The California property insurance market is in a precarious position, largely due to the lack of political will from both the California Department of Insurance and the California State Legislature. Instead of addressing the issues head-on, both entities are deflecting responsibility, exacerbating an already unpopular political problem.

Three fundamental issues currently plague the California insurance market:

1. Outdated Data Models: Despite predictive data models being more accurate than 20-year historical data, it remains illegal to use these advanced models to justify rate changes to the Department of Insurance.
2. Prolonged Rate Change Requests: The process from rate change request to implementation takes a staggering 28 months. In a rapidly inflating market, the Department of Insurance must cut this time down to the national industry standard of 90 days.
3. Reinsurance as a Non-Business Expense: Under current guidelines, reinsurance—used to distribute risk to third-party insurers in the event of large catastrophes—is not considered a business expense when making a rate change case.

Addressing these three issues is essential for encouraging major carriers like State Farm and Allstate to reenter the property insurance market in California.