California unveils landmark sustainable insurance strategy  September 25th 2023

California unveils landmark sustainable insurance strategy

It's the largest package of reforms in nearly 35 years.

California insurance commissioner Ricardo Lara has unveiled a package of reforms that aims to alleviate the state’s troubled insurance market, including changes to the FAIR Plan and a deal with insurers that allows more people to transition back to the regular insurance market.

Billed as the largest insurance reform since state voters’ passage of Proposition 103 nearly 35 years ago, California’s Sustainable Insurance Strategy is a comprehensive plan to protect Californians from increasing climate threats while ensuring the long-term stability of the commercial market.

California Governor Gavin Newsom has signed an executive order urging prompt regulatory action to enact the reforms.

Multiple years of losses due to wildfires and other climate change-driven disasters have prompted some carriers to stop issuing new home and commercial property insurance policies in the state, limit their coverage, or non-renew existing policyholders.

AM Best Revises Outlooks to Negative for State Farm Mutual Automobile Insurance Company and Certain Subsidiaries

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its affiliates, State Farm Fire and Casualty Company and State Farm County Mutual Insurance Company of Texas (Richardson, TX), collectively referred to as State Farm Group.

The negative outlooks on the property/casualty rating units primarily reflect recent adverse underwriting experience in the private passenger auto insurance line of business and the challenging regulatory environment that have constrained the ability of State Farm (as well as its industry peers) to increase premium rates in a timely fashion, along with continued elevated catastrophe-related loss experience in many parts of the country. The weather-related losses particularly from hurricane, winter and convective storms, as well as wildfires, have put further pressure on the group’s operating performance assessment. The negative outlooks on State Farm Life reflect the negative outlook on State Farm Group, given the consideration of ratings lift for State Farm Life on the basis of implicit support from State Farm Group.

The history of state insurance departments

In 1752, a group of firefighters — which included Benjamin Franklin — founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. They structured the company after the Amicable Contributorship of London, as a mutual insurance company in which policyholders would share risk.

How the modern insurance framework came to be

In 1799, the first U.S. law considering insurance regulation was passed in Massachusetts, which introduced the concept of state supervision of insurance business.

The New Hampshire Insurance Department became the first insurance regulatory agency in the U.S. when it was founded and appointed its first insurance commissioner in 1851. Over the next two years, seven states followed New Hampshire’s example and established their own insurance departments: Massachusetts, Vermont, Connecticut, California, Indiana, Missouri and New York.

The right of states to determine insurance regulation and taxation was held by the Supreme Court in 1869 when it was ruled in the case of Paul v. Virginia that “issuing a policy of insurance is not a transaction of commerce.”

Beginnings of the NAIC

The first meeting of the National Convention of Insurance Commissioners (NCIC) — which became today’s National Association of Insurance Commissioners (NAIC)— was held in 1871 in New York City.

Those at that first meeting outlined their reason for forming with the following: “First, the delegates decided that there were benefits arising from agreements related to the discretionary powers of the commissioners. Specifically noted in this area were agreements related to terms and nomenclature. The second area was legislation. The convention observed that, while it could not enact laws, that it could influence them.”

Along with the formation of the NCIC came the passage of the Reciprocal General Insurance Act in 1871, which served to, “revise, simplify, and amend the laws of this State in relation to insurance, with due regard to the legislation of other States, so as to secure mutual harmony in the promotion of the public interest, to define the relation of the State to companies and individuals, to insure the stability of companies, to protect the interests of the insured, and to encourage the employment of capital.”

The NAIC is governed by the chief insurance regulators from all 50 states, the District of Columbia and five U.S. territories, who coordinate the regulation of multistate insurers.

Amica offers Empathy platform for beneficiaries of life policyholders navigating the loss of a loved one

Amica Insurance, a leader in auto, home and life insurance, announced that it will begin offering beneficiaries of life insurance customers complimentary access to Empathy, the comprehensive support system for loss. Combining technology and human care, Empathy helps families through all the emotional and practical challenges of losing a loved one, with personalized, comprehensive, on-demand support.

"We know the days, weeks and months after a loss can prove to be the hardest to navigate," said Shiela Companie, Senior Vice President and General Manager at Amica Life. "Empathy walks beneficiaries through the process, providing real-time support and guidance on everything from obituary writing to navigating probate and much more. It's the perfect extension of the empathetic service Amica offers our customers and their beneficiaries."

Among other features, Empathy simplifies and streamlines paperwork, helps with funeral planning and estate settlement, and offers Care Managers, who provide families with one-on-one care throughout the bureaucratic burdens of loss, and the emotional challenges it brings.

Autumn is Most Dangerous Season for Auto Accident Damage

Tens of millions of U.S. drivers are heading directly into Danger Season---the time when auto crashes occur most often where they live, CARFAX data shows.

Although many might assume winter is the most accident-prone season, more than 72% of U.S. drivers---roughly 170 million---live in states where autumn is the peak season for accident damage, CARFAX said in a news release.

Why does autumn have so many accidents? Experts call out these reasons:

• Diminishing daylight: Fall means shorter days, and that means more driving in the dark, when drivers are twice as likely to have an accident as in daylight. Half of U.S. accidents happen in the dark, but those hours account for only 25% of travel.

• Slick surfaces: Wet leaves brought down by storms can be as slippery as ice. Braking on wet leaves can make a car travel more than twice as far as braking on a dry road.

• Deer danger: Mating season for deer runs from October through December, and nearly half of deer crashes nationwide happen in just those three months. In addition, one study notes that deer-car collisions spike 16% in the week after the end of Daylight Saving Time in November because of the jump to an earlier sunset.

"CARFAX has the most accident and damage information, and sometimes that data can be surprising," said Faisal Hasan, general manager for data at CARFAX. "The change of seasons is a good time for drivers to see if any new recalls have been issued for their car." Consumers can check on unfixed recalls, for free, at carfax.com/recall.