Cannabis coverage approved for three insurance carriers
News: 2018 Press Release
"The approval of these new products means California cannabis businesses have more options for insurance coverage available to them," said Insurance Commissioner Dave Jones. "I continue to encourage more insurance companies to file cannabis business insurance products with the department to meet the needs of this emerging market." Cannabis business operators are encouraged to check the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) regulations to determine the applicable cannabis surety bond requirements for the applicable licensing categories.
Commissioner Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. This first filing and approval of commercial insurance for the cannabis industry was announced in November of last year as a successful result of Commissioner Jones' initiative. Jones has convened meetings between commercial insurance company executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.
In October of last year, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses. The hearing revealed that while there is insurance available from surplus lines insurers, insurance gaps in coverage remain, and, until the approval announced last November, no admitted insurance carriers were offering insurance products to cannabis businesses. Jones also announced that he has directed Department staff to devote the resources necessary to timely approve the cannabis product and program filings.
Commissioner Jones hosted a national webinar titled "Weeding through the Unique Insurance Needs of the Cannabis Industry" with the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research (CIPR). In April, Jones renewed his call for insurers to offer insurance products for California's legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions' policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California's cannabis businesses.
- Information on the Cannabis and Insurance Initiative
- Commercial Cannabis Surety Bonds are needed for various cannabis business operations seeking licensure under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.