Though disappointed by the collapse of negotiations that could have produced major legislative reforms last week, IIABCal will redouble its efforts to persuade lawmakers and regulators to take the steps necessary to restore the admitted property insurance marketplace in California, IIABCal President Jonathan Schreter said this week. 
 
Throughout much of August, IIABCal and a coalition of industries most affected by the insurance availability crisis had successfully lobbied the governor's office, key legislative leaders, the insurance commissioner, and insurance company trade associations to work toward a consensus that might produce legislation at the end of this year's legislative session. 

The Negotiations Almost Succeeded 
Those negotiations came tantalizingly close to success. Broad agreement was reached on a consensus that would have given the commissioner new authority to promulgate emergency regulations that would have allowed rate applications to include reinsurance expenses and predictive catastrophic risk, expedited review of rate change applications by the Department of Insurance, and shored up the financial ability of the California FAIR Plan to pay catastrophic losses, among other things.

It appeared a deal was imminent as the legislature barreled toward its September 14 adjournment. However, at the last moment, leaders in the California Assembly concluded they did not have the votes necessary to approve that deal, in part because of the insistence of some members that insurers agree to refrain from all non-renewals of existing policies through 2024—a provision unacceptable to insurers because of the uncertainty of the timeline for implementing regulatory reforms, as well as the many vital details left to the discretion of the commissioner in the future regulatory proceedings.

IIABCal Will Not Rest Until This Problem is Solved 
“It is frustrating to come this close and not be successful, because we know how much our members and their policyholders are being harmed by this severe availability crisis,” Schreter said, “but we will not rest until this problem is resolved, and we will be working very hard between now and the return of the Legislature in January to better communicate the severity of this crisis to all policymakers.” 
 
One hopeful indication to emerge from the negotiations was the newfound support voiced by Insurance Commissioner Ricardo Lara for the reforms, said IIABCal General Counsel Steve Young.  The Commissioner already has the legal authority necessary to make many of these changes.  The plan would have hastened the Commissioner’s ability to get emergency regulations on the books, but he could still promulgate the necessary rules even without new law.  It remains to be seen whether he will do so. 

Governor Newsom Acknowledges the Insurance Crisis 
Another positive sign came this week in comments from California Governor Gavin Newsom, who expressed his own disappointment that the property insurance deal fell through.  In an interview with Politico, the Governor was quoted saying the retreat of home insurers amid rising climate disaster costs constituted a "waving red flag" and compared California to Florida, where homeowners insurers have withdrawn from the state, despite rate hikes. 
“This is not unique to us.  This is the coming attraction in terms of impacts of climate,” he said. 
 
Another hopeful indication to emerge from the consensus, which included all of the major elements in a reform plan IIABCal announced earlier this year, is that it provides a more concrete starting point for reforms to be introduced in 2024 on reinsurance costs, cat modeling, and expediting prior approval. 
Speaker Announces New Hearings on Crisis 

Speaker Announces New Hearings on Crisis 
Meanwhile, California Assembly Speaker Robert Rivas announced Tuesday that the Assembly will hold a series of public hearings this fall on access to comprehensive insurance coverage, wildfires and catastrophes, and understanding consumer and community perspectives and experiences as they navigate an often inaccessible and Byzantine insurance system that needs to be fixed. 
 
“We hear loud and clear from our residents that access to insurance is a problem,” Rivas said in a press release.  “Our Caucus has been steadfast in putting consumers first, and I’m grateful for their dedication. Our mission has always been to ensure homeowners and businesses across California can access and retain comprehensive insurance coverage.”  
 
The release stated, “Californians are facing an insurance availability crisis. Insurers are leaving the state, reducing coverage, and in many cases non-renewing, pausing or canceling policies altogether.”