The state’s largest home insurance company said it paid $1.75 billion for claims filed as a result of a recent Los Angeles area wildfire.
LOS ANGELES – California Insurance Commissioner Ricardo Lara has approved “tentatively” and approved a request for an emergency 22% increase in homeowner insurance fees on March 14, but only if data can be justified at a hearing scheduled for next month.
“The role of the insurance committee will include balancing a stable and sustainable insurance market with effective consumer surveillance,” Lara said in a statement. “I had to make unprecedented decisions in the short term to ensure the long-term choices of Californians.”
Lara said the state farms “agree to commit to California customers and aim to restore financial stability. They hope that both the state farms and their parent companies will meet their responsibilities and will not completely transfer the burden on the customers. The facts will be revealed with an open, transparent hearing.”
The hearing is scheduled for April 8th before an administrative law judge. As a result, Lara said the payers “hopefully will eventually reach the bottom of the state farm’s financial position.” I am confident that my approach will offer Californians a greater choice in a competitive, stable insurance market.
On February 25th, State Farm said it had paid $1.75 billion so far for roughly 9,500 claims filed as a result of the wildfires.
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In a statement Friday, State Farm said it was a time of certainty in the California insurance market. The tentative nature of today’s decision does not improve that certainty, but it is a step in the right direction. We are moving forward with the implementation of this tentatively approved fee and will continue to work with the California Department of Insurance for a sustainable future for the California insurance market.”
The company continued. Additionally, State Farm General will continue to monitor its ability to support risk and build sufficient capital for the future. ”
Additionally, Lara called on state farms this week to halt non-renewal and pursue a $500 million capital injection from their parent company. He presented the proposal during meetings with state farm representatives, the Department of Insurance and interventions on the issue.
According to Lara, the Department of Insurance staff have engaged in informal discussions between state farms and interventions, reaching a resolution on demand for rate hiking on state farms. However, the parties did not reach an agreement, and the state farms claim that their financial situation has deteriorated. State Farm then contacted Lara directly and said it was requesting an emergency interim rate increase.
Lara’s actions followed an extraordinary meeting at the Department of Insurance’s Oakland office on February 26, reporting that while state farms could cover claims from Southern California wildfires, the disaster has aggravated its financial condition.
Lara says she has planned to improve her financial position and maintain her commitment to more than a million California homeowners for the state’s largest home insurance company.
“I live now because I’m afraid that if there are too many Californians, my insurance contracts aren’t replicated,” Lara said. “This anxiety perpetuates misinformation and discourages consumers from accessing eligible interests. This situation is unacceptable. I will remain vigilant to ensure that the state’s farm process is fair, fully and promptly advocated and endorsed in California’s clients.”
To resolve the issue, Lara said she ordered the state farm to answer questions at an official hearing that “promotes transparency and paths of progress.”
