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The weather could not be better -or worse.
The terribly destructive and deadly wild fires in Los Angeles erupted in January, just when the historic and very controversial repair of the commissioner on the insurance part of how insurers calculate the premiums of premiums, it was entry into forceS
On the one hand, the disaster chased away the insurance industry’s claim that California’s tendency to such catastrophes creates huge potential losses that cannot be provided without changes in the speed system.
However, as victims of fire poured insurers with claimsLara encountered pressure to reduce companies that minimize or delay settlement payments. In the meantime, his critics accuse him of being too cozy with the industry he regulates, such as Article in the Los Angeles Times Detailed this week.
That is, to say soft, the situation of the draple.
Lara, a former state legislator, who was elected as an insurance commissioner in 2018, has begun to draw up his new regulatory plan in response to decisions of major insurers to reduce policies in California – or even leave the state completely – due to seemingly endless waves from destructive destructive wild fires.
They claimed that California’s long -standing premium calculation system, based on past experiences, was insufficient. They wanted to include evaluations in the future exposure and the cost of receiving reinsurance to relieve their losses in the process.
Lara included these changes to her plan, but only if the insurers were more likely to write policies in a fire-prone regions.
“Giving more people’s choices is how we will resolve California’s insurance crisis,” Lara said when he released Details of the planS “For the first time in history, we require insurance companies to expand where people need help most. With the changing climate, we can no longer look at the past. We are innovative and promising to protect Californians’ access to insurance. “
It has sparked sharp criticism from consumers, the organization of Southern California, which wrote the 1988 vote measure, which makes the position of the insurance commissioner elective and increasing regulatory powers. The group has been bumping from Lara since he was elected, accusing him of taking money from the campaign from insurers and not aggressive supervision of their operations.
The group had benefits beautifully from “intervention fees” In cases of setting up tariffs awarded by previous commissioners. Lara is less generous, even though The organization received $ 643,530 In 2024, 100% of the awards for the year.
Los Angeles fires forced Lara to juggle her long -term efforts to stabilize the insurance market with immediate answers to questions arising from the disaster.
Lara authorizes insurers to impose evaluations on their policies to reduce the shaky finances of California’s fair planThe last moat system that covers property owners who cannot get coverage from the regular market, which has a huge increase in applications.
However he refused to immediately approve a request from the state farmThe largest insurer in California, to increase the emergency rates of 22%, saying that the company should prove the need.
If nothing else, Los Angeles fires emphasized the absolutely vital role of a healthy insurance market – not only in the protection of investment that Californians have in their homes and business, but also as a key component in the purchase and sale of real estate. The creditors simply will not issue mortgages for property, which is uninsured.
The insurance commissioner must, of course, protect the interests of consumers, but one of these interests is a healthy insurance market, and the parallel duty makes the insurance profitable enough to keep insurers ready to do business in California.
Whether the major repair of Lara’s percentage will fulfill both imperatives remains uncertain. At least he deserves the credit for trying to fix a dysfunctional system after the legislature and governor Gavin Newo worship and gave him the task.
