California’s Insurance Commissioner Ricardo Lara has proposed a new three option plan for insurance providers to step up coverage in the Golden State. The first option is to have providers write 85-percent of their statewide market share in high-risk areas. The second would have them achieve one-time 5-percent growth in the number of policies they write in high-risk areas. And the third option is to have the providers increase their number of policies by 5-percent by taking people out of the state’s FAIR Plan. If providers comply with one of these three options, they will be allowed to take advantage of catastrophe modeling. Insurance companies have lobbied for catastrophe modeling for quite a while. It takes into account historical data and combines that with projected risk and losses. Commissioner Lara’s plan is expected to be in effect by the end of the year.
