Oregon insurance regulators flag reinsurance squeeze and roll out consumer and housing supports
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Summary
State insurance officials told the House interim committee that reinsurance costs are reducing carrier capacity and driving nonrenewals, and they outlined next steps including a multistate data refresh, a funded study of a state reinsurance/risk pool and implementation of 2025 laws offering premium assistance and expanded consumer explanations for rate increases.
Chair Marsh invited the Division of Financial Regulation to brief the committee on homeowners insurance as wildfire risk and recent catastrophic events reshape the market.
TK Keen, acting insurance commissioner and DFR administrator, said a 2018–2022 multistate NAIC data call and DFR’s own reinsurance review show insurers are facing sharply higher catastrophe exposure since 2020. ‘‘Carriers are in fact getting about half the coverage for twice the price,’’ Keen said, summarizing DFR’s finding that reinsurance buyers now face sharply reduced capacity and much higher costs, a combination that constrains how much new business carriers can underwrite and contributes to nonrenewals.
Keen also noted premiums rose roughly 8% on average year‑over‑year from 2018–2022 — about a 35.5% increase across that period — while the dataset the division currently has covers about 80% of the market and has blind spots in some rural counties. The FAIR Plan, DFR said, remains a market of last resort with roughly 2,300 policies; DFR described FAIR Plan limits (personal dwelling up to $600,000, commercial up to $1,000,000) and said a recent actuarial rate review will lead to more geographic differentiation after years in which FAIR Plan rates were less differentiated.
DFR’s policy manager Jesse O’Brien outlined the department’s near‑term work to implement 2025 legislation. Key elements of Senate Bill 829 include a premium‑assistance program for eligible affordable housing operators, homeless shelters and turnkey sites (O’Brien said ‘‘there’s 2.5 million dollars available in a fund’’) and a funded study to evaluate whether a state‑level reinsurance or risk‑sharing program could be viable. SB 85 directs agency collaboration with the state fire marshal and Department of Forestry on community risk mitigation options that may produce insurance discounts. House Bill 2563 will let consumers request a written, individualized explanation of up to four factors driving a rate increase; that requirement will take effect Sept. 1, 2026, under the implementation timeline O’Brien described.
Committee members pressed DFR on options. Representative Mannix asked whether Oregon should pursue a state reinsurance pool; Keen said SB 829 will fund actuaries and economists to test that viability and provide data to inform legislative choices. Representative Anderson sought clarification about the FAIR Plan’s funding and why FAIR Plan premiums can appear lower; Keen said the FAIR Plan is funded through assessments on insurers (and had not levied an assessment in roughly 30 years), historically offered a lower level of coverage and only recently completed actuarial rate work.
DFR told the committee it will run another data call covering 2023–2025 to capture more recent market changes and will continue to coordinate with the Oregon State Fire Marshal and Department of Forestry on mitigation and rating issues. DFR also emphasized consumer outreach and education to help Oregonians shop multiple carriers and to use the Fair Plan appropriately as a temporary option.
Next steps: DFR will publish the refreshed data, finalize administrative guidance tied to 2025 laws and deliver required legislative reports (O’Brien referenced a Dec. 15 deliverable and a Feb. 1 reporting milestone for related work).
