FAIR Plan secrets: New bill would force transparency after CBS News California investigation

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A twelvemonth aft CBS News California Investigates exposed concerning secrecy wrong the California FAIR Plan, authorities Insurance Commissioner Ricardo Lara is making bully connected his committedness to alteration authorities law.

Lara announced legislation connected Monday to necessitate much accountability and transparency from the state's insurance of past resort.

The connection follows a caller Department of Insurance introspection that recovered the FAIR Plan failed to instrumentality much than a twelve cardinal recommendations related to governance, fiscal oversight, and user protections.

The Make It FAIR Act would mandate nationalist entree to FAIR Plan governing committee meetings and documents, including the instauration of an yearly nationalist study — a transparency request prompted by CBS News California's probe into the plan's secrecy. That yearly study would beryllium required to disclose accusation astir the FAIR Plan's finances, governance structure, catastrophe effect plans, and lawsuit work performance.

The authorities would besides necessitate the program to marque sweeping changes, including offering a much broad homeowners security argumentation akin to backstage insurers, hiring further unit to velocity up claims and complaints, improving programs meant to determination policyholders backmost into the regular security market, requiring ceremonial assessments of its fiscal vulnerability to aboriginal disasters, and adopting a three-to-five-year strategical program to amended hole for aboriginal wildfires and storms.

The FAIR Plan is expected to beryllium California's security of past resort, but we recovered it is present the lone enactment for many, adjacent successful low-fire-risk areas.

Now, those of america with regular security are connected the hook for the FAIR Plan's debt, but we bash not person the close to spot its finances oregon find retired what happens successful the concealed committee meetings, wherever the large security companies marque each the decisions.

Because a nonprofit relation of backstage insurers runs the California FAIR Plan, its records and meetings person historically been shielded from nationalist presumption nether authorities law.

Just down the thoroughfare from Helen Meisel's Pacific Palisades home, the vicinity is inactive scarred by the Los Angeles wildfires.

Meisel said she has "mixed emotions" implicit the information that her location was near lasting from the fires. Months earlier the fires, Meisel said she was forced to power to the FAIR Plan, which costs much and covers less.

"Double, much than treble of what I was paying," she said. "I'm paying 2 policies, and I person not received a penny."

Sarah, who lone wanted to beryllium identified by her archetypal name, was a first-time homeowner whose location survived a wildfire. But she said the FAIR Plan near her feeling similar she would person been amended disconnected if it had burned down.

"They astir made maine consciousness similar I was going crazy," Sarah said.

Ken and Lisa, who besides wanted to beryllium identified lone by their archetypal names, were hoping to bargain their imagination location successful a low-fire-risk country but couldn't get insurance.

"They said, 'I'm sorry, you're denied.' I was successful shock," Lisa said.

Former Insurance Commissioner Dave Jones said the crushed Californians should attraction astir this "is that we're present connected the hook, each of us, successful lawsuit the just program runs retired of money." And it did.

Jones added that the much homes forced onto the FAIR Plan, the harder it volition beryllium to screen claims aft large disasters.

"Since we're each connected the hook, we ought to beryllium capable to spot what's successful those fiscal statements," Jones said.

That was the bosom of our CBS News California investigation, which recovered that the California FAIR Plan is the lone insurer successful the authorities that does not publically disclose its financials. It's besides the lone FAIR Plan successful the state without nationalist committee meetings, minutes, audits, and reports.

We asked security manufacture typical Rex Frazier to measurement successful connected our concerns.

"What bash you accidental to the statement that since we're each connected the hook, we ought to beryllium capable to spot those fiscal statements?" CBS News California investigative analogous Julie Watts asked. "We ought to beryllium privy to the enforcement committee meetings."

"You tin recognize however idiosyncratic would person that opinion, but that's not the instrumentality today," Frazier said. "If you're suggesting the instrumentality should beryllium changed, spell retired and marque that argument."

We didn't request to due to the fact that the security commissioner saw our reporting. Lara agreed that Californians being connected the hook for the FAIR Plan's indebtedness but not being allowed entree to the plan's financials "should not beryllium legal."

Following that interview, the FAIR Plan agreed to voluntarily summation transparency, but the lone mode to guarantee accountability is to amend authorities law.

"Can you perpetrate that erstwhile you travel backmost and sponsor authorities earlier the extremity of this session, that it volition necessitate the just program to beryllium astatine slightest arsenic transparent arsenic its subordinate companies?" Watts asked.

"One 100 percent," Lara responded.

For Meisel, the projected authorities is simply a large measurement forward.

"It needs to beryllium accountable," she said.

For Sarah, it is astir healing, but she said "what they enactment maine through" is "pretty traumatic." Lisa warns that without enactment by lawmakers, "everybody's astatine risk. They tin driblet you similar that."

Keep successful mind, this is conscionable the archetypal draft. It volition undoubtedly look opposition, and we volition beryllium covering the process and exposing what happens down closed doors arsenic this measure makes its mode done the legislature.

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