California Department of Insurance outlines steps to stabilize market, expand FAIR Plan and introduce catastrophe modeling

The California Department of Insurance told the Palm Desert City Council on March 13 that the state is pursuing regulatory and technical changes to ease an insurance market squeezed by natural disasters and inflation.

"The insurance market is under stress," said Judith Pena, an outreach analyst at the California Department of Insurance (CDI). She said climate-driven wildfire risk, historic inflation and rapid growth in the FAIR Plan have left many homeowners with fewer, higher-cost options.

Pena described Proposition 103, approved in 1988, as the legal framework that requires insurers to obtain approval from the insurance commissioner before changing rates and gives the public an explicit role in the rate-review process. She said rate applications are to be reviewed within 180 days and that CDI must approve or deny filings within that window.

To address delays and improve transparency, CDI has hired additional staff, extended public hours (noted in the presentation as roughly 9 a.m.–6 p.m.) and opened a weekend 1‑800 line. Pena said CDI has also moved toward clearer filing requirements so insurers must submit complete applications.

The department outlined a…