A new California state P/C trade association is being formed by a group of small and mid-sized California domestic insurers. The members write homeowners, auto and commercial lines except workers’ compensation and are primarily dependent upon independent agencies to market their product.
The effort, led by Capital Insurance Group CEO and President Peter Cazzolla, will start operations at the first of the year with less than a dozen companies headquartered in California. The members have chosen as a name the Pacific Association of Domestic Insurance Companies, or PADIC.
Cazzolla felt that the existing state and national trade associations were not fully addressing the unique needs of domestic insurers in the state. “We have lost many domestic insurance carriers in recent years because they are especially vulnerable to state CAT exposures as well as excessive competition and regulation such as prior approval. They know their markets well, enabling them to price them fairly, but often don’t have the multi-state risk dispersion of larger multi-state insurers. Their disappearance is a real loss to the consumer, the business community and the state’s economy,” Cazzolla said.
Cazzolla said that because PADIC members are located in and committed to the California market they will be focused on delivering the message to legislators and regulators that more regulation simply adds to the already high cost burden on small business and policyholders. He expects that PADIC member company’s senior officers and CEOs will be personally involved in delivering this message.
Cazzolla said that other domestic insurers share his concerns and have considered ways to address these issues in the past. The move to create PADIC was accelerated by the pending merger of the Alliance of American Insurers and the NAII. After the Alliance closed its Western Office in San Francisco in anticipation of the merger, former Alliance Vice President and Western Regional Manager Peter Gorman was asked to become PADIC’s new Executive Director. With the Alliance for 14 years, Gorman had legislative and regulatory responsibility for all lines in 12 western states.
“We are still in the formative stage and will be developing policy objectives to address the hostile legislation and regulations we are seeing coming out of Sacramento,” Gorman said. “We want to be part of the political dialogue when legislative session resumes in January so this seemed like the right time to define the threat to domestics and help create a sustainable business environment, not just for us but for businesses and consumers. We will be working closely with the independent agents and industry trade associations in Sacramento to accomplish that goal,” he added. PADIC will be represented by John Norwood, of Norwood and Associates.
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