOR
CALIFORNIANS THAT ARE AT GREATER
RISK TO WILDFIRES. SO THIS
ANIMOSITY THAT EXISTS GIVEN THE
UNCERTAINTY OF THE FUTURE IS
REALLY PUTTING OUR OVERALL
MARKET IN PERIL. THIS IS WHY MY
STRATEGY FOCUSES ON INCREASING
INSURANCE AVAILABILITY, WHILE AT
THE SAME TIME REDUCING THE
PRESSURE ON A GROWING FAIR PLAN
AND ON CALIFORNIA CONSUMERS, SO
WE HAVE TO REVERSE THIS TREND OF
A GROWING FAIR PLAN. IF WE'RE
GONNA GO AND WE'RE GOING TO
SAFEGUARD THE STATE'S INSURANCE
MARKET AS A WHOLE. SO ALL THE
COMPONENTS OF MY STRATEGY ARE
REALLY A RESULT OF EXAMINING THE
CURRENT REGULATORY STRUCTURE AND
ACKNOWLEDGING THAT THE
CHALLENGES OF ADDRESSING THE
CURRENT MARKET CRISIS IS REALLY
GIVEN THAT IT'S GIVEN PRESENT
DAY GIVEN THE PRISON TAKE
CONSTRAINTS THAT WE'VE NEVER HAD
BEFORE, SO THE GOAL OF MY
STRATEGY IS TO STRENGTHEN AND
IMPROVE OUR CURRENT REGULATORY
REGULATIONS TO MEET OUR PRESENT
NEEDS. THE CHANGES THAT I'M
PROPOSING ARE REALLY
TRANSFORMATIVE, AND THE
DEPARTMENT IS WORKING UNDER AN
AMBITIOUS TIMELINE. AS YOU KNOW,
MADAM CHAIR, WHICH ALLOWS US FOR
PUBLIC INPUT AND TRANSPARENCY
AND ALLOWS FOR LITTLE ROOM FOR
ERROR. NOW, LET ME I WANT TO
DISCUSS THE COMPONENTS OF MY
STRATEGY AND MORE DETAIL,
STARTING WITH THE RATE
APPLICATION PROCESS, WHICH I'M
HER. I'M SURE YOU ALL HAVE HEARD
FROM THE INDUSTRY. SO CALIFORNIA
LAW IS CLEAR. INSURANCE
COMPANIES ARE FREE TO PROPOSED
RATES AT ANY LEVEL. THERE IS NO
MAXIMUM MY DEPARTMENT RATE
REVIEWS IS THE PUBLIC CHECK ON
THESE RATES, AND WE THOROUGHLY
REVIEW EACH OF THE EACH AND
EVERY RATE FILING TO MAKE SURE
THEY ARE THAT ARE COMPLAINTS
THAT ARE COMPLIANT WITH OUR LAWS
THAT ARE JUSTIFIED AND THAT
CONSUMERS GET THE BEST VALUE FOR
THEIR MONEY. AND YES, THE PUBLIC
IS GRANTED A ROLE TO INTERVENE
IN THE REVIEW OF THESE RATE
FILINGS. THE REALITY IS THAT
INTERVENTIONS ONLY TAKE IN A
HANDFUL OF CASES EACH YEAR AND
PRIMARILY BY ONE ORGANIZATION
INTERVENTIONS DELAY THE RATE
REVIEW PROCESS AND OVER THE
YEARS, ONE ORGANIZATION
INTERVENE AND 18 RATE
APPLICATIONS SIGNING OFF ON THE
RATE HIKES WHILE SIMULTANEOUSLY
RECEIVING FEES FOR DOING SO. THE
SAME ORGANIZATION SUPPORTS
VARIOUS DEPARTMENT ACTIVITIES
AND RECEIVED COMPENSATION OF
OVER $9 MILLION PASSED ON TO
CONSUMERS AND THE PUBLIC OVER
THE PAST 10 YEARS, SO IT ISN'T
IT IS THE DEPARTMENT'S RATE
REGULATION EXPERTS WHO ARE THERE
DAY IN AND DAY OUT AND LEAD EACH
OF THE FINDINGS PROCESS. PUT IT
IN PERSPECTIVE. WE HAVE CLEARLY
95 HOME OWNERS RATE FILINGS ON
OUR PLATE AND 75 AUTO INSURANCE
RATE FILINGS JUST SOME OF THE
THOUSANDS OF FILINGS THAT WE
REVIEW EACH YEAR SO WE ARE
FOCUSED ON STRENGTHENING MY
DEPARTMENT'S RATE REGULATION
BRANCH SO THAT WE CAN MEET THE
COMBINED GROWTH DEMANDS ON RAID
APPLICATIONS SUBMITTED BY THE
SUBMITTED TO THE DEPARTMENT WHEN
THE MARKET CONDITIONS CHANGE
RAPIDLY. WE MUST DO OUR PART AS
REGULATORS TO PROTECT CONSUMERS.
CONSUMERS ACCESS TO, YOU KNOW,
WHILE MEETING OUR STATUTORY
DEADLINES AS WELL. SO WE WILL BE
INTRODUCING NEW REGULATIONS TO
IMPROVE ALL AREAS OF THE RATE
REVIEW PROCESS. THE PROCESS
EXTENDS BEYOND THE DEPARTMENT.
WE ARE GONNA WE ARE EXPECT ALL
PARTICIPANTS IN THE PROCESS,
INCLUDING INSURANCE COMPANIES
AND INTERVENERS TO WORK WITH US
TOWARDS IMPROVING OUR REVIEW AND
APPROVAL RATE PROCESS, WHICH IS
AN ESSENTIAL PART OF HOW WE KEEP
INSURANCE AVAILABLE IN OUR STATE
. SO LET'S TALK ABOUT FOR
INSURANCE COMPANIES. WE INTEND
TO ENFORCE THE REQUIREMENT THAT
A COMPLETE RATE APPLICATION
SUBMITTED BY THE DEPARTMENT
BEFORE THE CLOCK ON REVIEWING
THE APPLICATION BEGINS. IN THE
PAST. THIS IS IMPORTANT TO KNOW
THAT IN THE PAST WE HAVE ALLOWED
INSURANCE COMPANIES TO SUBMIT
THEIR APPLICATIONS WITHOUT THE
COMPLETE DATA THAT WE NEED. BUT
TODAY WE DON'T HAVE THE LUXURY
OR TIME FOR A LENGTHY BACK AND
FORTH ABOUT INCOMPLETE
APPLICATIONS. WE EXPECT
INSURANCE COMPANIES TO PROVIDE
THE DEPARTMENT WITH THE COMPLETE
INFORMATION UP FRONT THAT IS
NEEDED FOR US TO MAKE A
DETERMINATION ON THE REQUESTED
DATE. OUR DEPARTMENT WILL
PROVIDE RATE RECONCILIATION TOOL
TO REALLY ASSIST WITH THAT,
WHICH IS IMPORTANT. SHORTLY
AFTER ANNOUNCING THE STRATEGY,
THE DEPARTMENT REVIEWED ITS
RIGHT APPLICATION INTERVENTION
PROCESS. WE STREAMLINED THE
INTERVENER PROCESS IN THE RAID
APPLICATIONS TO PROVIDE GREATER
CLARITY, EFFICIENCY AND, MOST
IMPORTANTLY, TRANSPARENCY. THE
THIRD PARTY INTERVENERS OR
INTERVENER, I SHOULD SAY ARE
ONLY ALLOWED TO RAISE ISSUES
THAT ARE DIRECTLY RELEVANT TO
THE SPECIFIC APPLICATION RAISING
UNRELATED OR IRRELEVANT. ISSUES
ONLY SERVES TO SLOW DOWN THE
PROCESS, WHICH HAS A DIRECT
IMPACT ON CONSUMERS AND
INSURANCE AVAILABILITY,
ESPECIALLY WHEN THERE ARE OTHER
AVENUES TO RAISE THESE ISSUES.
SO MOREOVER, I SHOULD SAY OUR
INTERVENER PETITIONS AS WELL AS
HOW MUCH COMPENSATION THEY
RECEIVED FOR INTERVENTION ARE
NOW POSTED ON THE DEPARTMENT'S
WEBSITE. OVERALL THE GOALS FOR A
MORE STREAMLINED, EFFICIENT AND
TRANSPARENT APPROACH WILL BE ALL
BETTER REPRESENT THE INTEREST OF
CALIFORNIA CONSUMERS AND YOU
ARE, AS THE LEGISLATURE WILL BE
ABLE TO ACCESS THAT INFORMATION
QUICKLY AS OPPOSED TO HAVING IT
BURIED WITHIN THE DEPARTMENT
WEBSITE WHERE NOBODY CAN FIND
IT. LET'S GET TO CATASTROPHIC
MODELS AS THE CHAIRWOMAN SAID.
ANOTHER COMPONENT OF MY STRATEGY
IS ALLOWING NEW RISK ASSESSMENT
TOOLS THAT CAN SUPPORT GREATER
AVAILABILITY FOR INSURANCE. FOR
THE PAST 30 YEARS, THE
DEPARTMENT'S ONLY USED
HISTORICAL LOSSES AS A METHOD
FOR ESTIMATING CATASTROPHIC
CATASTROPHE ADJUSTMENTS THINK
THE CALIFORNIA RATE REVIEW
PROCESS SIMPLY INSURANCE
COMPANIES LOOK TO THE PAST
EXPERIENCE TO PREDICT FUTURE
LOSSES, HOWEVER, HISTORIC
CLASSES DO NOT ACCOUNT FOR THE
GROWING RISK CAUSED BY CLIMATE
CHANGE. WHAT'S MORE, WHAT'S MORE
THIS APPROACH IS DIRECTLY
CONTRIBUTING TO THE GROWING COST
OF INSURANCE AS RECORD SETTING
LOSSES, FUEL HIGHER RATES WITH
NO ALLOWANCE FOR THE COLLECTION
COLLECTIVE EFFORT TO REDUCE THE
RISK THROUGH HOME, HARDENING,
PRESCRIBED FIRES AND HEALTHY
FOREST PROJECTS AGAIN. THERE'S
GOTTA BE A BETTER WAY, AND THAT
IS THAT IS TRUE. THE USE OF
FORWARD LOOKING MODELS THAT CAN
BE THOROUGHLY REVIEWED AND
JUSTIFIED, SO MY DEPARTMENT IS
ENGAGED IN ONGOING
CONVERSATIONS. IN THE PUBLIC
WORKSHOPS WITH THE PUBLIC
ACADEMIA INSURANCE COMPANIES.
CONSUMER GROUPS REGARDING THE
USE OF CATASTROPHIC CATASTROPHE
MODELS IN THE RATE APPROVAL
PROCESS. THE USE OF THESE MODELS
WILL BE INFORMED BY CALIFORNIA'S
GOALS OF FAIRNESS, AVAILABILITY
AND AFFORDABILITY, AND I
RECOGNIZE AS AS SENATOR ALVARADO
, HE WAS SAYING TIME IS OF THE
ESSENCE. BUT THIS IS NOT
SOMETHING THAT CAN HAPPEN
OVERNIGHT. UNFORTUNATELY THE
PROCESS OF INCORPORATING
CATASTROPHE MODELS INTO
CALIFORNIA'S RATE APPROVAL
PROCESS IS REALLY COMPLICATED
AND INVOLVES MULTIPLE BRANCHES
OF MY DEPARTMENT WORKING
TOGETHER. UH, ON THE SOLUTION,
IN ADDITION TO THE ABOVE WORK,
MY DEPARTMENT'S EXAMINING THE
USE OF BOTH PRIVATE AND PUBLIC
MODELS BASED ON CONVERSATIONS
AND WORKSHOPS WITH THE PUBLIC.
