SACRAMENTO, Calif. – Governor Gavin Newsom signed an executive order making changes intended to improve the California insurance marketplace on Thursday.
The executive order directs Commissioner of Insurance Ricardo Lara to commit to the following goals:
- Expand coverage choices for consumers, especially in underserved regions, and maintain long-term availability of homeowners and commercial property insurance coverage
- Improve the efficiency and transparency of the rate approval process as well as factor in the promotion of a competitive and robust insurance marketplace
- Maintain solvency of the FAIR Plan to protect current policyholders and promote long-term resiliency in the face of climate change
- Direct the Department of Finance to consult with the California Department of Insurance to support the rulemaking process and accelerate implementation of potential regulations
In 1988, California voters enacted Proposition 103 creating a robust set of consumer-centered protections governing insurance rates offered in the state.
Those uncommon protections for insurance purchasers coupled with rapid recent changes in the climate, have led to notable departures and pauses on accepting new customers from major insurers.
Insurers buttressed by these twin stressors began leaving the state or halting adding new policies to their ledgers and this led to the consideration of altering insurance rules in exchange for adding customers who otherwise would not be insured.
Since 2018, California has experienced the seven largest wildfires in state history, including the single deadliest and most destructive wildfire ever recorded within its borders.