CDI Takes Major Step Toward Insurance Reform with New Wildfire Risk Model Approval
Industry Insights from Bender Insurance Solutions
CDI Takes Major Step Toward Insurance Reform with New Wildfire Risk Model Approval
At Bender Insurance Solutions, we are committed to keeping our clients and partners informed on key developments that shape California’s insurance landscape. A recent and notable advancement comes from the California Department of Insurance (CDI), where Insurance Commissioner Ricardo Lara has approved a third catastrophic wildfire risk model—a decision that plays a vital role in the state’s broader Sustainable Insurance Strategy (SIS).
This new model is designed to help insurers more accurately price coverage for properties vulnerable to wildfire, which is essential in a state where natural disaster risks are evolving rapidly. For years, California was the only state that prohibited insurers from using forward-looking catastrophe models to develop rates. Commissioner Lara’s SIS marks a turning point—allowing these tools with the requirement that insurers also commit to writing and renewing policies in historically underserved areas.
The approval follows a six-month public vetting process, reflecting a rigorous and transparent approach to reform. The goal is clear: bring balance back to the property insurance market while ensuring access to coverage in high-risk regions.
Encouragingly, major insurers including Mercury, Allstate, and CSAA Insurance Group have already signaled plans to expand their presence in California under the new guidelines. This momentum signals positive change for communities facing limited insurance options.
As advocates for sustainable solutions and educators in risk management, we at Bender Insurance Solutions view these regulatory updates as essential to restoring stability and fairness in the market. We echo the sentiment of IIABCal General Counsel Steve Young, who noted that adopting these forward-looking models—and allowing insurers to factor in reinsurance costs—are among the most critical actions the CDI can take to support a functional, competitive insurance environment.
“The Commissioner’s regulations were thoughtfully constructed,” said Young. “We’re pleased to see independent insurers preparing new rate filings that take advantage of these vital tools.”
We believe that staying informed is a strategic advantage—and we’re here to help you navigate these changes with confidence. If you have questions about how this impacts your coverage or risk profile, the Bender team is always ready to guide you with clarity and expertise.
Contact Bender Insurance Solutions today to schedule a no-obligation analysis.