WE RECOGNIZE THE BENEFITS OF
BOTH PRIVATE AND PUBLIC MODELS
THAT ARE PURSUING BOTH TRACKS SO
THERE COULD BE SOME CHECKS AND
BALANCES. I LOOK FORWARD TO
INTRODUCING THIS REGULATION FOR
THE PUBLIC FOR THE PUBLIC INPUT
AND ADAPTATION THROUGHOUT 2024.
UM THE OTHER COMPONENT OF THIS
DEAL IS REINSURANCE REASSURANCES
AND EXTEND INCREASING EXPENSE
INCURRED BY INSURANCE COMPANIES
AS PART OF OUR COST OF RIDING
HOMES AND BUSINESSES. BUSINESS
POLICIES IN CALIFORNIA. ENSURED
NATURAL DISASTERS. LOSSES HAVE
INCREASED 5 TO 7% ANNUALLY OVER
THE LAST 30 YEARS, AND INSURANCE
COMPANIES ARE TAKING ON MORE
REINSURANCE COSTS FOR THESE
INCREASES. OUR ANALYSIS SHOWS
THAT REINSURANCE IS AN IMPORTANT
COMPONENT OF HOW INSURANCE
COMPANIES MANAGE THEIR OWN RISK.
ENABLING THEM TO WRITE POLICIES
DESPITE GROWING THREATS IN OUR
STATE, CALIFORNIA IS ONE OF FEW
STATES IN THE NATION THAT DOES
NOT ALLOW INSURANCE COMPANIES TO
RECOVER THIS EXPENSE. THIS
CONTRIBUTES TO INSURANCE
COMPANIES DECISIONS TO REDUCE
NEW POLICIES OR RESTRICT WRITING
TO JUST THE LOWEST RISK
POSSIBLE. THIS IS WHY MY
DEPARTMENT'S EXAMINING HOW TO
ALLOW INSURANCE COMPANIES TO
RECOVER THEIR CALIFORNIA ONLY
NET COST OF REASSURANCE OUR
GOALS FOR CONSUMERS TO HAVE
INSURANCE OPTIONS. WE SEEK TO
ALLOW INSURANCE COMPANIES TO
RECOGNIZE AND RECOVER THEIR
CALIFORNIA ONLY NET COST OF THE
INSURANCE AND LETTING THOSE
REFLECT IN LETTING THEM REFLECT.
IN THERE IN THE RATES, SO THAT
AND OF COURSE, WILL BE
TRANSPARENT SO THAT WE ALL
UNDERSTAND THAT PROCESS. THIS
WILL ENCOURAGE CARRIERS TO RE
ENTER AND EXPAND THEIR BUSINESS
IN CALIFORNIA, ESPECIALLY OUR
PROPERTY MARKET, WITH THE RATES
THAT ARE MORE ACCURATELY REFLECT
THE COST OF DOING BUSINESS IN
CALIFORNIA, INSURANCE COMPANIES
WILL NOT RETURN TO CALIFORNIA
UNLESS THEY'RE ABLE TO CHARGE
THE RATES THAT ARE JUSTIFIED TO
COVER THE RISKS AND PROVIDE
OPPORTUNITY OF A FAIR. RETURN
I'VE BEEN VERY CLEAR THAT
INCREASING AVAILABILITY OF
INSURANCE IS HOW WE'RE GOING TO
PROTECT AFFORDABILITY. WE NEED
TO FOCUS ON GETTING INSURANCE
COMPANIES BACK TO WRITING NEW
BUSINESS IN CALIFORNIA AND TO A
POINT WHERE THEY CAN BE
COMPETING FOR CALIFORNIANS
BUSINESS AND LOWERING THOSE
COSTS AS THE ASSURANCE HAS THE
LARGEST INSURANCE MARKET IN THE
NATION. CALIFORNIA'S INSURANCE
RATES ARE FAR LOWER ON AVERAGE
THAN MANY LARGE STATES THAT
FACED GROWING RISKS FROM CLIMATE
CHANGE. PARTICULARLY HURRICANES
AND THE EAST COAST AND ON THE
GULF COAST. CALIFORNIANS ALREADY
PAYING MORE FOR INSURANCE AND
NOT GETTING MUCH IN RETURN. YOU
SIMPLY NEED TO ASK PEOPLE IN A
SOUSA, WHERE I JOINED SENATOR
RUBIO WHEN SHE ANNOUNCED FUNDING
FOR WILDFIRE PREVENTION OR IN
SOUTH LAKE TAHOE. WHAT I MET
WITH SENATOR ALVARADO KILL LAST
YEAR OR IT WOULD SENATOR DODD.
DIDN'T SENATOR DODD'S DISTRICT,
WHICH HAVE EXPERIENCED SOME OF
THE WORST WILDFIRES IN
CALIFORNIA'S HISTORY. THOSE
PREMIUM INCREASES ARE HAPPENING
UNDER THE CURRENT REGULATIONS,
WHICH CLEARLY ARE ARE NOT
WORKING IN THOSE AREAS. MOST
IMPORTANTLY, THE TO RISK
ASSESSMENT TOOLS. I HAVE JUST
DISCUSSED CATASTROPHIC MODELING
AND REINSURANCE ARE SIGNIFICANT
BECAUSE TO USE. TO USE THEM TO
SET THE RATES. UNDER OUR
AGREEMENT, INSURANCE COMPANIES
MUST SATISFIED TWO IMPORTANT
COMMITMENTS AND THAT IS VERY
IMPORTANT. UM ONE FIRST PART OF
THE COMMITMENT IS THAT THEY MUST
INCREASE THE WRITING AND AT
LEAST 85% OF HOMES AND
BUSINESSES IN DISTRESSED AREAS
FOR WILDLAND URBAN INTERFACE.
SECOND IS THAT THEY MUST HELP
THE POPULATE THE FAIR PLAN
IMMEDIATELY. THESE ARE ESSENTIAL
MANDATES. THESE ARE ESSENTIALLY
MANDATES, BUT ONCE THAT WE CAN
MONITOR OVER TIME AND THEN FORCE
WHEN NEEDED THROUGH OUR
DEPARTMENT'S REGULATION TO
ENSURE CALIFORNIANS HAVE ACCESS
TO INSURANCE INSURANCE COMPANIES
STAY IN OUR STATE AND EXPAND THE
REACH AND OUR COMMUNITY
STATEWIDE. INSURANCE COMPANIES
CAN ADD. IF THE ISSUES COMPANIES
CANNOT MEET THIS COMMITMENT OR
WILL NOT BE ABLE. THEY'RE NOT
GOING TO BE ABLE TO USE EITHER
CATASTROPHIC MODELING FOR
REASSURANCE AS PART OF THE RATE
APPLICATION INSURANCE COMPANIES
HAVE FAILED TO FOLLOW THROUGH
UNDER COMMITMENT WILL HAVE THE
RATE REASSESSED BY MY DEPARTMENT
. SO THIS IS HOW WE CREATE THE
PROPER CHECKS AND BALANCES AND
WE MAKE SURE THAT INSURANCE
COMPANIES ARE FOLLOWING THROUGH
ON THEIR COMMITMENT FOR OUR
SUSTAINABLE INSURER. RINSE.
STRATEGY. LET ME QUICKLY TALK
ABOUT THE FAIR PLAN AS THEY WRAP
UP WELL, WE FOCUS ON SHRINKING
THE YOU KNOW, WE WHILE WE
FOCUSED ON SHRINKING THE FAIR
PLAN, IT WILL STILL BE A
TEMPORARY OPTION IN THE SHORT
TERM FOR CALIFORNIANS. THE FAIR
PLAN HAS BEEN NEGLECTED FOR MANY
, MANY YEARS UNDER MULTIPLE
INSURANCE COMMISSIONERS. WELL I
HAVE MADE MANY EFFORTS TO THE
FAIR PLAN. WE MADE MANY, MANY
REFORMS TO THE FAIR PLANTS SINCE
THEY TOOK OFFICE. WE NEED TO
MAKE FURTHER IMPROVEMENTS TO THE
FAIR PLAN SO THAT IT CAN SERVE
ITS LEGISLATIVE LEÓN INTENDED
PURPOSE OF CREATING STABILITY IN
THE PROPERTY INSURANCE MARKET,
PROVIDING CONSUMERS WITH THE
BEST POSSIBLE CUSTOMER SERVICE.
THERE ARE MORE CHANGES TO THE
FAIR PLAN THAT ARE NEEDED. SOME
CALIFORNIANS NEED MORE COVERAGE
THAN THE FAIR PLANT CURRENTLY
PROVIDES, PARTICULARLY OUR
HOMEOWNERS AND CONDO
ASSOCIATIONS. THUS WE WILL BE
WORKING TO INCREASE COVERAGE FOR
OUR LAW. LARGE HOMEOWNERS
ASSOCIATIONS, CONDO ASSOCIATIONS
, FARMS AND OTHER BUSINESSES IN
NOVEMBER, A COURT UPHOLD UPHELD
MY ORDER THAT THE FAIR PLAN
OFFER A MORE COMPREHENSIVE
HOMEOWNERS POLICY. THE FAIR PLAN
SHOULD STOP FORCING CONSUMERS TO
PURCHASE A SEPARATE POLICY AT
ADDITIONAL COST. IT'S TIME THAT
THE FAIR PLAN ENDS THERE. YOU'RE
YOU KNOW THEIR CHALLENGES OF MY
ORDER AND WORK TO IMPLEMENT IN
PARTNERSHIP IN IMPLEMENTING
CHANGES WITH THE PARTNERSHIP FOR
PARTNERSHIP IN MY DEPARTMENT. IT
IS ALSO ESSENTIAL AT THE FAIR
PLANT ISSUE REGULAR REPORTS TO
MY DEPARTMENT TO YOU, THE
LEGISLATURE AND TO THE GOVERNOR
SO THAT WE CAN MONITOR THEIR
PROGRESS THE FAIR PLAN HAS
ESTABLISHED WAS ESTABLISHED BY
THE LEGISLATURE AND THE GOVERNOR
AND THEN MUST BE MORE
ACCOUNTABLE AND TRANSPARENT TO
THE PUBLIC. MY DEPARTMENT HAS A
GOAL OF SUBMITTING EACH OF THE
REGULATORY EFFORTS ASSOCIATED
WITH THE DIFFERENT COMPONENTS OF
OUR STRATEGY. THROUGHOUT THE
YEAR. THE GOAL OF THIS
COMPLETION TO ANSWER SENATOR
ALVARADO GILLES QUESTION IS THE
GOAL IS TO COMPLETE ALL OF THESE
REGULATIONS. BY THE END OF 2024
WE HEAR YOU WE SEE YOU WE KNOW
FIRSTHAND AFTER TALKING NUMEROUS
TIMES TO YOUR CONSTITUENTS THAT
THEY WANT THESE CHANGES AS
QUICKLY AS POSSIBLE. SO MY
DEPARTMENT'S FIRST REGULATORY
EFFORT WILL BE FILING THE FILING
OF THE COMPLETE RATE APPLICATION
ROLE MAKING IN THE NEXT FEW
WEEKS. THE GOAL OF THIS
RULEMAKING IS TO AMEND THE
CURRENT REGULATIONS TO REQUIRE
INSURERS TO SUBMIT ALL OF THE
INFORMATION THAT THE DEPARTMENT
NEEDS TO THE RATE TO THE THEY
NEEDED TO REVIEW A RATE
APPLICATION BEFORE THE CLOCK
STARTS. ON THE TIME THAT MY
DEPARTMENT HAS TO REVIEW TO
APPROVE THESE APPLICATION RATES.
