Some insurance companies have recently paused writing new homeowners policies in California. The market has faced deteriorating losses in the wake of wildfires and other disasters, leading to greater insurance payouts. In September, the California Department of Insurance announced a set of reforms to support the market. In this article published in “Carrier Management,” we review the impacts of California’s prohibition of reinsurance costs from both a theoretical and practical perspective, discussing the following:

• Capital adequacy needs: direct capital versus reinsurance
• Insurance filings and the cost of reinsurance
• The costs of excluding reinsurance
• What's next?

Read the full article here