The California insurance industry is clearly in a state of crisis–something that was intensified in the aftermath of the devastating January 2025 fires in L.A. County. While too many Californians are struggling with underinsurance or even unable to get insurance, insurance companies are leaving our state at an unsustainable pace.
The status quo isn’t working for consumers and businesses alike, and profound change is desperately needed to right the ship. For a large percentage of Californians, their entire savings are in their home. If Californians can’t insure their homes, they will live one crisis away from financial ruin.
Earlier this year, the U.S. Government Accountability Office (GAO) released a report identifying that California’s long, 305-day median rate approval time for homeowners’ insurance was a primary factor in market volatility in recent years, as well as the inability of insurance companies to get reinsurance due to increased climate-related wildfire risk.
We can be faster and more efficient when reviewing rate filings by increasing the rate review team, removing unnecessary administrative hurdles not mandated by Proposition 103 and eliminating the inherent uncertainty in the current regulation-based rate and form application process. Additionally, we must create a fast path for rate increases or decreases below a certain threshold (for example, 5%), and deregulate certain restrictions on commercial rates.
However, for too long, homeowners have been left in the dark about the wildfire risk models that drive their premiums. As Insurance Commissioner, I will also bring transparency to insurance pricing by requiring insurance companies to open their books — publishing how they calculate risk, set prices, and decide whether to renew your policy.
I’ll push for public explanations by insurance companies anytime they raise rates and modernize and adequately staff the department’s rate regulation bureau to better examine insurers that attempt to charge excessive rates. I’ll fight for more power to enforce the full payment of legitimate insurance claims and ensure that insurers pay disaster survivors immediately, particularly as our state confronts greater wildfire and climate-related risks.
Additionally, we need to reform and shore up California’s FAIR Plan, which was originally implemented in 1968 after traditional insurance companies stopped writing homeowners’ policies for African Americans after the 1965 Watts civil unrest. But it was never planned for the wide-scale adoption that we see today. Today, instead of race as the criterion, it’s now your zip code.
The current over-reliance on the FAIR Plan is not sustainable; we must begin a process to depopulate the number of policies in the FAIR Plan, which will best be accomplished by a fully functional, competitive insurance market. That’s why I support the implementation of Assembly Bill 226, which will enable the issuance of bonds to finance claim costs, thereby increasing the FAIR Plan’s liquidity and claims-paying capacity, refunding previously issued bonds for that purpose, and reducing reliance on expensive reinsurance.
I also want to evaluate including the FAIR Plan in the California Insurance Guarantee Association as a means to more efficiently spread risk among all parties that are benefitted by — and burdened by — the realities of the California market. But it’s critical that we also shore up the FAIR Plan as a backstop for those who really need it, so I’ll work with the State Legislature and the private sector to secure the necessary funding while providing critical reforms to the program.
Lastly, we also need to revisit certain elements of Prop 103. While many components of Prop 103 have obviously been effective, some have been counterproductive and need reform. Many studies have shown that, over the last 30 years, the delays inherent in Prop 103 may have actually cost California consumers more than it has saved.
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We need to eliminate burdensome administrative hurdles mandated by Prop 103, like the lengthy rate approval process, challenges related to modern climate risk, market availability concerns, and better regulate the plaintiff groups intervening on behalf of consumers who make millions of dollars by opposing the insurance industry at every turn, but drive up the cost of insurance for consumers through intervenor comp fees.
The challenges California’s insurance industry faces are many – but I am confident that the opportunities to rebuild, restructure, and refortify are achievable. No Californian should hear news of a natural disaster and wonder whether their policy is canceled or their claim will be denied. As Insurance Commissioner, I’ll make our insurance marketplace more affordable and reliable to ensure that nobody does.
Steven Bradford is a former State Senator and State Assemblymember who served on the Assembly Insurance Committee and as Chair of the Senate and Assembly Energy and Utilities Committee. He is a candidate for California Insurance Commissioner.