Negotiations are continuing in the California insurance industry, as the state’s Earthquake Authority (CEA) continues to seek a way to make up $2.183 billion first industry assessment layer. At its recent governing board meeting, held June 26, the CEA emphasized the urgency to maintain its claims paying capacity.
Insurance companies that sell CEA policies currently contribute funds to the CEA to help it insure for a 600-year event. However, the assessment layer is set to expire in December 2008.
At the meeting, representatives from the Association of California Insurance Companies, American Insurance Association and Personal Insurance Federation made statements that they would like to see the first industry assessment layer reduced after 2008. A representative from USAA insurance indicated that his company would prefer the first industry assessment layer be reduced to cover a 300-year event.
California Commissioner Steve Poizner expressed concerns with consumers’ take up rates for the earthquake insurance, and emphasized that despite the industry versus CEA’s differences, that it is important to work with insurers who are responsible for selling the earthquake insurance policies.
The CEA governing board ultimately directed its staff to continue negotiating the matter, with the goal of seeking legislation in 2007 that addresses the issue. All noted the time available to seek a legislative solution was limited, given how late it is in the current legislative session.
The next CEA board meeting is scheduled for July 24.
Was this article valuable?
Here are more articles you may enjoy.