MY DEPARTMENT ALSO IS ALSO THANK
YOU THANKS TO THE BUDGET OR ALSO
HIRING MORE ANALYSTS AND ACTUAL
AREAS TO STRENGTHEN OUR INTAKE
AND REVIEW PROCESS AND BUSILY
PULLING TOGETHER THE
RECONCILIATE PUTTING THE RATE
CONCILIATION TOUR THAT WE NEED.
EACH COMPONENT REQUIRES CAREFUL
ANALYSIS BY OTHER PARTS OF MY
DEPARTMENT, INCLUDING MY LEGAL
BRANCH. CLIMATE BRANCH
REGULATION BRANCH AND SPECIAL
COUNSEL'S OFFICE. I DON'T WANT
ANOTHER INSURANCE COMMISSIONER
TO BE BACK IN FRONT OF YOU IN 5
TO 10 YEARS BECAUSE OF
REGULATIONS CANNOT STAND THE
TEST OF TIME. AS YOU KNOW, IT
WILL BE VERY COMPLICATED. WE CAN
GET THAT DONE. SO HOW DO
CONSUMERS BENEFIT? LASTLY UNDER
THE STRATEGY, THERE'S A CLEAR
BENEFIT FOR CONSUMERS IN THE
AREAS WHERE THE FAIR PLAN HAS
BECOME THE ONLY OPTION.
CONSUMERS GET GREATER INSURANCE
AVAILABILITY MORE OPTIONS MEAN
BETTER COMPETITION ON COST AND
SERVICE. TO UTILIZE THE NEW
TOOLS THAT I HAVE DISCUSSED.
INSURANCE COMPANIES MUST TAKE
POLICYHOLDERS FROM THE FAIR
PLAN, USING THE CLEARINGHOUSE
PROGRAMS CREATED BY BILLS. THE
BILLS THAT WE PASSED IN THE
LEGISLATURE AND SIGNED BY THE
GOVERNOR, UM, THE LEGISLATURE
AGAIN CONTINUES. CONTINUED
SUPPORT IN THESE ESSENTIAL IS
GOING TO BE ESSENTIAL FOR
ONGOING EFFORTS. YOUR
GROUNDBREAKING BUDGET
INVESTMENTS ALONG WITH THE
GOVERNOR NEWSOM'S ADMINISTRATION
IN WILD FIRE SAFETY ARE REALLY
TRANSFORMING OUR EXIST. IN
COMMUNITIES. MY DEPARTMENT IS
FINALIZING MY SAFER FROM
WILDFIRES REGULATION DISCOUNTS,
WHICH WILL AMPLIFY THE BENEFITS
OF WELFARE SAFETY SPENDING. WELL
I UNDERSTAND THAT THIS BUDGET
YEAR WILL BE VERY DIFFICULT OF
AND WE'LL REQUIRE DIFFICULT
DECISIONS, THE INVESTMENTS THAT
YOU MAKE AND WILD FIRE SAFETY
WILL PAY A LONG TERM. WHAT PAY
LONG TERM DIVIDENDS IN THE LIVES
AND HOMES SAVE AND MORE AND WILL
CREATE A MORE SECURE INSURANCE
MARKETPLACE. I URGE YOU TO
CONTINUE TO WORK. WITH THE
GOVERNOR TO SAFEGUARD THESE
FUNDING THESE FUNDS AS
PRIORITIES AND INVESTMENTS, YOUR
SUPPORT FOR ADDITIONAL
DEPARTMENT STAFF AND IN THE
RECENTLY ENACTED BUDGET WILL BE
CRITICAL. AND THANK YOU AGAIN
FOR HELPING US IMPLEMENT THESE
CRUCIAL REGULATORY CHANGES. AND
AGAIN, I'LL JUST SAY YOUR
CONTINUED INVOLVEMENT AND
PARTNERSHIP IS GOING TO BE
ESSENTIAL TO SUPPORT INVESTMENTS
IN WELFARE SAFETY TO WORK WITH
OUR FEDERAL PARTNERS TO BETTER
MANAGE FEDERAL LANDS AND
INCREASED FUNDING FOR HOME.
HARDING AND COMMUNITY GRANTS
ADMINISTERED BY THE STATE OF
CALIFORNIA. RISK REDUCTION IS
CENTRAL TO SAFETY AND LONG TERM
STABILITY, LONG TERM INSURANCE
STABILITY AS SENATOR DODD'S, UM,
OP ED. VERY VERY DILIGENTLY
EXPRESSED, AND IT WAS VERY
ELOQUENT THE CONVERSATIONS WE'VE
HAD IN THE LAST YEAR'S
LEGISLATIVE SESSION, UH AS AS WE
DEVELOPED THE STRATEGY SHOW THAT
WE ARE SEEING THE PROBLEMS
CLEARLY AND YOU SHARE IN THE
NEED FOR URGENCY. I JUST WANT
WHAT CONTINUE TO PARTNER WITH
ALL OF ALL OF THOSE WHO WANT TO
BE CONSTRUCTIVE IN WORKING
TOWARDS REAL SOLUTIONS, AND I
LOOK FORWARD TO CONTINUING TO
WORK WITH ALL OF YOU TO IDENTIFY
ADDITIONAL INNOVATIVE WAYS TO
CREATE A MORE RESILIENT
COMMUNITY. REALLY WITHSTAND
CLIMATE CHANGE AGAIN. THANK YOU
FOR YOUR TIME AND SORRY FOR
RAMBLING ON, BUT I KNOW THIS IS
OF GREAT IMPORTANCE FOR SO MANY
CALIFORNIANS. THANK YOU.
INSURANCE COMMISSIONER. THAT WAS
VERY IN DEPTH. AND YOU KNOW, I
KNOW IT'S A LOT OF INFORMATION
COMING TO EVERYONE AND A LOT OF
TIMES IT GETS KIND OF LOST, BUT,
YOU KNOW, THANK YOU. WE'VE BEEN
DOING THIS TOGETHER FOR A LITTLE
WHILE. LAST YEAR, WE EMBARKED
AND SUMMARY ZOOM MEETINGS TRYING
TO EDUCATE, BUT THERE IS A LOT
OF IMPORTANT KEY ELEMENTS OF
YOUR STRATEGY HERE, AND I DO I
HAVE TO AGREE WITH YOU. I'M NOT
SURE I'VE SEEN ANY AND TRANS
COMMISSIONER ENGAGE IN THE WAY
THAT YOU HAVE, YOU KNOW, THERE'S
PEOPLE ON ALL SIDES. IT'S NOT
ABOUT PICKING A WINNER OR LOSER,
BUT REALLY TRYING TO FIGURE OUT
HOW DO WE MAKE SURE THAT
INSURANCE IS AVAILABLE? IT'S
AFFORDABLE AND THAT CONSUMERS
HAVE WHAT THEY NEED. ONE OF THE
ELEMENTS I WANT TO SHARE AS WE
EMBARKED LAST YEAR, AND WE
STARTED TALKING ABOUT YOU KNOW,
HOW DO WE REFORM THIS AND
CONVERSATIONS AND HOW DO WE MOVE
FORWARD? YOU KNOW, I KEPT SAYING
OVER AND OVER AGAIN, THE
INSURANCE COMMISSIONER NICE
STARTED WITH THE CONVERSATIONS
WITH CONSUMERS, AND WE ENDED THE
CONVERSATION WITH CONSUMERS
BECAUSE THAT'S UH THAT'S WHY
WE'RE HERE. AND NOW I'M REALLY
HAPPY THAT YOU MENTIONED ALL THE
PEOPLE THAT YOU'VE BEEN WORKING
WITH A SPECIAL OTHER
STAKEHOLDERS FROM FARMERS TO
REALTORS Tð. AH YOU KNOW, FIRE
VICTIMS, ONE OF THE ELEMENTS
FROM LAST YEAR'S I REMEMBER. OUR
DISCUSSIONS IS THAT CONSTANT
SORT OF MANDATE TO JUST FORCE
THE INSURANCE INDUSTRY JUST TO
DO IT, AND I THINK YOU TOUCHED
ON THAT. IT'S NOT AS EASY AS
MANDATING THAT THE INSURANCE
COMPANIES JUST ENSURE I THINK I
BELIEVE YOU MENTIONED THAT
CHALLENGE THAT GARAMENDI HAD
SEVERAL YEARS BACK THEIR
BUSINESS AND WE DON'T
NECESSARILY TELL THEM WHAT TO
DO. BUT WHAT WE DO IS WE WORK
WITH THEM TO ENSURE THAT WE CAN
FIND THAT MIDDLE GROUND AND THAT
EVERYONE HAS WHAT THEY NEED. IS
THAT PERTAINS TO INSURANCE. I
KNOW. IN CALIFORNIA WE HAVE, UM,
THE HOUSING CRISIS. THIS IS ONE
OF OUR BIGGEST. I THINK CRISIS
OF THE DAYS AS WELL, TRYING TO
ENSURE THAT WE MINIMIZE HOMELESS
AND THEN WE HAVE ENOUGH HOUSING
STOCK TO PUT PEOPLE IN OUR
HOMES. YET LAST YEAR, WE FOUND
ALL THESE DEVELOPERS SAYING THAT
THEY'RE NOT GOING TO BUILD ANY
MORE STALLING THEIR PROJECTS
BECAUSE IT COULDN'T GET
INSURANCE. SO EVEN THOUGH WE
DON'T THINK ONE THING HAS TO DO
WITH THE OTHER, EVERYTHING IS
INTERCONNECTED, AND IN
PARTICULAR, WE WANTED TO MAKE
SURE THAT THERE'S ENOUGH HOUSING
STOCK AND DEVELOPERS WERE GOING
FROM PLANNING. UM SEVERAL EITHER
CONDOS OR MULTI UNIT HOUSING TO
STALLING AND OR STOPPING
ALTOGETHER TO TRANSITION INTO
SINGLE FAMILY HOMES. JUST
BECAUSE OF THE INSURANCE AND SO
NOW THAT YOU KNOW WE'VE BEEN
WORKING ON THIS SINCE LAST YEAR.
I JUST WANT TO THANK YOU BECAUSE
YOU HAVE BROUGHT ALL THE
STAKEHOLDERS TOGETHER AND THERE
IS SOME INFORMATION. THAT YOU
PUT OUT THAT USUALLY IS NOT YOU
KNOW EASILY, UM, YOU KNOW,
BROUGHT FORWARD TO THE LIGHT. I
THINK YOU MENTIONED THAT THERE
IS ONE PARTICULAR COMPANY WHO
HAS BEEN THE BIGGEST INTERVENER
AND I THINK IT WAS $9 MILLION
THAT YOU MENTIONED THAT ONE
PARTICULAR COMPANY MADE IT JUST
CHALLENGING SOME OF THESE RATES,
MAKING PROCESSES, AND SO AGAIN,
PEOPLE DON'T REALIZE THAT THE
MORE WE STALL THEM, OR THAT
FALLS ON OUR CONSUMERS TO PAY
FOR IT. AND AGAIN EVEN DOUBT THE
FAIR PLAN. AS YOU KNOW, WE HAVE
A REAL BIG CRISIS ON A HAND THEY
HAVE THAT USED TO BE THAT IT WAS
THE INSURER OF LAST RESULTS.
