By Lisette Cruz

On August 1, 2024, the California Department of Insurance (“CDI” or “the Department”) published its 2023 Annual Report of the Commissioner, pursuant to California Insurance Code section 12922. The report is designed to describe the condition of the California insurance market and the Department’s efforts to regulate the country’s largest insurance market.

In the report’s opening letter to Governor Newsom, CDI Commissioner Ricardo Lara outlined the Department’s initiatives to address the interests of Californians in stabilizing the insurance market and protecting consumers from ongoing climate change risks. In 2023, the Department announced the Sustainable Insurance Strategy–the largest insurance reform since the passage of Proposition 103 in 1988. [29:1 CRLR 67–68; 29:2 CRLR 60–62] Using multi-year wildfire data collections, this initiative attempts to protect consumers against climate threats while making insurance more readily available and affordable to residents and businesses.

Following seven declarations of wildfire emergencies in California, the Department worked closely with the California Department of Forestry and Fire Protection and the California Office of Emergency Services to implement SB 824 (Lara) (Chapter 616, Statutes of 2018) (authored by then-Senator Lara), which provides insurers with one-year protection to homes located adjacent to a declared wildfire emergency area.

Additionally, the Department sponsored eleven bills in 2023—with Governor Newsom signing five bills into law. The report highlighted 3,449 investigations, 664 executed search warrants, 859 cases submitted to the district attorney’s office for prosecution, and $133,434,301 recovered for consumers following consumer complaints and market conduct examinations. Furthermore, the Diversity Initiative collaborated with the Department to launch the Insurance Diversity Index to measure insurance companies’ commitment to diversity within its board appointments.