California Fair Plan orders $1 billion assessment after January wildfires, warns rapid growth threatens solvency

The California Fair Plan asked its member insurers for $1 billion after the January wildfires and warned the state’s residual insurer is growing faster than its financial resources, Fair Plan leaders told the California State Assembly Insurance Committee.

Victoria Roach, president of the California Fair Plan, told the committee the plan ‘‘is not a state agency. We are not state funded, and we are not taxpayer funded. We are a not for profit.’’ She said the plan’s role is to be ‘‘the insurer of last resort’’ — a temporary safety net for policyholders who cannot obtain coverage in the admitted market.

The plan reported that as of March 31 it was insuring about 575,000 policies and had nearly $600 billion in exposure. Armand Feliciano, representing the Fair Plan, described how its accounting committee and board concluded the organization would need to assess member insurers after the January losses. ‘‘The board unanimously agreed we needed to assess. They agreed a billion dollars was the right number,’’ Feliciano said.

Nut graf: The assessment reflects…