Jason Rosenthal, chair of Much’s Commercial Litigation group, spoke with Digital Insurance in an article about how the wildfires in Los Angeles, California, may renew a drumbeat for nationwide property reinsurance, catastrophe insurance, and risk pools.
Rosenthal noted that ratings of insurers’ financial health will become more important in California and in other states because insurers going insolvent after a crisis could overwhelm whatever backup guarantee funds states have. “Even in the best of times, I’m not sure I’d want to rely on a state guarantee fund to backstop the insurance company if it can’t pay the claim,” he said. “In addition to that, in many states, whether you can make a claim against such a fund may depend on whether that insurance company is admitted in that state. If they’re not, you may not have a claim against the guarantee fund if that insurer becomes insolvent.”