California's insurance market is undergoing a period of regulatory change as policymakers work to improve access to coverage amid wildfire exposure, rising costs, and pressure on the traditional insurance system. The state's Department of Insurance says its Sustainable Insurance Strategy is designed to expand availability, incorporate forward-looking catastrophe models, and improve the rate-review process. Its February 2026 market snapshot reported 668,609 homeowner and commercial policies in the FAIR Plan and 28 homeowners rate filings under review in the first quarter of 2026. These figures illustrate why regulatory design remains closely connected to the everyday question of whether Californians can obtain coverage.
The regulatory framework dates to Proposition 103, approved by California voters in 1988. The law established a prior-approval system for many property and casualty insurance rates, requiring Department of Insurance review before rates can be used. The framework was created for consumer protection and market oversight, while today's market presents risks and data sources that were less developed when the law was adopted. Recent reforms have introduced catastrophe modeling, changes to reinsurance treatment, and adjustments to rate-review procedures.
