Insurance commissioner: carriers slow to use wildfire options in AB376; state to convene experts

NevadaInsurance Commissioner Ned Gaines told the Joint Interim Committee on Commerce and Labor that the regulatory tools enacted in Assembly Bill 376 have not yet been used by insurers to change how wildfire risk is sold in Nevada.

"To date, no insurance company doing business in Nevada has carved out wildfire from their homeowner policy," Gaines said on the record, describing AB376which the committee earlier heard creates a regulatory "sandbox" and allows, with prior approval, alternative structures for wildfire coverage.

Gaines told the committee that carriers have sought significant rate increases in some filings — including a request described in committee testimony as a roughly 45% homeowners increase — but the Division of Insurance has pushed back; in one recent filing the division approved "a little over 9%," Gaines said.

DBI Director Chris Sanchez said the agencies are "not happy" with the pace of insurer responses and announced the state will convene a set of regional and technical conversations with fire chiefs, mitigation experts and industry stakeholders to examine risk assessment, mitigation technologies and policy responses. "We are starting that effort in earnest," Sanchez said, and he and Gaines committed to return to the committee with developments.

Gaines and Sanchez discussed alternatives the state is examining if private-market wildfire coverage retracts from some properties, including catastrophe bonds, reinsurance structures or state-facilitated secondary markets, and stressed that any market intervention would require careful design and partner buy-in.

What’s next: Director Sanchez said the state will begin convening expert meetings in the coming weeks and will brief the committee on progress; Gaines encouraged constituents who have been denied coverage to contact the Division of Insurance for case review and market-conduct follow-up.