California Department of Insurance to Host Workshop on Risk Assessment Tools to Safeguard Consumers from Climate Change

News: 2023 Press Release

LOS ANGELES — The California Department of Insurance today issued an invitation to a public workshop focused on exploring insurance companies’ use of risk assessment tools in the face of growing climate change threats. The workshop aims to gather expertise and input to inform future regulations that could benefit consumers through increased insurance coverage options, fair and justified pricing of insurance, and greater recognition by insurance companies of federal, state, and local wildfire safety and mitigation investments.

The July 13 workshop is a continuation of a multi-year effort that Insurance Commissioner Ricardo Lara initiated in 2020 that led to the creation of his first-in-the-nation “Safer from Wildfires” regulations to mandate discounts to homeowners and business owners who engage in wildfire safety and mitigation efforts on their homes, businesses, and properties. Commissioner Lara has taken several actions in response to the increased climate-intensified wildfire risks, including meeting with Californians across the state, convening his Climate Insurance Working Group, enacting the Safer from Wildfires regulations, and holding a previous workshop on the use of catastrophe modeling used for insurance risk management.

Regarding the purpose and importance of the workshop, California Insurance Commissioner Ricardo Lara issued the following statement:

“Protecting California consumers and addressing climate-intensified wildfire risks requires ongoing innovation and being proactive. This workshop is a significant step toward engaging stakeholders and experts in developing long-term solutions. Consumers will continue to benefit from this effort through more coverage choices and greater safety for their communities, and longer-term resiliency of our state’s insurance marketplace.”

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Media Notes:

• Meeting Notice
• The Department has been working to better understand the potential consumer benefits of risk modeling for multiple years.
• In a 2020 virtual meeting, the public heard testimony from a range of perspectives – actuaries, researchers, public sector and private sector, mitigation professionals, prescribed fire experts, and native tribes.
• The meeting also included a member of the cultural fire council and Yurok Tribe, a community mitigation specialist from Colorado, the Director of IBHS, and the Director of the Center for Insurance Policy Research at the National Association of Insurance Commissioners (NAIC)
• CAL FIRE also presented on their home hardening grant programs and rules.
• Summary of 2020 “Virtual Meeting Regarding Home Hardening and Wildfire Catastrophe Modeling in Ratemaking” workshop