LAST RESORT NOW WE'RE SENDING
EVERYONE TO THEIR FAIR PLAN. SO
OUR GOAL IS TO DEEP APP
DEPOPULATE THE FAIR PLAN. BUT
WHAT HAPPENS IF WE HAVE OH,
CATASTROPHE RIGHT NOW. I MEAN,
WE KNOW THAT WE ARE AT THE BRINK
OF RELIEF FALLING APART AND I
THINK I HEARD THE INSURANCE
COMMISSIONER SAY THAT YOU KNOW,
THIS IS IT? WE'RE AT THE END OF
THE ROAD AND SOME SO HAPPY THAT
YOU'VE TAKEN, YOU KNOW, CHARGE
AND REALLY DUMPED DEEP INTO ALL
THE ISSUES THAT WE'RE DEALING
WITH. IN PARTICULAR, YOU KNOW,
STREAMLINING THE RATE OF
APPLICATION PROCESS. I KNOW THAT
FROM THE INSURER'S SIDE THAT
THAT'S A BIG DEAL BECAUSE THEY
WERE NOT WRITING BECAUSE THERE'S
LIKE A BOTTLENECK AND DAZZLE,
HOPEFULLY WITH SOME OF THE
FUNDING THAT YOU WERE ABLE TO
GET TO ASK SPRUCE UP YOUR
WORKFORCE IN TERMS OF HIRING
MORE ACTUARIES AND MORE ANALYSTS
, AND SO I WANT TO CONTINUE THE
CONVERSATION LATER ON THAT, YOU
KNOW IT'S WORKING. I KNOW WHEN
WE TALKED LAST YEAR, I WAS GOING
TO TAKE SIX MONTHS TO ON BOARD
ALL THE STAFF THAT YOU NEEDED AT
THE TIME. UM, BUT I WANT TO SEE
HOW THAT'S WORKING. HOW ELSE CAN
WE SUPPORT YOU IN MAKING SURE
THAT YOU HAVE THE STAFF THAT YOU
NEED AND LEGISLATION THAT YOU
NEED TO CONTINUE TO MOVE THIS
FORWARD? I'LL CONTINUE MY
DISCUSSION, BUT I WANT TO MAKE
SURE THAT I BRING IT BACK TO THE
MEMBERS TO AND MAKE SURE THEY
HAVE AN OPPORTUNITY TO ASK
QUESTIONS AND MAKE COMMENTS
THEMSELVES. SO I'M GOING TO
START WITH OUR VICE CHAIR. YOU
MAY PROCEED. THANK THANK YOU,
MADAM. MADAM CHAIR. THANK YOU.
COMMISSIONER REALLY APPRECIATE
YOUR PRESENTATION. ALL YOUR
EFFORTS ALSO MEETING WITH OUR
CAUCUS AS WELL AND ANSWERING A
LOT OF THOSE QUESTIONS FOR US.
I'VE GOT A FEW QUESTIONS, AND
I'M JUST GONNA GIVE YOU ALL THE
QUESTIONS AND IF YOU NEED ME TO
COME BACK TO ANY OF THEM, PLEASE
LET ME KNOW. SO OBVIOUSLY WE'RE
CONCERNED WITH ACCESS TO
INSURANCE COVERAGE. MY OFFICE
LIKE MANY OF MY COLLEAGUES HERE
HAVE RECEIVED LOTS OF COMPLAINTS
. YOU KNOW, HUNDREDS OF NOT MORE
FROM CONSTITUENTS OR AGENTS.
REGARDING HOW HARD IT IS. IT'S
BEEN TO CONSUMERS TO FIND
INSURANCE FOR BOTH THEIR HOMES
AND CARS. WHEN WOULD THIS HAPPEN
? WHAT WILL PEOPLE DO IN THE
MEANTIME? YOUR SLIDE THAT YOU
HAVE INSURANCE AT A CROSSROADS
REFERENCING. OUTDATED
REGULATIONS. CAN YOU TELL US
WHAT YOU ARE DOING TO MODERNIZE
OUTDATED REGULATIONS AND HOW
THAT WOULD HELP MAKE BOTH
HOMEOWNERS AND AUTO INSURANCE?
MORE ASSESSABLE FOR MY
CONSTITUENTS OR ALL OF OUR
CONSTITUENCIES? THE NEXT ONE IS,
UM IN REGARDS TO MODERNIZING THE
OUTDATED REGULATIONS. DO YOU
BELIEVE IT WILL BE NECESSARY FOR
THE LEGISLATURE ENACT ANY
STATUES AND. OR DO YOU AND YOUR
DEPARTMENT HAVE ENOUGH
REGULATORY AUTHORITY TO MAKE
THOSE CHANGES WITHOUT US, UM YOU
KNOW, FOR EXAMPLE, MIGHT YOU
NEED. EMERGENCY REGULATION
AUTHORITY FROM THE LEGISLATOR. I
DON'T KNOW. UM SO THAT'S THE
THAT'S THE QUESTION. AND THEN,
UM NEWS REPORTS SUGGEST THE
SPECIAL INTEREST CONSUMER
ADVOCATES BELIEVE OUR INSURANCE
CRISIS IS NOT REAL. I CAN SEND
THEM TO MICHAEL IN MY DISTRICT.
UH, AND THAT INSURANCE THAT
INSURANCE ARE WALKING AWAY FROM
SELLING INSURANCE IN THE STATE
WITH 39 MILLION PEOPLE IN IT
JUST TO GET YOUR DEPARTMENT TO
APPROVE RATE CHANGES. IF YOUR
REFORMS TO MODERNIZE REGULATIONS
WORK. AND HOMEOWNERS AND AUTO
INSURANCE BECOME MORE ACCESSIBLE
FOR CALIFORNIA CONSUMERS. WHAT
EFFECT DO YOU BELIEVE THIS WILL
HAVE ON AFFORDABILITY? AND CAN
YOU HELP? EXPLAIN WHAT STEPS
YOU'RE GOING TO BE TAKEN TO
ENSURE THOSE AFFORDABILITY? AND
THE OTHER PART IS, UM. I KNOW
THAT A LOT OF THESE REGULATED A
LOT OF THESE COMMENTS AND
REGULATIONS THAT YOU ARE LOOKING
AT TRYING TO FIX AS WE ALL KNOW,
WE WISH IT WAS DONE YESTERDAY
AND NOT DECEMBER 2024. SO ONE OF
THE THINGS THAT WE KEEP ON
HEARING IS THE $20 MILLION.
LET'S SEE. THE 20 MILLION. UM
THE $20 MILLION POLICY OWNER FOR
THE FAIR PLAN. IS THERE ANY WAY
WE CAN GET THAT MOVING NOW? BUT
THE 20 MILLION CURLY RIGHT NOW
IS 20 MILLION PER LOCATION. AND
YOU'VE TALKED ABOUT 20 MILLION
PER STRUCTURE. ANYWAY WE CAN
MOVE THAT NOW AND NOT WAIT TO
THE END OF THE YEAR BECAUSE IN
THE MEANTIME WHAT EVERYBODY
SITTING IDLE AND NOT BEING ABLE
TO KNOW WHAT TO DO, OR THERE'S
NO PLAN IN PLACE FOR THEM. SO
THOSE ARE A FEW OF MY QUESTION,
MADAM CHAIR. THANK YOU.
INSURANCE QUESTION. YOU WANT TO
TAKE THOSE QUESTIONS? THANK YOU,
TREASURER. REMEMBER SOME OF
THOSE CENTER WINNER THEN YOU CAN
JUST JUMP IN AND ASK IF I MISS
IT. UM AROUND THE REGULATORY
TIMELINE. THIS IS THE CONVERSE
OF FRANK CONVERSATION THAT WE
HAD WITH THE INDUSTRY ABOUT BOTH
OF US BEING REAL REALISTIC ABOUT
, UM, MAKING SURE THAT THESE
RATES THE RATE FILES ARE
ACTUALLY SUBMITTED COMPLETED AND
IT'S SOMETHING THAT HONESTLY UH
YOU KNOW, WE WERE BOTH CAME TO
THE TABLE. THAT WE NEEDED TO
MAKE SURE THAT THESE GREAT
FINDINGS WERE COMPLETE BEFORE WE
START THE CLOCK BECAUSE JUST THE
BACK AND FORTH OF TRYING TO GET
THE DATA THAT WE NEEDED AND THAT
THEY WERE HESITATING TO GIVE US
AND THEN IF ON TOP OF THAT, IF
THE IF THE IF THE INTERVENER
CAME IN, WHICH THEN HAD ANOTHER
OPPORTUNITY TO ESSENTIALLY HOLD
THAT REFILING HOSTAGE UNTIL THEY
WERE WILLING TO NEGOTIATE WITH
US ONLY EXACERBATED THIS
PROBLEM, SO YOU KNOW MY REDDIT.
MY DEPARTMENT HAS THE GOAL OF
SUBMITTING EACH OF THESE REGULAR
REGULATORY EFFORTS ASSOCIATED
WITH THE DIFFERENT COMPONENTS OF
THE STRATEGY THROUGHOUT REALLY
THROUGHOUT THE YEAR, SO OUR
DEADLINE IS FOR A FULL
COMPLETION BY 2024. BUT THAT'S
THE MEAN WE'RE GONNA SUBMIT
EVERYTHING AT THE SAME TIME. WE
ARE GOING TO QUICKLY START WITH
THE RATE REVIEW PROCESS, WHICH
ALSO, UH ENSURES THAT THE
INTERVENER CAN NO LONGER
DUPLICATE ISSUES THAT THE
DEPARTMENT'S ALREADY COME UP
WITH. THEY CAN'T SIMPLY JUST CUT
AND PASTE AND SAY THEY HAVE
ISSUES THEY HAVE TO COME UP WITH
NEIL NEW, UM, ISSUES ARE ABOUT
THE ACTUAL RATE. FILING AND NOT
THINGS THAT ARE NOT ASSOCIATED
WITH THE RATE FILING LIKE THEY
USUALLY DO, AND THEN JUST
EXTENDS AND EXACERBATES THE TIME
. ONE WERE ALSO IN THE PROCESS
OF ON BOARDING NEW STAFF IN OUR
REGULATION BRANCH. THAT IS
HAPPENING REAL TIME, UH, THE
EFFORTS AROUND AS YOU RIGHTLY
SAID, UM THE YOU KNOW THAT I SAW
THIS ISSUE IN ORANGE WHERE WE
HAD THIS BEAUTIFUL COMMUNITY
THAT WAS BUILT. ONLY MEETS OUR
FIRE REQUIREMENTS AND UPDATED
CODES AND THEY STILL COULDN'T
FIND INSURANCE. AND THIS IS WHY
THE FAIR PLAN. WE'RE GOING TO
MOVE QUICKLY, AND I'LL HAVE I
CAN HAVE, UM MICHAEL MARTINEZ OF
THAT. THEY'RE KIND OF GIVE YOU
THE TIMELINE FOR THIS IMPORTANT,
FAIR PLAN. UM CHANGE, WHICH IS
YOU'RE ABSOLUTELY RIGHT, MOVING
THEM FROM 20 MILLION PER
LOCATION, WHICH IS REALLY
HELPFUL THAT WE PUSH FOR THAT.
