California Insurance Market Reform Act Gains Support Amid Market Strains
Panorama Insurance Associates, a longstanding California-based brokerage, is advocating for the California Insurance Market Reform Act slated for the November 2026 ballot. This proposed legislation targets the modernization of insurance regulations to enhance market competitiveness and better support independent insurance agents, who are encountering growing challenges in securing coverage for clients amid shrinking insurer participation in the state. The Act seeks to transition the Insurance Commissioner's role from an elected to a gubernatorial-appointed position requiring extensive industry experience, aiming to depoliticize oversight and introduce technical expertise into regulatory processes.
The California insurance market faces notable strains, evidenced by a significant retreat of major insurers from policy issuance since 2022, including State Farm's cessation of new policies as of May 2023. This contraction has driven a surge in California FAIR Plan premiums, nearly tripling from 2021 to 2024, and has increased reliance on the FAIR Plan as an insurer of last resort for over half a million residents. These developments affect all insurance lines, including personal and commercial coverage, underscoring systemic issues impacting affordability and availability.
The reform initiatives encapsulated in the Act also propose the integration of advanced catastrophe modeling and reinsurance costs into rate-setting frameworks, alongside standardized wildfire risk assessments. While maintaining consumer protections, the measure suggests eliminating the intervenor compensation system, which has funneled substantial payments predominantly to a single group. The legislation reflects growing concern over the influence of political and special interest dynamics on insurance regulation, advocating for a more professional and technically grounded approach.
Panorama is actively engaging the insurance professional community in California to support the ballot measure through signature gathering and awareness efforts. With an estimated 600,000 valid signatures needed to qualify the Act for the ballot, the company emphasizes industry unity and collective action to ensure voters have a choice aimed at stabilizing the state’s insurance market. Panorama's position is informed by extensive experience managing a vast agency network and significant insurance premiums in California, reinforcing its perspective on the evolving challenges within the market.