But Lara found common ground with a major U.S. insurer’s CEO at a first-of-its-kind summit held in Los Angeles on Wednesday.
Other insurance commissioners, government officials, insurance industry representatives, nonprofits and academics from around the nation and world gathered for the Global Sustainable Insurance Summit this week — in a state where residents are dealing with higher premiums for homeowners and auto insurance, with some of them finding it tough to get insured at all.
When Lara asked Farmers Insurance CEO Raul Vargas what it would take to get insurers to start writing policies in California again after they stopped or delayed new business, Vargas pointed to one of the regulations Lara unveiled recently: allowing insurers to use catastrophe modeling when setting their rates. Catastrophe modeling would let insurers use future risk assessments combined with historical data to help price their premiums.
“Insurers need the confidence to price correctly for the risk,” Vargas said, adding that Farmers has had “constructive conversations” with California’s Insurance Department that has allowed the company to remain in the state.
It is notable that the CEO of a major U.S. insurance company publicly expressed support for Lara’s plan. Insurance trade groups have mostly been speaking on behalf of insurers so far about the insurance situation in the state — which has forced many homeowners to turn to the last-resort FAIR Plan.
FILE – A firefighter hoses down hot spots from a home in the aftermath of the Coastal Fire on May 12, 2022, in Laguna Niguel, Calif. Two insurance industry giants have pulled out of the California marketplace, saying that wildfire risk and the soaring cost of construction prompted them to stop writing new policies in the nation’s most populous state. (AP Photo/Marcio Jose Sanchez, File)
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