AND THEY'RE BEGINNING FOR
SMALLER HOUSING DEVELOPERS,
ESPECIALLY FOR AFFORDABLE
HOUSING DEVELOPERS THAT HAVE
SMALLER PROJECTS, BUT IT'S CLEAR
THAT WE NEED TO MAKE THIS 20
MILLION PER BUILDING TO HELP OUR
OUR AFFORDABLE HOUSING
DEVELOPERS AND OUR REALTORS GET
TO BUILDING THE HOUSING STOCK
THAT WE NEED TO ADDRESS THE
HOUSING CRISIS THAT WE'RE LIVING
IN. AND LIKE YOU SAID, UM, WE
ARE THE CROSSROADS HERE. THIS IS
NO TIME TO JUST, UH. TO UM, JUST
SPEAK, YOU KNOW, UH, AND MAKE
BOMBASTIC COMMENTS. WE ARE
REALLY AT A CROSSROADS AND WE'RE
SEEING INSURANCE COMPANIES. YOU
SEEN THE, UM THE LIST OF
INSURANCE COMPANIES THAT HAVE
PASSED YOU BUSINESS IN
CALIFORNIA. THEY DON'T WANT TO
DO THAT. BUT AT THE END OF THE
DAY, I NEED TO MAKE SURE THAT
THEY HAVE ENOUGH. REVENUE TO PAY
OUT THOSE CLAIMS. AND IF THEY
DON'T THEY'RE YOU KNOW THEY'RE
GONNA CONTRACT THEIR BUSINESS
AND THAT'S WHAT WE'RE SEEING. SO
WE'RE GETTING THEM TO A POINT
WHERE WE'RE BOTH BEING HONEST
ABOUT THE RATE REVIEW PROCESS,
HIRING THE FOLKS WE NEED AND
MAKING SURE THAT IF THE
INTERVENERS GOING TO INTERVENE
THAT THEY'RE BRINGING IN NEW
ISSUES AND THAT THEY CAN NO
LONGER HOLD THESE RATE FILINGS
HOSTAGE UNTIL THEY FEEL LIKE
THEY'RE READY TO NEGOTIATE. SO
I'M GONNA TURN IT OVER TO
MICHAEL JUST TO GIVE YOU A FEW
MINUTES OF TO SHARE ON THE FAIR
PLAN. THANK YOU. YES THANK YOU.
CHAIR RUBIO AND THANK YOU, VICE
CHAIR NGUYEN, AND JUST TO ADD TO
WHAT COMMISSIONER LADA HAD
STATED IS THAT IN REGARD TO THE
FAIR PLAN, AND WE HAVE BEEN, WE
HAVE HAD AND WE WILL CONTINUE TO
HAVE VERY CONSTRUCTIVE MEETINGS
WITH THE FAIR PLANNED STAFF
BECAUSE IT'S VERY IMPORTANT THAT
IS THE REGULATOR THAT THAT WE
CAN WORK IN PARTNERSHIP WITH THE
FAIR PLAN IN THIS CASE TO HAVE
THE AVAILABILITY AND
AVAILABILITY OF THE 20 MILLION
PER LOCATION, WHICH IS NOW IN
FULL EFFECT. AND THEN ALSO
WORKING WITH THEM TO ENSURE THE
20 MILLION PER BUILDING AS WELL.
AND THE DUALITY HERE AS THE PER
LOCATION IS AGAIN IN FULL
EFFECT, AND INDIVIDUALS ARE ABLE
TO GO TO THE FAIR PLAN AND SEEK
THAT COVERAGE IF NEEDED ON THE
STRUCTURE LAST YEAR WHEN WE WERE
ENGAGING WITH THE LEGISLATURE,
ENGAGING WITH A VARIETY OF
STAKEHOLDERS AS PART OF THE
POLICY DISCUSSION, THERE WAS AN
ELEMENT THERE OF BEGIN THE
DUALITY OF HAVING THE 20 MILLION
PER PER STRUCTURE. UH ALSO TIMED
WELL, WITH THE WORK THAT WE'RE
DOING ON THE ASSESSMENT IN A
PREVIOUS CONVERSATION, VICE
CHAIR WHEN REGARDING THE
ASSESSMENT THAT IS A SENSITIVITY
THAT THE ADMITTED MARKET DOES
HAVE, AS THE FAIR PLAN CONTINUES
TO GROW THAT, AS WE KNOW, UNDER
CURRENT EXISTING LAW THAT IF THE
FAIR PLAN IS SHORT ON CAPITOL
CASH, ESSENTIALLY THAT THEY WILL
PASS THE HAT AROUND TO THE
ADMITTED MARKET BASED ON MARKET
SHARE THAT THOSE ADMITTED
CARRIERS WOULD NEED TO
ESSENTIALLY PONY UP AND MAKE THE
FAIR PLAN HOLD IN ORDER TO MAKE
CLAIMS. IF IN IF THERE IS A
CATASTROPHIC EVENT, AND SO THE
ISSUES THERE IS THAT IN THAT
WE'RE HAVING IN REAL TIME,
CONSTRUCTIVE CONVERSATIONS WITH
FAIR PLAN SO THAT WE CAN, IN
FACT, HAVE BOTH THE 20 MILLION
PER STRUCTURE. AND THE
ASSESSMENT. UH REFORM BE ABLE TO
MOVE FORWARD TOGETHER BECAUSE
THAT BECAUSE LOOK THE 20 MILLION
PER PER LOCATION AGAIN. IT'S
PART OF THE OVERALL NEGOTIATED
AGREEMENT. IT WILL INCREASE
LIABILITY AT THE FAIR PLAN. WE
ARE ALL I WOULD IMAGINE ALL ON
THE SAME PAGE AND KNOWING THAT
THAT THAT WOULD INCREASE
EXPONENTIALLY, THE POTENTIAL, UM
, VULNERABILITY OF THE FAIR PLAN
AND THE SOLVENCY. SO IN ORDER TO
HAVE IT BE ABLE TO MOVE FORWARD
IN PARTNERSHIP THAT WE WANTED TO
BE ABLE TO ALSO HAVE THE
ASSESSMENT REFORM MOVED FORWARD
AT THAT AT THAT, AT THAT SAME
TIME, PERIOD AND AGAIN, AS WITH
THE COMMISSIONER HAS STATED,
THAT IS A HUGE PRIORITY FOR US.
WE ALSO NEED TO MAKE SURE IT
ACTUALLY IS GOING TO WORK. AND
SO THAT'S SOMETHING THAT WE'RE
WORKING IN PARTNERSHIP WITH THE
FAIR PLAN, HAVING REAL TIME
CONVERSATIONS AS WELL AS WITH
THE STAKEHOLDERS IN THE ADMITTED
MARKET AND THE CONSUMER. UM AND
THOSE WHO UTILIZE INSURANCE
TODAY TO ENSURE THAT IT'S
WORKABLE, SO HOPEFULLY THAT THAT
ANSWER THAT PARTICULAR QUESTION
THAT YOU HAD YOU KNOW THAT YOU
HAD SEVERAL I CAN GO ON. IF YOU
WOULD LIKE. THANK YOU FOR THAT
ANY OTHER QUESTION? SO IS THAT A
YES WE'RE GOING TO MOVE FASTER.
IS THAT A OKAY? ABSOLUTELY I
KNOW. AND I'M NOT. I MEAN, THE
FAIR PLAN HAS NEVER BEEN THERE
TO BE THE FIRST STEP. THE FIRST
PROPER POLICY RIGHT? OR, UM AND
THEN, LIKE THE CHAIR SAID IT IT
WAS ALWAYS TO BE THE BACKUP.
RIGHT NOW. I THINK, THOUGH,
BECAUSE WE'RE SO UNSTABLE AND
ANOTHER I MEAN THE FULL YEAR.
THAT WE HAVE RIGHT NOW. WE JUST
NEED TO KIND OF STABILIZE THAT
MARKET FOR NOW UNTIL WE
IMPLEMENT EVERYTHING ELSE THAT
THE COMMISSION HAS MENTIONED. SO
THAT'S WHY I JUST WANT TO MAKE
SURE THAT WE HAVE SOMETHING IN
PLACE NOW AND NOT WAIT TO THE
END OF THE YEAR TO PUT IN PLACE
JUST TO FURTHER JUST STUFF TELL
ON STAFF. CHAIR WHEN WE CAN DO
ALL OF THIS. WE'RE DOING ALL OF
THIS WITHIN MY OWN REGULATORY
AUTHORITY. SO WE AT THIS MOMENT,
DON'T THEA NEED FOR ANY
EMERGENCY RAGS WHATSOEVER. UM
AND WE ALSO WANT YOU TO KNOW
THAT WE ARE MOVING AS QUICKLY AS
POSSIBLE. AND THAT THESE RAGS
AGAIN BY WHEN WE SAY BY DECEMBER
2024, IT MEANS THAT THEY'RE ALL
FULLY IMPLEMENTED THROUGH OUR
PROCESS BY 2024 BECAUSE YOU CAN
IMAGINE FOR A STATE AGENCY TO DO
THAT IN ONE YEAR. BECAUSE WE IS
DAUNTING, BUT WE ALSO UNDERSTAND
THE SENSE OF URGENCY AND AS YOU
RIGHTFULLY SAID THE FAIR PLAN,
IT HAS TO BE THE INSURER OF LAST
RESORT HAS TO HELP US BUT, UM,
STABILIZE THE MARKET, BUT IT
ALSO HAS TO MODERNIZE TO MEET
THESE NEW NEEDS, JUST LIKE YOU
DID. YOU KNOW THE FAIR PLAN WAS
CREATED AFTER THE WATTS RIOTS
WHEN NOBODY WOULD ENSURE IN
SOUTHERN CALIFORNIA IN THOSE
COMMUNITIES. NOW IT'S BECOME THE
INSURER LIFE RESORT FOR MANY
OTHER FOLKS LIVING IN THE WOY OR
NOW TRYING TO ADDRESS THE GLOBAL
INSURANCE CRISIS THAT WE FIND
OURSELVES IN. SO WE NEED TO HAVE
THE MODERNIZED AS QUICKLY AS
POSSIBLE AND EVEN JUST HAVE TO
SAY EVEN JUST THE MARKET SIGNALS
THAT WE'RE SENDING THAT IN
CALIFORNIA. WE'RE SERIOUS ABOUT
MAKING THESE REFORMS IS ALREADY
UM, ENSURING THAT OKAY, THERE'S
SERIOUS ABOUT MAKING THESE
CHANGES. THEY'RE SERIOUS TO MAKE
THE MAKING THESE MUCH NEEDED
REFORMS AND REMOVING THESE
OUTDATED REGULATIONS THAT IN
ITSELF IS ALREADY HELPING
SOMEWHAT STABILIZED SOME OF THE
ASPECTS OF OUR MARKET AND WE YOU
CAN ASK INDUSTRY AND FOR THOSE
OPINIONS, BUT FROM WHAT WE
UNDERSTAND AND HAVING
CONVERSATIONS, UM EVEN THAT
ALONE AND REMOVING SOME OF THAT
RED TAPE, THEY'VE BEEN THEY THEY
FEEL THAT THEY ARE VERY
CONFIDENT IN TERMS OF FEATURE
INVESTMENTS IN OUR STATE. AND
LET ME JUST WANTED TO FURTHER
ADD TO OUR CLARIFY WITH THE
COMMISSIONER HAD STATED, UM, IS
THAT, UH, THE EMERGENCY
AUTHORITY VERSUS EMERGENCY
REGULATIONS. WE HAVE THE
EXISTING STATUTES STATUTORY
AUTHORITY TO DO WHAT WE'RE DOING
ADMINISTRATIVELY AND IT MEANING
EMERGENCY REGULATIONS AND
REGULAR REGULATIONS. WE WILL
PROMULGATE EMERGENCY REGULATIONS
. WE DO NEED EMERGENCY
REGULATIONS BECAUSE IT IS AN
EMERGENCY. WE ARE IN A VERY
URGENT SITUATION STATEWIDE. AND
SO WE WILL PROMULGATE EMERGENCY
REGULATIONS SIMULTANEOUSLY WITH
REGULAR REGULATIONS. WE DO NOT
NEED EMERGENCY AUTHORITY BECAUSE
WE DO HAVE THAT EXISTING
STATUTORY AUTHORITY TO UNDERGO.
