The regulator stops Big California Home Insurance Insuran

California Insurance Commissioner Ricardo Lara today rejected the request of the state farm for “emergency” increase of the rate, creating what could be a very subsequent outcome with the most large insurer in the country – and contradicts the recommendation of its employees.

Lara, who calls on insurance companies to write policies in the country again, despite increasing fire risks, according to a letter to state farms leaders that she needs more information before he can approve an increase. He asks them to appear personally before him on February 26 at the office of the Okland Insurance Department to answer his questions at an “informal conference”.

“It is the burden on the state farm to demonstrate that temporary relief is justified in the circumstances,” the commissioner said in his letter. “My goal is to make sure that the policies owners do not have to pay more than is required. In the light of the latest fires in Los Angeles, State Farm customers need real answers about why they were asked to pay more and what responsibility the company’s management takes to acquire its financial home. “

“State Farm customers need real answers to why they are asked to pay more and what responsibility the company’s management takes to expel their financial house.”

Ricardo Lara, California Insurance Commissioner, in a letter denying the state farm’s request for “emergency” increase in home insurance policies

Last week, the company demanded intermediate rates increased an average of 22% for housing owners, saying it has already paid $ 1 billion in Los Angeles County Fires and is expected to pay much more. He wanted to be able to gather bonuses starting in May.

Before making the interim request, the State Farm was waiting for the insurance department to approve its requests for an increase in the percentage of last year.

Lara admitted in the letter that his staff recommended last week that he approved the company’s request, but said “my main responsibility is to California people.”

In his letter among the things Lara wants, they are an explanation of what has changed between the state farm’s request last summer and now; What else does the company do to improve its financial situation, except to raise the rates; And whether the state farm’s mother company will be able to intervene to help. The Commissioner also asks how the company’s request will influence his decision for 2023 to continue to write new policies In California, followed by its decision last year not to renew the policies of tens of thousands of customers in the country.

Lara mentions in the letter that with the approval of its department the company received an increase in the rate of 6.9%, 6.9% and 20% in 2022, 2023 and 2024, respectively. “In the absence of catastrophic losses wireless fire in 2022 and 2023, how does the state farm explain the significant reduction in its surplus of policies?” He asks.

Dan Krause, CEO of the State Farm General Farm, the California Group of the State Farm, said in a letter to Lara on February 3, that the company has nearly 3 million policies in the state, including 1 million homeowners. He asked the Commissioner to bypass the usual hearing required by state legislation when an insurer wants the target to increase over 7% and the increases are contested by an interventor. Krause wrote that “it’s just too much for SFG customers and a wider market, if any increase in interest rates should wait for full hearing or other resolution in the normal course.”

In the recommendation of the insurance department to approve the interest increases sought by the state farm, the employees noted that the proposed agreement would be reimbursed, promised by the company if the department ultimately approved the interest rates than the temporary rates.

The meeting, at which Lara asks the heads of state farms to appear in person, will also include a consumer guard, the group that intervened last year when the company filed its demands for tariffs.

Last week, the consumer guard called on the commissioner to reject the request of the state farm for the intermediate increases of the rate. In the press release, the group accused the company of “misleading policies, that he believed his financial status was at risk.”

Calmatters has sought a comment from the state farm and a consumer guard. When he was asked to comment last week on his proposed increase in emergency ratings, a state farm spokesman referred to a statement on the company’s website, which in part said that “insurance would cost more for California customers, as the risk is more and more risk is Big in California. ”

Property owners in California have been struggling with insurance and accessibility over the last few years, as companies have either stopped renewing policies or writing new ones, referring to risk and inflation of wild fire. Many housing owners had to turn to the fair plan plan, a coverage pool, funded by insurance companies operating in California, is required by the Law on the provision of fire insurance to those who otherwise cannot find it.

This week, Lara Approved $ 1 billion in Lifeline sought by the fair planWhich stated that she was at risk of running out of money to work as she paid claims for fires in the Los Angeles area. Its members of the companies will be responsible for this amount and are expected to take advantage of their new ability to try to recover half of that money from their customers by charging a one -time fee.

Last year, the commissioner implemented a lot of efforts to deal with insurance in the country. Came into force in early 2025, right Before the fires in the areaS