Governor Newsom Signs Executive Order to Strengthen Property Insurance Market
WHAT TO KNOW: The executive order urges Insurance Commissioner Lara to take swift action to address issues with the insurance market and expand coverage options for consumers, while maintaining strong consumer protections and keeping plans affordable.
SACRAMENTO, CA (September 21, 2023) – As climate change continues threatening our communities with more extreme wildfires, floods and droughts, state insurance markets throughout the country have faced significant disruption. Governor Gavin Newsom is urging Insurance Commissioner Ricardo Lara to take action to stabilize and improve California’s property insurance marketplace.
Some companies have already announced they will stop issuing new policies in California. Others are limiting policy renewals. We can expect more of this to come in the short term. That is why it is critical for the Insurance Commissioner to act quickly to help stabilize the state’s marketplace, while maintaining consumer protections and fair rates.
What Governor Newsom said: “This is yet another example of how climate change is directly threatening our communities and livelihoods. It is critical that California’s insurance market works to protect homes and businesses in every corner of our state. A balanced approach that will help maintain fair prices and protections for Californians is essential. I look forward to continuing to work with Commissioner Lara and others to strengthen our marketplace and protect Californians.”
A copy of the executive order can be found here.
This executive order requests that the Commissioner of Insurance take swift regulatory action to strengthen and stabilize California’s marketplace, with the following goals:
- EXPAND CHOICES, STABILIZE MARKET. Expand coverage choices for consumers, particularly in underserved areas of the state. Maintain the long-term availability of homeowners and commercial property insurance coverage.
- BETTER RATE APPROVAL PROCESS. Improve the efficiency, speed, and transparency of the rate approval process. Tailor the rate approval process to account for all factors necessary to promote a robust, competitive insurance marketplace.
- STRONGER FAIR PLAN. Maintain the solvency of the FAIR Plan to protect its policyholders and promote long-term resiliency in the face of climate change, including by identifying mechanisms to reduce its share of the overall market in underserved areas and move its customers into the admitted insurance market.
- ACCELERATE IMPLEMENTATION. Direct the Department of Finance to consult with the California Department of Insurance to support the rulemaking process and help accelerate implementation of potential regulations.