UM AND JUST TO ALSO POINT TO THE
GOVERNOR'S EXECUTIVE ORDER
ISSUED ON SEPTEMBER 21ST 2023 IS
THE ONE MAJOR ELEMENT THAT WE
CAN POINT TO IN ORDER TO
PROMULGATE THE EMERGENCY
REGULATIONS, SO I WANTED TO A
LOT OF DIFFERENT TERMS THERE,
BUT I WANTED TO CLARIFY THAT.
THANK YOU. THANK YOU, MR
MARTINEZ. OKAY I WILL TURN IT
OVER NOW TO SENATOR DODD. THANK
YOU VERY MUCH. I'VE GOT A
MEETING BACK IN THE MY DISTRICT,
SO I'M GONNA HAVE TO GET GOING.
BUT I REALLY APPRECIATE THE
INSURANCE COMMISSIONER, I THINK
TWICE MAKE THE COMMITMENT. NOT
ONLY WOULD THE REGS BE DONE, BUT
THEY'D BE IMPLEMENTED BY
DECEMBER. 24 TO ME. THAT IS A
BIG DEAL. YOU KNOW, I'VE BEEN
TELLING CONSUMERS AND WE DIDN'T
GET THIS PROBLEM OVERNIGHT. WE
DON'T HAVE CONTROL OVER ALL THE
VARIABLES AND WE'RE NOT GOING TO
GET OUT OVERNIGHT, BUT I THINK
THIS SETS A TIMETABLE THAT
PERSONALLY I'M SATISFIED WITH,
BUT I LIKE ONE MORE COMMITMENT.
IF WE COULD GET IT IF YOU START
FALLING BEHIND ON THESE GOALS TO
LET OUR INSURANCE COMMITTEE
CHAIRS OR THE INSURANCE
COMMITTEE MEMBERS KNOW SO THAT
WE'RE AWARE OF ALL TIME. WHAT'S
GOING ON HERE? BECAUSE WE'RE UH,
APPRECIATIVE OF THIS MOVEMENT,
BUT I THINK IT'S A TRUST BUT
VERIFY TYPE OF SITUATION WHERE
WE HAVE SO MANY CONSTITUENTS
THAT ARE IN HARM'S WAY. WE JUST
HAVE TO DO THIS. I DON'T THINK
IT'S A INSULT ON THE INSURANCE
COMMISSIONER, THE OFFICE OR
ANYTHING. IT'S JUST DOING OUR
DUE DILIGENCE. I APPRECIATE
VERY, VERY MUCH. UH WHAT YOU
BROUGHT FORWARD TODAY? THANK YOU
. THANK YOU, MADAM CHAIR FOR
HOLDING THIS, UH, INSURANCE
HERE. I APPRECIATE THAT. THANK
YOU, SENATOR DOT ANYBODY ELSE
ALTERNATIVE ROUTE TO SENATOR
MARIE ALFREDO GIL. THANK YOU SO
MUCH. I'LL KEEP MY QUESTION.
BRIEF COMMISSIONER, YOU
MENTIONED THE WOY OR THEIR
WILDLAND URBAN INTERFACE AREA.
THAT WAS A NEW TERM FOR ME
COMING INTO THE INSURANCE
COMMITTEE, BUT NOT NEW TO THE
IMPACT, SO I'M REALLY LOOKING TO
UNDERSTAND AND FURTHER CLARIFY
THAT. WHAT ARE THOSE? WHAT ARE
THOSE PARAMETERS THAT ARE BEING
ESTABLISHED TO ENSURE THAT THOSE
WHO LIVE WITHIN THE WUI THOSE
WILDLAND URBAN INTERFACE AREAS?
THOSE ARE THE CONSUMERS THAT ARE
MOST DEVASTATED BY THE CRISIS
THAT WE ALL AGREE WE ARE IN A
STATE OF EMERGENCY. UM HOW CAN
WE MAKE SURE THAT THE FOCUS OF
RELIEF WILL HIT THOSE IN THE
WORLD? WE FIRST FIRST OF ALL THE
MARIJUANA ABSOLUTELY RIGHT.
WELCOME TO INSURANCE. SPEAK 101.
UNFORTUNATELY, WE ALL HAVE TO
BECOME INSURANCE EXPERTS NOW, UH
, MY GOAL IN PROMULGATING THESE
NEW REGULATIONS IS THAT YOUR
DISTRICT IS TARGETED AND
PRIORITIZE. UH, AS SO MANY OF
THOSE SENATE DISTRICTS THAT HAVE
BEEN DISPROPORTIONALLY IMPACTED
BY THESE WILDFIRES NOW WE'VE
ALSO SEEN THAT THESE INSURANCE
CRISIS HAS EXPANDED BEYOND. THE
WUI AND IN SOME OTHER
COMMUNITIES. THAT'S WHAT WE CALL
THOSE DISTRESSED AREAS. HAVE
MICHAEL MARTINEZ FROM MY TEAM?
UH KIND OF LAYOUT. THE PROCESS
BY WHICH WE ARE DETERMINING
THOSE DISTRESSED AREAS BUT KNOW
THAT YOU HAVE MY WORD AFTER
TRAVELING TO ALL THE COUNTIES IS
PARTICULARLY OTHER COUNTIES
AROUND THE SIERRAS. THAT MY GOAL
IS TO MAKE SURE THAT THOSE
COUNTIES ARE THE ONES THAT
PRIORITIZED YES, I SENATOR DAHLE
SO YES, IN REGARD TO WHAT THE
COMMISSION AND STATE OF THE
DISTRESSED AREAS AND ALSO AGAIN
WOULD BE REMISS IF I DIDN'T
POINT OUT MY COLLEAGUE HERE.
LUCY WEIGHING. SHE IS ALSO A
DEPUTY COMMISSIONER AND SPECIAL
COUNSEL TO THE COMMISSIONER, AND
SHE IS ALSO HELPING TAKE A HUGE
LEAD IN THIS ENTIRE REGULATORY
EFFORT. AND SO SHE AND I, WITH
MANY OTHERS, OR SEVERAL HERE IN
THE DEPARTMENT HERE IN THIS ROOM
AND THEN BEYOND THAT THAT WE ARE
ALL HANDS ON DECK ON THIS AND SO
AN ELEMENT OF THIS ENTIRE
FRAMEWORK IS, UM, IS THE
FOCUSING ON DISTRESSED AREAS AND
THE WAY THAT IT WILL BE
GENERALLY BE LOOKED AT, AND WE
HAVE BEEN HAVING CONVERSATIONS.
I KNOW YOUR STAFF. WE'VE AROUND
BASEMENT TO YOUR EARLIER. POINT
IS THAT THE SPEED DIAL SPEED ALL
TOO MANY FOLKS HERE AT THE
DEPARTMENT? ABSOLUTELY. FOR YOU
AND YOUR STAFF, UM THAT WE WOULD
BE LOOKING TO FURTHER
CRYSTALLIZE WHAT A DISTRESSED
AREA MEANS AND LOOKS LIKE AND SO
IN THIS OVERALL AGAIN THE
FRAMEWORK THAT WE HAD WORKED OUT
LAST FALL IS THAT WE WOULD BE
LOOKING AT AND THIS IS CONTINUED
SUBJECT TO, UM I DON'T KNOW,
PUTTING TOGETHER ON PAPER HAVING
ITS SUBJECT TO FURTHER
CONVERSATIONS. PUBLIC INPUT
BECAUSE WE WANT TO AGAIN HAVE
HAVE INPUT FROM ALL OF YOU FROM
FROM INTERESTED STAKEHOLDERS. OF
WHAT THE DEFINITION IF YOU WILL,
WHAT DISTRESSED AREA IS. THE
COMMISSIONER STATED THAT IN AREA
A DISTRICT SUCH AS YOURS WOULD
ABSOLUTELY BE BE AN AREA THAT
WOULD BE PRIME TO BE INCLUDED AS
A DISTRESSED AREA. AGAIN WE WANT
TO LOOK AT THE FAIR PLANNED DATA
WE WANT TO LOOK AT. WE WANT TO
BE VERY THOUGHTFUL AND OBJECTIVE
AND HOW WE GET TO WHAT THAT
DEFINITION IS OF A DISTRUST AREA
BECAUSE IN TURN, WHAT COMES FROM
ONCE THAT THE METHODOLOGY THE
DEFINITION THAT THE CREATION OF
THE DISTRESSED AREA FROM THERE
THEN THAT IS ESSENTIALLY THE
PRIORITIZED LIST. IF YOU WILL
THAT ADMITTED ADMITTED MARKET
WOULD BE LOOKING AT IN ORDER TO
AH HAVE AS PART OF THAT YOU
HEARD EARLIER IN THE
COMMISSIONER'S COMMENTS IS THAT
THAT NO LESS THAN 85% OF AN
ADMITTED CARRIERS, FOOTPRINT
INSURANCE POLICYHOLDERS, THEIR
FOOTPRINT WOULD BE LOCATED IN
THE THESE DISTRESSED AREAS. AND
SO IT'S SOMETHING WHERE, UH,
CREATING THAT DEFINITION WE WANT
TO AGAIN, HAVE IT BE SUBJECT TO
FOR PUBLIC INPUT. AND THEN ONCE
THAT DEFINITION IS A METHODOLOGY
IS CREATED AND WE WOULD WEAVE
THAT IN AS WE MOVE FORWARD WITH
THE RATE FILINGS WITH REGARD TO
THE CONVERSATIONS WITH THE
ADMITTED MARKET AND IN TURN HAVE
IT BE SUBJECT TO, AS THE
COMMISSIONER STATED IF IT
ADMITTED CARRIER. UH IT WANTS.
