The American Property Casualty Insurance Association (APCIA) issued a statement following the California Department of Insurance's announcement that final wildfire catastrophe modeling regulations have been submitted to the Office of Administrative Law for approval.
The statement, attributed to Mark Sektnan, APCIA vice president of state government relations, emphasizes the significance of forward-looking catastrophe models in stabilizing California's insurance market.
Sektnan said that forward-looking catastrophe models play a critical role in stabilizing the market and commended Commissioner Ricardo Lara for prioritizing this reform as part of his Sustainable Insurance Strategy.
“Importantly, this regulation represents just one piece of the comprehensive reforms needed to restore access and availability to California’s insurance market,” Sektnan said. “We remain committed to working with the Department to ensure timely implementation of innovative catastrophe models and other desperately needed reforms, to ensure all consumers, drivers and small businesses have access to the coverage they need.”
The California Department of Insurance's proposed regulations are part of broader efforts to address challenges facing the state's insurance market, including the increasing frequency and severity of wildfires. The new regulations aim to incorporate advanced catastrophe modeling to enhance risk assessment and pricing accuracy for insurers operating in the state.
Last month, Consumer Watchdog criticized amendments to Lara’s proposed regulations, stating that they still do not address coverage issues for policyholders who have been non-renewed.
The amendments, which allow insurance companies to use climate model algorithms to justify rate increases, do not require transparency or accountability, according to the organization.
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