California's FAIR Plan — the insurer of last resort — is actually driving insurance companies away. Merritt's flagship CAL Reinsure program removes community wildfire risk from individual carriers, restoring competition and eliminating the need for the FAIR Plan entirely.
California's FAIR Plan, the insurance option of last resort, puts insurance companies operating in California on the hook for its funding shortfalls. Its very existence is driving insurance companies away from California. As carriers flee, Californians are left with fewer choices, higher premiums, and a system spiraling toward collapse.
The core issue is concentrated wildfire risk. No individual insurer wants to bear the catastrophic community-level risk of California wildfires. Until we address that structural problem, carriers will continue to leave — and consumers will continue to suffer.
We need to eliminate the need for the FAIR Plan and unblock our crisis by pulling community fire risk off the shoulders of insurance companies.
Merritt has developed a state-backed reinsurance authority modeled on proven programs that have already solved similar crises elsewhere:
CAL Reinsure applies the same proven approach to California's wildfire crisis. The program isolates community wildfire risk and moves it to a state reinsurance authority — letting insurers confidently write policies again while protecting consumers and stabilizing long-term rates.
CAL Reinsure absorbs the concentrated community wildfire risk that currently makes California too risky for carriers. With that catastrophic risk off their books, insurers can re-enter the California market, compete for customers, and offer affordable policies again. The reinsurance authority is funded through a combination of premiums and responsible state backing — just as it works in Florida and the UK.
This isn't theoretical. Florida faced a similar crisis when hurricanes drove insurers out of the state. Their state-backed reinsurance program brought carriers back and stabilized the market. The UK did the same with flood risk. California has the opportunity to adopt this proven model, tailored to our specific wildfire challenge, and solve our crisis the same way.
CAL Reinsure is the centerpiece of Merritt's reform agenda — because without solving the fundamental risk problem, nothing else can work.
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