Insurance trade groups have told California lawmakers that rate adequacy remains central to reducing reliance on the state’s insurer of last resort, as the California FAIR Plan continues to absorb business from the admitted market.
California FAIR Plan president Victoria Roach told the state Assembly’s Insurance Committee on January 28 that the residual market insurer now holds slightly more than 668,000 policies in force, with total exposure of about US$724 billion.
Written premium for the FAIR Plan rose from US$1.93 billion to US$1.96 billion in the final three months of 2025. Roach said growth had slowed compared with earlier in the year, citing a decline in bulk nonrenewals from admitted carriers.
The latest figures cap several years of rapid expansion.
According to FAIR Plan operational data cited by industry analysts, policies in force reached around 573,700 by March 2025, up 23% from September 2024, 74% from September 2023 and 139% from September 2021.
Other research drawing on PIPSO data estimates that FAIR Plan policies rose 276% between fiscal 2018 and 2024, while written premium climbed from roughly US$87 million to US$1.4 billion over the period.
California Department of Insurance data show the FAIR Plan held more than 140,000 policies in 2015 and about 330,000 residential policies by September 2023, or roughly 3–4% of the state’s homeowners market.
Policy exposure has climbed in tandem. A policy analysis from the Independent Institute put FAIR Plan exposure at about US$458 billion as of September 2024, against less than US$1.4 billion in annual written premium, underscoring the leverage in the system.
The FAIR Plan has moved to rebase its own pricing. In autumn 2025, it filed to raise home insurance rates by an average 35.8% from spring 2026, in what would be its largest increase in at least seven years. If approved, it would be the first time the plan incorporates wildfire catastrophe models and reinsurance costs into its rate application.
Despite the slower pace of new business, admitted market carriers say they still struggle to compete.
“You cannot depopulate the FAIR Plan when somebody maintains a FAIR Plan policy for 30 to 40 years because it is cheaper,” said Mark Sektnan, vice president of state government relations for the American Property Casualty Insurance Association (APCIA).
Sektnan told lawmakers that rate sheets presented to the committee showed FAIR Plan pricing had “not been adequate for years.”
The California Department of Insurance approved the use of forward-looking wildfire catastrophe models in August 2025 as part of Commissioner Ricardo Lara’s Sustainable Insurance Strategy.
According to industry statements, Verisk’s US wildfire model was the first tool to complete the CDI review process, followed by the Moody’s RMS US Wildfire Model in mid‑2025.
Sektnan said two companies had received approval for their plans under the new rules, with additional filings underway. He argued the changes should help reduce the flow of nonrenewals into the FAIR Plan, but warned that lasting depopulation would still hinge on rate reform.
“Hopefully we’ll be able to slow down at least the nonrenewals going into the FAIR Plan, but the depopulation of the FAIR Plan is going to require adequate rates,” he said.
