Contents

58

California Regulators Working To Streamline

Property Rate Review After Legislation Failed

With carriers pulling out or not writing new coverage and property owners

flocking to the California FAIR Plan as their only option, the state’s property

insurance market is following what Insurance Commissioner Ricardo Lara

called an “unsustainable” path.

by Timothy Darragh

C

alifornia insurance regulators say they have

been working on ways to “streamline” the

rate review process for property insurance

rate requests after a late effort to craft an insurance

reform bill failed before the legislative session ended

in mid-September.

Insurance Commissioner Ricardo Lara said in a

statement his department has been working on a plan

to address the “unsustainable” path the state’s property

insurance market is following, with carriers pulling

out or not writing new coverage and property owners

flocking to the California FAIR Plan as their only

option.

“I have always been clear: Legislation is one of

many options that we have been pursuing,” Lara

said. “We also are moving forward with a package

of regulatory solutions that will streamline the

department’s rate review process, opening it equitably

to public input—not just the entrenched interests

that have benefited materially from the status quo.”

The discussion of modifying California’s rate

review process, which some carriers say is time-

consuming and costly, came as Assembly Speaker

Robert Rivas called for hearings to be held regarding

access to property insurance, the American Property

Timothy Darragh

is a senior associate editor. He can be reached at

timothy.darragh@ambest.com.

BEST’S REVIEW

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Casualty Insurance Association said.

Three of California’s top five homeowners

insurers have closed or limited access to new

policyholders: top writer State Farm, Allstate and

Farmers—which noted record-breaking inflation,

higher reconstruction costs and the impact of severe

weather events when it said it would limit new

policies in the line in its home state. They are joined

by subsidiaries of Berkshire Hathaway and James

River, which are exiting personal lines in California.

“California’s decades-old regulatory system is

outdated and in need of modernization to handle the

increasing catastrophic losses resulting from inflation,

climate change and extreme weather,” said Denni

Ritter, the

APCIA

department vice president for state

government relations.

Legislators, the insurance department, the

governor’s office and insurance trade groups for

weeks declined to discuss reported backroom talks to

put together a property insurance reform bill.

The APCIA has been outspoken about

California’s 35-year-old Proposition 103. Mark

Sektnan, APCIA vice president for state government

relations, has said the market needs more flexibility

than Prop 103 provides, including faster rate

approvals, accounting for reinsurance costs in rates

and using forward-looking modeling.

State Rate Filings

60

Group NameCompany NameAMB#

Overall

EffectEffective DateProgram

Liberty Mutual Insurance CosLiberty Mutual Insurance Cos0000608.10%7/21/2023Various Sublines

Liberty Mutual Insurance CosSafeco Insurance Company of America0024488.10%7/21/2023Various Sublines

Wawanesa General Insurance Co0119767.00%6

/5/2023N

on-Specific

USAA GroupUSAA Group0040806.90%5/15/2023Various Sublines

USAA GroupUSAA General Indemnity Company0048656.90%5/15/2023Various Sublines

USAA GroupUSAA Group0040806.90%5/15/2023Various Sublines

USAA GroupUnited Services Automobile Association0009346.90%5/15/2023Various Sublines

California Casualty GroupCalifornia Casualty Group0033356.90%11/1/2022Various Sublines

California Casualty GroupCalifornia Casualty Indemnity Ex

change0002226.90%11/1/2022Various Sublines

Kemper PC CompaniesKemper PC Companies0189086.90%10/21/2022Various Sublines

Kemper PC CompaniesKemper Independence Insurance Company0122136.90%10/21/2022Various Sublines

American Family Ins GroupAmerican Family Ins Group0001246.90%9/27/2023Non-Specific

American Family Ins GroupHomesite Insurance Co of the Midwest0221386.90%9/27/2023Non-Specific

Liberty Mutual Insurance CosLiberty Mutual Insurance Cos0000606.90%7/21/2023Non-Specific

Liberty Mutual Insurance CosGeneral Insurance Company of America0024476.90%7/21/2023Non-Specific

CSE Insurance GroupCSE Insurance Group0030236.90%6/15/2023Non-Specific

CSE Insurance GroupCSE Safeguard Insurance Company0019636.90%6/15/2023Non-Specific

Universal Ins Grp Puerto RicoUniversal Ins Grp Puerto Rico0186726.90%6/8/2023Non-Specific

Universal Ins Grp Puerto RicoUniversal North America Insurance Co0116006.90%6/8/2023Non-Specific

State Farm GroupState Farm Group0000886.90%6/1/2023Non-Specific

State Farm GroupState Farm General Insurance Company0024786.90%6/1/2023Non-Specific

Sutton National GroupSutton National Group0189476.90%3/1/2023Non-Specific

Sutton National GroupSutton National Insurance Company0206256.90%3/1/2023Non-Specific

Kemper PC CompaniesKemper PC Companies0189086.90%10/1/2022Non-Specific

Kemper PC CompaniesUnitrin Auto and Home Insurance Company0125606.90%10/1/2022Non-Specific

LD Investments GroupLD Investments Group0189486.90%7/24/2023Non-Specific

LD Investments GroupAegis Security Insurance Company0037166.90%7/24/2023Non-Specific

Travelers GroupTravelers Group0186746.40%12/22/2022Various Sublines

Travelers GroupStandard Fire Insurance Company0020026.40%12/22/2022Various Sublines

