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Insurers and the FAIR Plan describe claims response and urge regulatory reforms to restore market capacity
Summary
Industry representatives and the California FAIR Plan described emergency claims operations and urged support for Commissioner Lara’s regulatory reforms — including catastrophe models and reinsurance rules — as necessary to restore insurer participation in the state market.
Representatives of the California FAIR Plan and multiple insurance trade groups told the Senate Insurance Committee that insurers mobilized to pay claims and assist survivors after the Los Angeles wildfires and that regulatory modernization is needed to restore market capacity.
David Lawrence, chief of staff to the California FAIR Plan president, said the FAIR Plan, created by statute in 1968 as an insurer of last resort, has seen historic growth and in recent months has acted as a primary market for many homeowners. “We continue to support all those who come to us,” Lawrence told the committee, describing surge staffing, mobile catastrophe vans, and in‑person claimant support at recovery centers.
Trade association witnesses — Denny Ritter of the American Property Casualty Insurance Association (APCIA), Sarah Taylor of the Personal Insurance Federation of California (PIF), and representatives of California‑domiciled mutual insurers (Paddock) — said insurers deployed catastrophe teams, advanced living‑expense funds, used aerial imagery early in the response when ground access was limited, and have been paying claims. Ritter said insurers had paid more than $12 billion across more than 37,000 claims as of the dates he cited.
Nut graf: Industry representatives urged committee support for the department’s sustainable insurance strategy, saying up‑to‑date catastrophe models and the ability to reflect reinsurance costs in rates are necessary to price risk accurately and to induce insurers to write more policies in higher‑risk areas. Industry witnesses also described substantial operational steps to assist claimants in the immediate aftermath.
Industry concerns and offers: Witnesses said California’s rate review process must move faster, that catastrophe models and reinsurance need clear regulatory treatment, and that insurer commitments to write more business should be paired with modernized rules. Several witnesses said the model review process established by the department invites consumer group participation but noted proprietary limits on model code disclosure.
FAIR Plan financing: FAIR Plan witnesses described financing through cash on hand, annual reinsurance purchases, and a statutory assessment protocol that bills voluntary market members when FAIR Plan assessments are triggered. FAIR Plan staff said depopulation (moving policies from the FAIR Plan back into the voluntary market) is a stated priority.
Ending: Industry witnesses asked the committee to support reforms and noted the operational strains of a very large catastrophe; committee members pressed industry representatives on transparency, model review, and protections for policyholders who cannot otherwise obtain private market coverage.
