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STATE OF CALIFORNIA
DEPARTMENT OF INSURANCE
300 Capitol Mall, 17th Floor
Sacramento, CA 95814
STATEMENT OF REASONS
NET COST OF REINSURANCE AND RATEMAKING
December 27, 2024 REG-2024-00016
Exempt Rulemaking
Pursuant to Government Code section 11340.9(g), this proceeding is exempt from the
rulemaking provisions of the Administrative Procedure Act.
EXPLANATION OF THE NEED FOR IMMEDIATE ACTION
Addressing the increased climate risks to California communities is a high priority for the state,
especially because wildfire risks have had significant consequences for insurance availability and
affordability in recent years.
Climate change has made California hotter and drier over the last several decades, resulting in
more frequent wildfires of greater intensity.1 Since 2017, California has experienced the eight
largest wildfires in state history,2 thirteen of the most destructive wildfires,3 and seven of the
deadliest wildfires, which includes the Camp Fire - the single deadliest wildfire in the history of
the state resulting in the loss of 85 lives.4
As the frequency and severity of these growing climate threats increased, California’s insurers
began making new and different business decisions that further exacerbated the insurance
availability issues experienced by consumers. Data collected by the California Department of
Insurance (Department) shows that the annual number of non-renewals by insurance
1 Governor Gavin Newsom, “EXECUTIVE ORDER N-13-23,” Executive Department of the State of California,
accessed December 21, 2024, https://www.gov.ca.gov/wp-content/uploads/2023/09/9.21.23-Homeowners-
Insurance-EO.pdf
2 "Top 20 Largest California Wildfires," California Department of Forestry and Fire Protection, accessed August 2,
2024, https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/calfire-website/our-
impact/fire-statistics/top-20-largest-ca-
wildfires.pdf?rev=0899d8b12f964f8aaa90f912bf07d41b&hash=860D259F6863891425BB451612F52BF2
3 "Top 20 Most Destructive California Wildfires," California Department of Forestry and Fire Protection, accessed
December 21, 2024, https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/calfire-
website/our-impact/fire-statistics/top-20-destructive-ca-
wildfires.pdf?rev=9e4974c273274858880c2dd28292a96f&hash=29E21CBFCE8D9885F606246607D21CEB
4 "Top 20 Deadliest California Wildfires," California Department of Forestry and Fire Protection, accessed
December 21, 2024, https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/calfire-
website/our-impact/fire-statistics/top-20-deadliest-ca-
wildfires.pdf?rev=dddeac543dd84d21a4b01ad6bed5f48c&hash=6A2BD57BB8EC29DB9EC0C94F92B00F52

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