Gov. Gavin Newsom has proposed legislation to speed up insurance premium rate reviews as he and the Insurance Department try to fix the state’s battered insurance market.
Last fall, Newsom issued an executive order tasking Insurance Commissioner Ricardo Lara with fixing home and fire insurance availability and affordability as insurers — citing rising wildfire risk and pandemic-induced inflation, and complaining about having to wait too long to get their requests for rate increases approved by the state — were canceling homeowner policies and halting the writing of new ones in California.
Homeowners continue to have trouble obtaining or hanging onto affordable insurance. From September through March, more than 45,000 of them have had to turn to the FAIR Plan, which is supposed to be an insurer of last resort for fire insurance. The plan provides limited coverage at high prices, so some homeowners have chosen to forgo fire insurance because they can’t afford their premiums, which in some cases have tripled or more.
Lara has been rolling out a plan to address the insurance market problems, which is expected to take effect by the end of the year. But Newsom said at a press conference earlier this month that “We’ve got to move it. We’ve just got to do more.”
Hence the bill he released Tuesday night, which is tied to the state budget and may not get as much scrutiny as other bills this late in the legislative session, needs only a simple majority vote in the state Legislature and would take effect immediately after the governor signs it.
It builds on the part of Lara’s plan that makes changes to the process of approving insurance rate increases. The bill would add language to the insurance code that tightens the timeline of the review process,…
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