TO UTILIZE CATASTROPHIC MODELING
AND OR THE NET COST OF
CALIFORNIA ONLY REINSURANCE IN
THEIR RATES THAN THEY WOULD BE
SUBJECT TO LOOKING AT THE
DISTRESSED AREAS, WRITING AGAIN,
NO LESS THAN 85% IN THE
DISTRESSED AREAS OF THE STATE OF
CALIFORNIA, AND THEN AGAIN, IT
WE WOULD BE AS THE REGULATOR
ENSURING THAT THAT THAT THEY
HOLD THEIR THEIR PART OF THE
DEAL. YES OF COURSE. JUST A
QUICK FOLLOW UP QUESTIONS. SO
THANK YOU SO MUCH FOR THAT
INFORMATION. YOU TALKED ABOUT
FAIR PLAN DATA AND THE
PRIORITIZED LIST AND I JUST
ENCOURAGE YOU TO MAKE THAT DATA
AVAILABLE TO OUR CHAIR AND TO
THIS COMMITTEE, AS OUR CHAIR
SEES FIT AS WELL, UM AND THEN,
JUST IN THE SPIRIT OF
PARTNERSHIP IS CAN YOU JUST
SPEAK BRIEFLY ON HOW THE HOW WE
ARE BRINGING IN, UM THE VOICE
AND THE URGENCY OF OUR INSURANCE
CARE. HERE IS TO ENSURE THAT
THESE GOALS ARE ATTAINABLE FOR
THEM. AND THE TIMELINE THAT
WE'RE BUILDING IS ALSO KIND OF
BRINGING IN THAT PARTNERSHIP AND
THAT COMMITMENT THANK YOU,
SENATOR ABROAD A GIRL. I'LL TELL
YOU THAT AFTER MONTHS OF
DIALOGUE, UH, I DON'T THINK
THERE'S BEEN ANOTHER INSURANCE
COMMISSIONER. THAT'S BROUGHT IN
ALL THESE NOT ONLY INSURANCE
CONSUMERS, BUT INDUSTRY LEADERS
AND TRADE ASSOCIATIONS INTO
THESE CONVERSATIONS. THE LAST
THING THAT I WANT TO DO IS WORK
ON A DEAL THAT THEN IS NOT GOING
TO BE IMPLEMENTED BLE OR THAT
IT'S NOT GOING TO HAVE AN IMPACT
IN TERMS OF INSURANCE COMPANIES
GROWING THEIR BUSINESS ONCE
AGAIN. CALIFORNIA AND SO WE
WE'VE BEEN GETTING WE'VE BEEN
DOING THIS CONVERSATIONS. WE'VE
BEEN HAVING THESE CONVERSATIONS
CONSTRUCTIVELY WITH ALL
STAKEHOLDERS, AND WE'RE GOING TO
CONTINUE TO DO SO. AND JUST AS
SENATOR DODD I KNOW HE MIGHT
HAVE LEFT. BUT I GIVE YOU GIVE
YOU MY WORD THAT WE'RE GOING TO
CONTINUE TO HAVE THESE DIALOGUES
AND KEEP THE LEGISLATURE UH,
APPRISED OF OUR PROGRESS. UM AND
YOU KNOW, SENATOR RUBIO CAN TELL
YOU WERE ON THE PHONE MOSTLY
ALMOST EVERY OTHER DAY, AND WITH
HER TEAM THAT WE'RE SO GRATEFUL
THAT WE HAVE THIS PARTNERSHIP SO
THAT WE CAN REALLY CLOSE THIS
OUT. HOPEFULLY UH, CLOSE THIS
OUT BY THE END OF THE YEAR IN
DECEMBER. SO YOU HAVE MY WORD
WHERE I CONTINUE TO KEEP YOUR
BREASTS WERE WORKING WITH
INDUSTRY. WE'RE WORKING WITH ALL
STAKEHOLDERS. UM THIS ALL WOULD
BE IN VAIN IF THE INDUSTRY FEELS
THAT, UM UH, THEY CAN IMPLEMENT
ANY OF THESE THINGS OR OR OR THE
THINGS THAT WE'RE IMPLEMENTING
ARE NOT GOING TO WORK TO GET
THEM TO GROW THEIR BUSINESS IN
CALIFORNIA. I KNOW MANY OF THEM
ARE THERE AND MAYBE THEY CAN
EXPRESS THEIR THEIR THEIR
ATTITUDES TOWARDS THIS STARTING
PUBLIC COMMENT. ANY OTHER
COMMENTS. OKAY THANK YOU. WELL I
REALLY JUST WANT TO TAKE THE
TIME TO THANK THE INSURANCE
COMMISSIONER. AND HIS STAFF ARE
COMING AND EVERYONE THAT JOINED
US TODAY. I JUST WANT TO POINT
OUT A FEW THINGS, YOU KNOW, I
BELIEVE MY VICE CHURCH STATED
THAT SOME PEOPLE BELIEVE THAT
WE'RE NOT IN A REAL CRISIS AND
THAT THIS INSURANCE ISSUE HAS
BEEN MADE UP, AND IT'S MADE UP
BY THE INSURANCE COMPANIES. I
MEAN, I JUST WANT TO POINT OUT
THAT THERE ARE BUSINESS THEY'RE
IN THE BUSINESS OF MAKING
BUSINESS SO THERE'S NO WAY THAT
SOMEONE WOULD STOP WRITING
INSURANCE, BECAUSE THAT'S HOW
THEY GET PAID. AND SO I'M KIND
OF SET THAT THAT'S KIND OF OUT
THERE BUT THAT WILL INSURANCE
COMMISSIONER LARA I WANT TO
THANK YOU. I KNOW IT'S NOT A
PERFECT SOLUTION, AND EVERYONE
WOULD WANT TO TWEAK IT, BUT I
THINK THIS IS THE BEST SOLUTION
FOR RIGHT NOW. AND I THINK THAT
AT THE END OF 2024 SEEMS SO FAR
AWAY. BUT WE'VE BEEN DEALING
WITH THIS CRISIS FOR A LONG,
LONG TIME. AND THIS IS BETTER
THAN WHAT WE HAD BEFORE. BUT I
DO WANT TO JUST ENCOURAGING TO
SEE WE CAN PUSH A LITTLE HARDER
TO GET US THERE A LITTLE FASTER.
UM AND TO PIGGYBACK ON WHAT
SENATOR DOT SAID, IF THERE IS A
TIME WHERE YOU RUN INTO A
SITUATION WHERE YOU NEED THE
LEGISLATURE'S HELP, PLEASE COME
TO US. I KNOW FUNDING FOR YOU IS
GOING TO BE KEY TO CONTINUE TO
ONBOARD YOUR STAFF THE WORKFORCE
TO MAKE SURE THAT YOU HAVE WHAT
YOU NEED. AND THAT, YOU KNOW, WE
DON'T PUT OUT THINGS THAT ARE
NOT ATTAINABLE. SO AT ANY TIME
YOU NEED OUR HELP, PLEASE REACH
OUT TO US BECAUSE WE'RE HAPPY TO
PUSH ON THEIR END BECAUSE I
THINK THAT THIS IS SOMETHING
THAT OUR CONSUMERS ARE, OF
COURSE, IS GETTING LOUDER AND
LOUDER. AND AS I SAID,
PREVIOUSLY, WHEN YOU AND I HAVE
HAD THESE CONVERSATIONS, WE
ALWAYS START WITH CONSUMERS AND
WE END OUR CONVERSATIONS WITH
CONSUMERS. SO I HOPE THAT OUR
CONSUMERS OUT THERE ARE
LISTENING HOUR TRYING TO FIGURE
OUT A WAY THAT IT'S SUSTAINABLE
LONG TERM. IT'S NOT A SOLUTION
THAT WE CAN JUST FIX NOW AND
THEN IT FALLS APART LATER. FOR
ME. A BIG PIECE OF THIS IS THE
HOUSING INDUSTRY. I HEAR IT FROM
REALTORS WHO HAVE DEALS ON THE
TABLE, AND THEN THEY FALL APART
BECAUSE THEY CAN'T GET
SOMETHING, UM, ADEQUATE, BUT I
ALSO HEAR THE INSURANCE INDUSTRY
. YOU KNOW, THEY'RE THEY'RE
TRYING TO COME TO THE TABLE.
THERE'S ALSO SOME CONCERNS THERE
. BUT I KNOW WHAT I KNOW NOW IS
THAT YOU'VE DONE A GREAT JOB
INSURANCE COMMISSIONER AND
BRINGING ALL THE STAKEHOLDERS TO
THE TABLE. AND MAYBE NOT.
EVERYONE WILL AGREE 100% BUT I
THINK IT'S A IT'S A GOOD WAY TO
START. I'VE NEVER SEEN CONSUMERS
INDUSTRY INSURANCE COMMISSIONER
AND EVERYONE IN BETWEEN COME
TOGETHER AT LEAST TO HAVE A
CONVERSATION. THAT'S YIELDED
SOME SOME POSITIVE RESULTS. SO I
WANT TO THANK YOU FOR YOUR TIME.
I WANT TO THANK YOUR STAFF AND
TO EVERYONE FOR JOINING US TODAY
UNTIL THIS MEETING IS NOW
ADJOURNED. THANK YOU SO MUCH.
AT THIS TIME, WE WILL NOW MOVE
ON TO ANYONE WANTING TO PROVIDE
PUBLIC COMMENT. PUBLIC COMMENT
IS LIMITED TO ONE MINUTE, PLEASE
STATE YOUR NAME AND ALSO YOUR
AFFILIATION AS WELL. THANK YOU.
GOOD AFTERNOON, VICE CHAIR, OUR
MONTHLY CHINA REPRESENTING THE
FAIR PLAN. I JUST WANT TO GIVE A
QUICK UPDATE ON THE FAIR PLANTS
IS IT'S A TOPIC FOR THE SOUTH
PART OF THE TOPIC OF THIS
HEARING. UH SO THE FAIR PLAN IS
DOING ITS DUE DILIGENCE. IT IS
ALL HAVE ALL HANDS ON DECK FOR
THEM AS WELL. SOME NUMBERS I CAN
SHARE WITH YOU ON POLICIES. THEY
HAVEN'T THEY ARE NOW UP TO
350,000 PLUS POLICIES. UH
APPLICATIONS. UH, 2022. THERE
WERE ABOUT 300 APPLICATIONS A
DAY LAST YEAR, THERE WERE ABOUT
900 APPLICATIONS A DAY. UM, AS
FAR AS THE VOLUME OF CALLS THEY
RECEIVE ABOUT 50,000 CALLS LAST
MONTH. UH AS FAR AS BROKERS IN
NEW USERS OF THE FAIR PLAN, THEY
HAD REGISTERED 9000 REGISTERED
BROKERS. THEY'RE UP TO 40,000
BROKERS USING THE FAIR PLAN.
REAL QUICK WHAT THE FAIR PLAN IS
DOING TO MANAGE THE DEMAND. THEY
DID CHANGE THEIR OPERATORS
SYSTEM OR APPLICATION SYSTEM.
WORKING WITH THE DEPARTMENT
INSURANCE. THAT WAS A NECESSITY
THAT HAD TO BE DONE SO, UH, TO
MANAGE THE DEMAND. UNFORTUNATELY
WHEN YOU HAVE NEW DEMAND AND
INCREASED DEMAND AND YOU SYSTEM
AND NEW USERS IT HAS LED TO
CUSTOMER ISSUES. AND I'M PLEASED
TO REPORT TODAY THAT FEW THIRDS
OF THAT CUSTOMER BACKLOG HAS
BEEN REDUCED FOR THE FAIR PLAN.
THEY CONTINUE TO WORK WITH D AND
CONSUMER SERVICES DIVISION.
THEY'VE DOUBLED UP THEIR STAFF.
I THINK THEIR STAFFS AT LEAST
200 PLUS NOW, PLUS 8010 TO HELP
MANAGE THE DEMAND. ASK YOU TO
WRAP IT UP A LITTLE QUICK. THANK
YOU KNOW, BECAUSE THE DISCUSSION
WITH THE FAIR PLAN IS A BIG
TOPIC TODAY. UM BUT JUST KIND OF
WRAP. WRAP IT UP, PLEASE CLOSING
. I JUST WANT TO SAY THAT THEIR
PLAN IS PREPARED TO DO ITS PART
AND CONTINUE TO COLLABORATE WITH
THE CBI TO MOVE THIS SUSTAINABLE
INSURANCE STRATEGY FORWARD.
THANK YOU SO MUCH. THANK YOU.
