Insurance director warns wildfire losses and market tightening; seeks staff, equipment and a homeowner‑hardening pool

Department of Insurance Director Dean Cameron told the Joint Finance‑Appropriations Committee on Jan. 21 that wildfires, rising reinsurance costs and inflation are tightening the property insurance market and driving consumer complaints, nonrenewals and a growing surplus‑lines market.

Cameron said Idaho burned just under 1 million acres in the prior year and that the department recorded more than 140 structures lost statewide, including about 40 residences. "This last year we burned a million acres, just under a million acres. That's horrific," Cameron said. He told lawmakers the agency has seen carriers restrict writing in parts of the state, increased reinsurance costs and multiple insurer insolvencies in the prior 12 months.

Why it matters: wildfire exposure and higher reinsurance costs are contributing to higher premiums, carriers withdrawing or limiting coverage in fire‑prone areas and greater use of surplus lines insurers, which do not carry the same consumer protections. The department proposed legislation to create a pool that would both help homeowners harden properties against wildfire and provide a mechanism to help carriers remain in the state.

Budget requests and program details

The Department of Insurance presented four enhancement requests for FY2026, funded from agency‑dedicated funds. Key items described to the committee included: - a staff actuary: $201,900 total ($198,900 ongoing personnel; $3,000 one‑time office equipment), to perform actuarial rate reviews in the market oversight bureau; - a regulatory compliance specialist (requested at 80% of policy for pay grade O, $41.03/hour) to serve as an internal legal and policy resource reporting to the director; - an ongoing $48,100 compensation increase for the state fire marshal positions ($38,100 salary; $10,000 variable benefits), funded from the Arson Fire and Fraud Prevention Fund; - one‑time capital outlay of $162,200 for the State Fire Marshal (turnout gear $10,000; cameras $16,200; two medium‑duty pickup trucks equipped for field operations $136,000).

The department has 75.5 approved full‑time positions (63.5 in the insurance regulation program; 12 in the state fire marshal). In fiscal 2024 the agency reverted just under $2.2 million of its appropriation (about $917,000 personnel and $1,277,000 operating), per the analyst's slides.

PBM oversight and health‑insurance programs

Cameron told lawmakers the agency implemented provisions of House Bill 596 and hired an analyst to manage pharmacy benefit manager reporting and complaints. "She's receiving numerous complaints," Cameron said. PBMs were required to submit data in a prescribed format; most had complied, he said, while a few were still providing data. The department is collecting the submitted data to determine dispensing fee calculations required by statute and will report further once the analysis is complete.

Cameron also discussed the state's 1332 waiver and the high‑risk reinsurance pool, saying the waiver has helped reduce individual market rates and expanded carrier participation on Idaho's exchange. "We have had a reduction in individual health insurance rates each year," Cameron said. He described the high‑risk pool as a reinsurance mechanism that shares certain expensive claims and helps hold rates down for insurers.

Wildfire impacts and proposed mitigation pool

Cameron said insurers are tightening underwriting in parts of Idaho where wildfire exposure is greater and that some homeowners have experienced nonrenewals or rate increases linked to wildfire risk elsewhere in carriers' footprints. He said the department plans to propose legislation this session to create a pool that would: (1) fund homeowner mitigation and hardening (for example, clearing vegetation and addressing eave/soffit vulnerabilities) to reduce ignition risk, and (2) provide a mechanism to help carriers remain competitive in the Idaho market.

Cameron warned that an increased use of surplus lines (nonadmitted) carriers — which the department said more than doubled in recent years for homeowners business — reduces consumer protections because surplus lines do not follow the same regulatory requirements as admitted carriers.

Follow‑up and next steps

Lawmakers asked for additional PBM compliance data and for continued monitoring of the market and insolvency risks. The director said the department is contracting actuarial work in the near term and that bringing an actuary in‑house should save money over contracting. No budget votes were taken at the Jan. 21 hearing; the governor's recommendations and committee follow‑up will inform final FY2026 decisions.