California’s independent insurance agents and brokers are warning that a sharp change in regulatory direction could delay insurers’ return to the property market, as Jane Kim holds a narrow early lead in the race for insurance commissioner.
The former San Francisco supervisor was ahead of state Sen. Ben Allen in incomplete returns from the November 3 election. Both Democrats are seeking to succeed Ricardo Lara, with competing plans to address the coverage shortages confronting homeowners and the brokers trying to place their risks.
Allen has supported building on Lara’s Sustainable Insurance Strategy (SIS), including faster rate reviews and rules allowing catastrophe modeling and reinsurance costs in ratemaking. Kim proposes moving wildfire coverage out of private homeowners policies into a public, nonprofit insurance program.
Steve Young (pictured), senior vice president and general counsel of the Independent Insurance Agents & Brokers of California (IIABCal), told Insurance Business that the outcome could influence carriers’ willingness to resume writing business.
“We believe many insurers may be waiting on the outcome of this election to decide whether to return to the California property insurance market—or to continue to avoid it,” Young told Insurance Business.
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Young said that the existing reforms were beginning to improve conditions, pointing to slowing FAIR Plan submissions and insurers’ commitments to re-enter the market.
The American Property Casualty Insurance Association (APCIA) has also supported the reforms. In December 2024, Laura Curtis, its assistant vice president of state government relations, described incorporating reinsurance into ratemaking as “one of several critically needed reforms to stabilize California’s insurance market.”
The California Department of Insurance reported October 29 that the FAIR Plan added 2,200 policies between July and September, its slowest growth since 2022. Twelve homeowners insurers, including seven of the state’s 10 largest, had committed to staying and growing in California, the department said.
Kim’s proposed public fund would introduce uncertainty while its structure was developed, according to Young. “Her plan for a new state fund to cover a variety of natural disaster exposures is untested and would inject massive uncertainty and delays into the market while the details were being fleshed out,” he said.
Kim’s published policy brief focuses on wildfire coverage for existing homes. It proposes mandatory participation, with premiums reflecting individual property risk and a capped statewide contribution for severe fire seasons. Private insurers would administer coverage for a fee, while the public program held the risk, purchased reinsurance and directed mitigation spending.
Kim argues that reinvesting money in prevention and reserves would improve affordability over time. Her plan anticipates collaboration with the governor and Legislature; it is a proposal rather than an operating alternative for brokers arranging renewals.
IIABCal’s immediate priorities center on the conditions carriers need to offer more coverage. Young said insurers require adequate rates and timely decisions on applications to change them.
Although the department has improved response times, pending filings remain an obstacle to bringing coverage to market. The department separately reported that filings under review had fallen to their lowest level in decades. “Both candidates have called for expanding staff to increase the rate filing bureau's efficiency, and we would strongly support those efforts,” Young said.
The association also opposes expanding the FAIR Plan into full homeowners coverage and objects to Kim’s opposition to allowing insurers to recover part of catastrophe assessments. Young said both positions could discourage carriers from returning.
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IIABCal wants the next commissioner to improve the SIS carefully and support legislation encouraging insurers to take policies out of the FAIR Plan. Its support for reducing the plan’s concentration of risk comes with a condition: policyholders should retain access to independent advice when assessing replacement coverage.
“We support efforts to depopulate the FAIR Plan, but it is essential for consumers to continue to have the advice and counsel of brokers in evaluating marketplace alternatives, and we hope to assist the Commissioner in implementing legislation designed to encourage insurers to remove policies from the Plan,” Young said.