SORRY SO THAT WAS JUST A LITTLE
EXTRA FOR THE FAIR PLANTS AS
THEY ARE THEIR MAIN TOPICS. SO,
BUT EVERYBODY ELSE, PLEASE. UH
IF YOU CAN HELP US STICK TO THE
ONE MINUTE GOT IT. THANK YOU.
THANK YOU, MADAM VICE CHAIR AND
MEMBERS SARIN TAYLOR ON BEHALF
OF THE PERSONAL INSURANCE
FEDERATION OF CALIFORNIA AND
REALLY JUST WANT TO THANK THE
COMMITTEE FOR ALL THE WORK YOU
GUYS HAVE DONE EVEN OVER THE
PAST FEW YEARS. I THINK YOU KNOW
WHAT WE'VE SEEN TODAY IS AMAZING
WHEN YOU THINK ABOUT WHERE WE
WERE SEVEN MONTHS AGO, AND THE
MARKETS SPIRALING AND WE HAD NO
SOLUTION IN SIGHT. AND NOW HERE
WE SIT. WE HAVE REALLY AGREEMENT
ON THE PROBLEM AND THE SOLUTION
WITH THE GOVERNOR, THE INSURANCE
COMMISSIONER, KEY CONSUMER
GROUPS, THE INDUSTRY. UM IT'S
REALLY REMARKABLE PROGRESS IN A
SHORT TIME, AND THAT'S THANKS TO
ALL THE WORK THAT EVERYONE'S
DOING HERE ALSO WANT TO
RECOGNIZE THE GREAT
COLLABORATION FROM THE
DEPARTMENT AND THE COMMISSIONER
AND HIS TEAM. WE LOOK FORWARD TO
CONTINUING TO WORK WITH THEM TO
IMPLEMENT HIS STRATEGY, AND WE
ARE OPTIMISTIC THAT THIS WILL
RESULT IN INCREASED AVAILABILITY
AND RELIABILITY FOR CALIFORNIANS
AND PIFF IS COMMITTED TO BE IN A
FULL PARTNER IN THIS PROCESS, I
THINK THANK YOU. THANK YOU,
MADAM VICE CHAIR LARA CURTIS ON
BEHALF OF THE AMERICAN PROPERTY
CASUALTY INSURANCE ASSOCIATION.
JUST WANT TO START OFF BY
THINKING THIS COMMITTEE FOR
HOLDING THIS HEARING AND REALLY
BEING COMMITTED TO PROVIDING
STABILITY AND AVAILABILITY FOR
THE INSURANCE MARKET.
CALIFORNIA'S OUTDATED INSURANCE
FRAMEWORK IS FAILING FAMILIES
AND CONSUMERS. WE COMMEND
COMMISSIONER LARA FOR HIS WORK
AND TAKING STEPS TO ADDRESS THIS
CRISIS, BUT AS YOU KNOW, URGENT
ACTION IS STILL NEEDED. FOR TO
ENACT REGULAR REFORMS TO RESTORE
THE INSURANCE MARKET AND
SAFEGUARD CONSUMERS ACCESS TO
COVERAGE. THIS INCLUDES
STREAMLINING THE RATE MAKING
PROCESS AND ELIMINATING
OBSTACLES THAT HAVE LED TO THIS
CRISIS. WE REMAIN COMMITTED TO
WORKING WITH COMMISSIONER LARA,
THE GOVERNOR AND LEGISLATIVE
LEADERS TO PROMOTE COMPREHENSIVE
REFORMS TO ENSURE ALL
CALIFORNIANS HAVE ACCESS TO
INSURANCE. THANK YOU. THANK YOU.
GOOD AFTERNOON VICE CHAIR AND
SENATORS THAT ARE STILL HERE.
PETER ANSEL FROM THE CALIFORNIA
FARM BUREAU JUST WANTED TO SAY
THANK YOU FOR CONTINUING TO LEAN
INTO THIS ISSUE. WE APPRECIATED
THE WORK WE DID WITH SENATOR
RUBIO LAST YEAR ON SENATE BILL
505 AND WORK WE'RE DOING WITH
SENATOR ALVARADO GIL THIS YEAR
IN THE SPACE. UM IT'S AN
IMPORTANT ISSUE FOR OUR MEMBERS
THERE. DIRECTLY IMPACTED BY, UH
BY WILDFIRE AND BY THE IMPACTS
THAT COME FROM THAT, INCLUDING
THEIR INSURANCE AVAILABILITY AND
THEIR ABILITY TO RUN FARMING
BUSINESSES, AND SO THANK YOU FOR
JUST CONTINUING TO KEEP A FOCUS
ON IT. AND THANK YOU ALSO TO
COMMISSIONER LARA FOR THE WORK
THAT HE'S DONE. WE APPRECIATE
THE WORKING RELATIONSHIP WE HAVE
IN THE ACCESS TO THE INSURANCE
COMMISSIONER'S OFFICE AS A LARGE
CONSUMER GROUP AND PURCHASER OF
INSURANCE POLICIES AFTER WATER
THE SECOND MOST IMPORTANT ISSUE
FOR MEMBERS, SO JUST HERE TO SAY
, KEEP LEANING INTO IT. IT
MATTERS TO OUR FOLKS. THANK YOU.
THANK YOU. THANK YOU, MADAM VICE
CHAIR, DAN DONE MORE WITH THE
CALIFORNIA BUILDING INDUSTRY
ASSOCIATION. JUST WANT TO ECHO
THE CHAIR'S COMMENTS AS WELL. WE
REPRESENT THE COMPANIES THAT
BUILD NINE OUT OF 10 HOUSING
UNITS IN THE STATE. 130,000 OF
OUR CONSUMERS NEED INSURANCE TO
BUY HOME. TODAY WE STILL ARE NOT
BUILDING CONDOMINIUMS AND MOST
OF THE STATE BECAUSE OF THIS
INSURANCE CRISIS. SO FOR US,
IT'S A VERY REAL CRISIS AND REAL
FOR OUR CONSUMERS. WE SUPPORT
THE COMMISSIONER'S PLAN. 100% WE
HAVE NO ISSUES WITH THE STRATEGY
THAT HAS THE ONLY ISSUE WE HAVE
AT ALL. IF ANYTHING IS TIMING,
SO WE WOULD LOVE FOR THE FAIR
PLAN 20 MILLION PER STRUCTURE TO
BE DONE AS SOON AS POSSIBLE. WE
COULD HAVE USED IT SIX MONTHS
AGO. UM AND IF THERE IS NO
LEGISLATION, EITHER WE'RE NOT
TRYING TO CREATE IT. BUT IF
THERE IS ANYTHING WE WOULD
SUPPORT AND WORK WITH THE
COMMISSIONER ON THAT. LAST THING
I WOULD SAY IS JUST UNDERSTAND
WHEN THE COMMISSIONER RAISES
RATES 30% FOR PICKED COMPANY'S
NAME. LET'S SAY THE HARTFORD WHO
LEFT THE MARKET YESTERDAY. THAT
IS SO MUCH BETTER FOR OUR
CUSTOMERS BECAUSE THEY'RE BEING
OFFERED 6900% MORE IN ENGLAND,
SO TO TAKE NO ACTION IS BAD FOR
CONSUMERS. SO AGAIN, THE
COMMISSIONER. THANK YOU, MADAM
VICE CHAIR. THANK YOU. HELLO
COMMITTEE MEMBERS. MY NAME IS
CARMEN BALBER. I'M THE EXECUTIVE
DIRECTOR OF CONSUMER WATCHDOG
AND I HAVE TO SAY YOU ABDICATED
YOUR OVERSIGHT RESPONSIBILITY
TODAY BECAUSE NO ONE ASKED THE
COMMISSIONER THE MOST IMPORTANT
QUESTION, WHICH IS WHETHER THE
85% COMMITMENT THAT ENSURES
MOVED BACK INTO DISTRESSED AREAS
IN CALIFORNIA WILL ACTUALLY MEAN
ACCESS TO REAL AFFORDABLE,
COMPREHENSIVE HOME INSURANCE FOR
CALIFORNIANS. AND ALL
INDICATIONS ARE THAT IT WILL NOT
BECAUSE THE COMMISSIONER BASED
HIS PLAN ON THE LEGISLATION THAT
WAS CIRCULATING BUT DIDN'T PASS
LAST YEAR IN AUGUST. THAT PLAN
ALLOWED INSURERS TO MEET THEIR
COMMITMENT BY SELLING A FAIR
PLAN EQUIVALENT POLICY, WHICH IS
HIGH COST, LOW BENEFIT AND NOT
WHAT ALL OF YOUR CONSTITUENTS
ARE CLAMORING FOR ACCESS FOR.
THAT'S THE FIRST QUESTION. YOU
SHOULD HAVE ASKED HIM. THE
SECOND QUESTION IS WHETHER HE
INTENDS TO WAIVE THAT COMMITMENT
FOR ANY INSURER WHO CAN'T MEET
IT. WHO SAYS THEY CAN'T MEET IT,
AND THAT'S THE OTHER LOOPHOLE
THAT WAS CONTAINED IN THE
LEGISLATION. AND WE CAN ONLY
ASSUME IS IN HIS PLAN BECAUSE HE
HASN'T CONTRADICTED IT. WE URGE
YOUR COMMITTEE TO MAKE THE
COMMISSIONER ANSWER THOSE
QUESTIONS. BECAUSE OTHERWISE
THERE'S A BIG BAIT AND SWITCH ON
CALIFORNIANS. THEY WILL NOT HAVE
ACCESS TO THE POLICIES THEY'RE
SEEKING. THANK YOU. MADAM CHAIR
AND MEMBERS JOHN NORWOOD ON
BEHALF OF THE INDEPENDENT
INSURANCE AGENTS AND BROKERS OF
CALIFORNIA ARE MEMBERS PLACE
INSURANCE WITH THE 90 OTHER
INSURANCE COMPANIES THAT PEOPLE
GENERALLY DON'T TALK ABOUT. AND
ALSO WITH SOME OF THE BIG 12, I
CAN ASSURE YOU THAT THOSE OTHER
90 COMPANIES ARE ON THE
SIDELINES RIGHT NOW AND HAVE
BEEN FOR WELL OVER A YEAR. ARE
SOME OF OUR BIGGEST MEMBERS HAVE
MAYBE ONE MARKET FOR HOMEOWNERS
INSURANCE IN THEIR SHOPS. AND
THESE ARE INTERNATIONAL
BROKERAGE FIRMS. SO OUR MEMBERS
ARE DESPERATE FOR A RETURN TO A
COMPETITIVE INSURANCE MARKET
WHERE JURORS IS AVAILABLE TO OUR
CUSTOMERS SO WE CAN SATISFY THE
NEEDS OF THOSE CUSTOMERS WERE
VERY SUPPORTIVE OF WHAT THE
COMMISSIONER IS DOING AND THE
DIRECTION IN WHICH THESE NEW
REGULATIONS ARE GOING AND WE'RE
HERE TO PROVIDE ANY ASSISTANCE.
WE CAN THANK YOU VERY MUCH.
THANK YOU. ANY OTHER PUBLIC
COMMENTS? SEEN IN. I WON AGAIN
ON BEHALF OF THE CHAIR. THANK
EVERYONE FOR YOUR PARTICIPATION
IN CORROBORATION. WE HAVE NOW
CONCLUDED THE AGENDA AND THE
SENATE INSURANCE COMMITTEE IS
NOW ADJOURNED. THANK YOU.