California insurance commissioner says he can't take action against State Farm

[Leroy N. Soetoro]

https://www.kcra.com/article/california-insurance-ricardo-lara-state-
farm/44100050

SACRAMENTO, Calif. —
California Insurance Commissioner Ricardo Lara does not plan on taking any
action against State Farm after the insurance giant announced it was no
longer accepting applications for new home insurance policies last month.

"Absolutely not," Lara told KCRA 3 in an interview on Monday, responding
to calls from consumer advocacy groups who have said he has the power to
reverse State Farm's decision. "According to my legal team, I don’t have
the authority to do that. We’re going to focus on the things we can do,
which is bringing companies together, having the conversation, making sure
consumers are protected and don’t lose their coverage, and that’s what
we’re going to focus on."

State Farm's decision went into effect on May 27, following Allstate's
decision to do the same. State Farm cited wildfires and the growing cost
of construction for its decision to halt new policies. Lara considers
their decision a "pause."

"No insurance company is leaving. These are business decisions these
companies have made, which is par the course; we've seen companies do this
time and time again," Lara said.

State Farm's decision comes after it reportedly sought rate hikes that
would have totaled more than $700 million total from consumers. Lara
rebuffed claims that the nation's largest insurer was trying to publicly
pressure him to approve the increases.

When asked if he was concerned that other insurers in California may seek
larger rate hikes with two giant companies pausing policies, Lara said his
department is committed to working with insurers and protecting consumers.

"We have to be responsible to this ever-changing market of ours because
the last thing I want is to limit the availability of insurance options
for Californians," Lara said.

Lara said he was confident in the work the Legislature and governor have
approved to respond to climate change and enhance the state's wildfire
prevention and preparedness efforts. He also noted California homeowners
can start getting discounts for hardening their homes against wildfires.
He said all of this will help bring down California's risk for insurance
companies.

"There are challenges, but I'm very confident we're going to bring these
companies back," Lara said.


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