Amica Mutual GroupAmica Mutual Group0185225.60%8/23/2023Various Sublines

Amica Mutual GroupAmica Mutual Insurance Company0021625.60%8/23/2023Various Sublines

Liberty Mutual Insurance CosLiberty Mutual Insurance Cos0000605.30%7/21/2023Various Sublines

Liberty Mutual Insurance CosSafeco Insurance Company of America0024485.30%7/21/2023Various Sublines

Western Mutual Insurance PoolWestern Mutual Insuranc

e Pool0040665.20%1/1/2023Non-Specific

Western Mutual Insurance PoolResidence Mutual Insurance Company0025645.20%1/1/2023Non-Specific

Western Mutual Insurance PoolWestern Mutual Insurance Company0031395.20%1/1/2023Non-Specific

Liberty Mutual Insurance CosLiberty Mutual Insurance Cos0000604.70%7/21/2023Various Sublines

Liberty Mutual Insurance CosSafeco Insurance Company of Illinois0027094.70%7/21/2023Various Sublines

QBE North America Ins GroupQBE North America Ins Group0056584.00%1/31/2023Non-Specific

QBE North America Ins GroupQBE Insurance Corporation0027394.00%1/31/2023Non-Specific

Allstate Insurance GroupAllstate Insurance Group0000084.00%9/12/2023Non-Specific

Allstate Insurance GroupAllstate Insurance Company0020174.00%9/12/2023Non-Specific

Insurance Services Oce0118893.60%10/12/2022Various Sublines

American Family Ins GroupAmerican Family Ins Group0001243.60%8/1/2023Various Sublines

American Family Ins GroupHomesite Insurance Company of California0222343.60%8/1/2023Various Sublines

USAA GroupUSAA Group0040803.50%8/15/2023Various Sublines

USAA GroupUSAA Casualty Insurance Company0040493.50%8/15/2023Various Sublines

Liberty Mutual Insurance CosLiberty Mutual Insurance Cos0000602.60%7/21/2023Various Sublines

Liberty Mutual Insurance CosFirst National Insurance Co of America0024462.60%7/21/2023Various Sublines

Note: The State Rate listings include multiple rows with the filing company (or companies) and its group together.

Source: Best’s State Rate Filings; data as of Oct. 2, 2023.

—Patricia Vowinkel

Scan for the full list or to get more on this and other Best’s State Rate Filings.

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State Rate Filings

62

Author: Success Begins With Envisioning

Yourself, Your Business and Your Workforce

Lionsmark Capital CEO Darren Sugiyama discusses what’s

needed to build a thriving insurance agency.

How I Built a $37 Million Insurance

Agency in Less Than 7 Years

(Second Edition)

In 2003, Darren Sugiyama built

Apex Outsourcing Insurance

Services with nothing more

than a cellphone, an unorthodox

business plan and an abundance

of ambition. In just seven years,

he grew the group health

insurance agency to more than

$37 million in annual sales, and

later employed many of the

same strategies he used in

creating Apex to build DaVinci

Financial & Insurance Associates

and Lionsmark Capital.

Sugiyama, now the CEO of Lionsmark Capital, said

creating a successful agency begins by identifying the

type of person you want to be, what your business model

will look like, the types of agents you hope to recruit, and

what boundaries you plan to set. He discusses those

strategies in his book,

How I Built a $37 Million Insurance

Agency in Less Than 7 Years (Second Edition)

.

Following is an edited transcript of an interview with

Sugiyama.

mine who was making over $1 million a year selling life

insurance. I tracked him down, verified it was true and

thought, “If this guy could do it, maybe I can do it, too.”

in Hawaii. I was figuring things out as I went along.

recent college graduates. My business model was based

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version of me going through our entire sales pitch and said,

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with a song. Over time, you’re going to get the cadence,

How did you build Apex Outsourcing Insurance

Services?

I heard a rumor about a Little League Baseball coach of

I immediately began building an agency which, looking

back, was a very naive thing to do because I didn’t have any

experience in insurance. I used to be a high school teacher

The recruiting side was pretty rough. I decided to focus on

script that they had to memorize. I burned onto a CD a

inflection and memorization of the content down.”

What challenges did you face along the way and

how did you overcome those hurdles?

Initially, I didn’t have any money and was running my

business out of hotel lobbies. The business was 100%

commission with 1099 agents. Being able to inspire

someone that it made more sense to go straight

commission with me because the earning potential was

much greater than taking a corporate job with a salary

was challenging, especially [before] the mortgage crisis.

I had to develop and articulate an almost bigger-than-life

vision of what we were building to convince young adults

to come over and work on straight commission. It took

about a year and a half for them to get a respectable

income with just enough to pay their bills. It took about

2 1/2 to three years for them to hit six figures, and then,

beyond that, they did extremely well.

AM Best TV

Visit

bestsreview.ambest.com

to watch

the interview with Darren Sugiyama.

—Lori Chordas

Lori Chordas

is a senior associate editor. She can be reached at

lori.chordas@ambest.com

.

AM Best Business Trilogy

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Panelists To Discuss Insurers’ Methods for Expert Cost

Control in Construction Defect Claims

Professionals also explore innovation’s impact on small commercial insurance

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How Insurers Are Controlling Expert

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