California Insurance Commissioner rejects the request for the state farm to increase tariff increase
But under California Proposition 103, insurers must prove that such increases are necessary and not exaggerated. While frequent catastrophic weather storms give homeowners and tenants to understand stable insurance premiums, State Farm has stopped writing new policies in California and not issued for thousands of existing policy measures.
In one press release Published last week, Lara addressed State Farm’s request for elevations in California after the forest fires in Los Angeles in last month.
“Under the strict assessment of Proposition 103, the load on State Farm is to show why this is now necessary. State Farm did not pay his burden, “Lara told the insurer in a letter.
The press release continued by saying that the Commissioner “consistently made full transparency of all parties in the tariff process-including insurance companies and interlocating to ensure that decisions are based on clear and justified data.”
Lara has also asked that State Farm answers critical questions about his financial situation and the proposed rate increases. He called for a personal meeting with civil servants from the state farm on 26 February where they can tackle these problems.
Lara’s office wants to assess the financial stability of State Farm, in particular why the financial position of the company has deteriorated despite previous rate increases. It also wants to know what has changed since the last rate of the State Farm that now requires urgent exemption. Consumer effects and adequate documentation to justify claims and the interest rate increase were also requested.
“From the past 10 years, all Californians know that the risks of natural fire are real and growing. We have experienced the devastation of a changing climate from first hand. We are clear about the work that is needed to protect our communities, “Lara said.
“Our decisions must be led by transparent data and a fair settlement with the challenges with which we are all confronted together. If the chosen head of the department is my primary responsibility for the people in California. This situation emphasizes the wisdom of voters in having an independent, chosen insurance commissioner who makes decisions to maintain market integrity in response to evolving threats, which today include climate change, increasing global reinsurance costs and a tightening of the market for national real estate insurance. “
The letter From Lara to State Farm leaders states that with the approval of its department, the company previously received 6.9% of 6.9% in 2022 in 2022 in 2022 in 2022.
“How does State Farm explain the significant decrease in the surplus of the policyholders in the absence of Non-Wildfire loses catastrophic in 2022 and 2023?” Lara wrote.
State Farms answerSubmitted the same day, disappointment about the lack of support with regard to premiums and protection for Californians.
“We have put a lot of effort into answering the questions of the Commissioner clearly. Although we are positioned to treat all claims related to the most recent forest fires, State Farm General must seriously consider his options in the California Insurance Market in the future, “said the explanation.
Jennifer McGuinness-Lubbert, the CEO of Turn financiallysaid that disasters such as the La Fires cause a threshold where insurance companies must receive money from reinsurers.
“It is quite well known that State Farm received the majority of their reinsurance from their parent company,” she said in an interview with Housing.
In a separate LinkedIn afterMcGuinness-Lubbert explained that the state farm went wrong there.
“If you do not want this risk level not to buy a reinsurance from your parent, buy it at external entities,” the post read. “The homeowners in California should not pay for this, State Farm knew the risk of Intracompany agreements, because they are institutional investors, now it’s time to pay as every third party should.”
