The commissioner can take three actions to improve the market. The first action is to allow markets to properly price the market quickly so that home owners in fire prone areas have access to many markets. The second action he could take would be to encourage the state retirement fund systems (CalPERS and CalSTRS) to help primary insurers in the state reinsure the risk at a price lower than the current reinsurance market. These funds are so large that a large fire event would only have a very small impact on their overall results. It would also allow the DOI staff to have some of their own skin in the game and better understand private equity risk. The last action is to use leverage to have the state improve forest management. Perhaps a small percent of the money that goes into the large retirement fund could be placed here.
The key is to find a long term solution that just does not penalize the equity of the current market. Both insureds and companies want to provide incentive to attract investment into the market.
This statement is super vague yet the most important thing to do. “pushing for incentives for mitigation”
What should be said is: Clear your property for 100′ in all directions or plan on paying very high rates for homeowners insurance. This is what should be mandatory.
The commissioner can take three actions to improve the market. The first action is to allow markets to properly price the market quickly so that home owners in fire prone areas have access to many markets. The second action he could take would be to encourage the state retirement fund systems (CalPERS and CalSTRS) to help primary insurers in the state reinsure the risk at a price lower than the current reinsurance market. These funds are so large that a large fire event would only have a very small impact on their overall results. It would also allow the DOI staff to have some of their own skin in the game and better understand private equity risk. The last action is to use leverage to have the state improve forest management. Perhaps a small percent of the money that goes into the large retirement fund could be placed here.
The key is to find a long term solution that just does not penalize the equity of the current market. Both insureds and companies want to provide incentive to attract investment into the market.
Observor for Insurance Commissioner
This statement is super vague yet the most important thing to do. “pushing for incentives for mitigation”
What should be said is: Clear your property for 100′ in all directions or plan on paying very high rates for homeowners insurance. This is what should be mandatory.