On December 13th, California Insurance Commissioner Ricardo Lara announced that the State had approved the final version of his proposed regulations on catastrophe modeling for insurance ratemaking, which are now in effect. The new regulations, which Commissioner Lara hopes will stabilize the insurance market and expand options for property insurance customers throughout the state, allows insurers to utilize catastrophe models in their ratemaking processes in exchange for meeting prescribed commitments to increase policy coverage in high-risk areas of the state.
The regulations have been in development since early 2024 as the California Department of Insurance (CDI) engaged stakeholders, including RCRC, and received public input.
On the new regulations, RCRC Board of Directors member and Napa County Supervisor Anne Cottrell said, “Moving toward a catastrophe model makes so much sense in this age of climate change. We need to be looking forward. We need to ask the insurers to include consideration of community and large-scale wildfire risk mitigation, because that’s the right thing for communities to do to make their communities safer and their properties safer. And, we need to see that value reflected in the insurance industry.”
Review of the new catastrophe models beginning January 1, 2025. For more information, visit the CDI website or contact RCRC Senior Policy Advocate, Staci Heaton.