SACRAMENTO, Calif. - Some homeowners who suffered losses from the Camp Fire were insured by Merced Property & Casualty Company. The number of claims from the Camp Fire has overwhelmed the small insurer to the point of insolvency, said California's Insurance Commissioner, Dave Jones, on Friday.
In response, the Insurance Commissioner took expedited legal action to secure the assets of the company and to take control of it. Jones said this was done in an effort to protect the company's policyholders.
Jones says California law provides him with the authority to take over insurance companies facing insolvency. He said his first consideration was protecting Camp Fire policyholders who have already suffered through so much.
He said as soon as possible they will take control of the company, which will trigger the state law enabling the California Insurance Guarantee Association to immediately begin the process of evaluating losses and paying claims. He said once the court issues the requested order, the Conservation and Liquidation Office will notify policyholders about where and how to file a claim with CIGA for insured losses or the return of any unearned permium on thir policy.
While current insurance policies remain in-force for 30 days, anyone insured with Merced Property & Casualty Company should seek coverage with another insurer immediately, said Jones.
He also said that given the unprecedented scale of recent wildfires, he has directed his departmento to conduct detailed review of every property insurced in California to make sure they are properly managing their exposures.
The Insurance Commissioner said his department has not received any other reports of insolvent insurers.