Entity: State of California
Issue: Wildfires have wreaked havoc in California over the past several years. Due to inverse condemnation laws in the state, the investor-owned utilities (IOUs) are held strictly liable. As claims skyrocketed, the IOUs found themselves unable to cover the costs leaving the state of California compensate victims.
Solution: Marsh was the insurance brokerage for the largest utilities in the state and each was struggling with financial liquidity. On July 12, 2019, Governor Gavin Newsom signed Assembly Bill 1054 creating a $21 billion wildfire fund to pay claims on catastrophic losses should the IOUs became insolvent. Our reinsurance brokerage Guy Carpenter then structured the reinsurance program for the claims fund and our economic consulting firm, NERA, performed an economic analysis to determine appropriate surcharges and tariffs for ratepayers.
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