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Fair Plan’s rapid growth, reinsurance gaps and new financing tools spotlight market strain
Summary
At a California State Assembly Insurance Committee oversight hearing, Fair Plan officials described rapid policy growth, large wildfire exposure and recent reinsurance and financing moves — including a ventilated $7.1 billion reinsurance tower, a $750 million catastrophe bond, and a $600 million line of credit — as central to the Plan’s effort to avoid industry assessments.
The California Fair Plan told the Assembly Insurance Committee on Thursday that it is expanding rapidly and faces significant catastrophe-financing and rate challenges that affect the entire property-insurance market.
Victoria Roach, president of the California Fair Plan, told lawmakers the Plan’s exposure is roughly $724 billion and its book includes just over 668,000 policies. She said the Plan wrote about 49,000 new policies in the first fiscal quarter after the 2025 fires and that growth has slowed but remains high.
Roach described the Plan’s existing reinsurance structure as a ventilated tower arranged on 03/01/2025…
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