Insurance Commissioner Ricardo Lara is set to approve State Farm's request for a nearly 22% rate increase on homeowners insurance in California, contingent on the company justifying this need in an upcoming public hearing. The request was necessitated by financial struggles following recent wildfires. Lara emphasized that State Farm must not shift the financial burden to its customers and ensure transparency in its operations. The company’s executives highlighted their precarious financial condition while indicating that they would not accept more policies even if the increase is sanctioned.
"State Farm claims it is committed to its California customers and aims to restore financial stability. I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers."
"We are at a crucial point in terms of the financial stability and viability of State Farm General," Schwamberger said, according to a transcript provided by the department. The company has over 1 million policies in the state.
"I think the short-term answer to that is: No," Schwamberger said, adding that it wouldn't be fiscally responsible for them to take on more policies if the rate increase is approved.
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