SACRAMENTO, California — California Insurance Commissioner Ricardo Lara on Wednesday proposed restricting the role of outside intervenors in new amendments to his proposal to allow property insurance companies to use forward-looking models to set their rates.
What happened: Under the new amendments, outside groups would only get compensation for participating in the review of the models an insurer wants to use after the review is done. The amendments also say intervenors can’t get compensated for participating in the review of rates if they’ve already gotten compensated for reviewing the model being used.
Another amendment would add nature-based flood risk reduction to the strategies a catastrophe model should take into account, reflecting Lara’s interest in rising flood risk in California. The list already includes forest management, prescribed fire and risk mitigation undertaken by utility companies.
Why this matters: As property insurers flee the state’s record wildfire losses, angsty voters have increased their political pressure on elected officials. The heart of Lara’s proposed reform, first previewed over a year ago and published as a proposed rule in August, would allow most property insurers to use forward-looking catastrophic modeling to determine rates but only if they show they are writing more policies in disaster-prone areas.