Cannabis coverage approved for three insurance carriers
News: 2018 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today he has approved three more insurance carriers to offer coverage for the cannabis industry in California. The North River Insurance Company and United States Fire Insurance Company will begin offering coverage today and White Pine Insurance Company will begin offering coverage later this month. All three insurance carriers will write surety bonds for the cannabis businesses.
"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.
Media Notes:
- 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).
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
