The decision, which Insurance Commissioner Ricardo Lara accepted, grants the company a $400 million cash infusion from its parent company and outlines a 17% increase for homeowners policies, lower than State Farm's initial proposal of 21.8%. According to the California Department of Insurance, the judge believed that State Farm had evidence of "extraordinary financial distress."
"State Farm must now justify its financial condition and detail its recovery plan in a full rate hearing before a neutral judge and my Department's experts," Lara said in a statement.
Following the request, State Farm faced backlash from Eaton Fire survivors over apparent insurance payment delays. State Senator Sasha Renée Pérez, who represents the burn scar residents, asked for the state to delay the decision until an expedited investigation into the complaints in April.
Lara, who has also faced backlash over the request, assured residents that he weighed the options before adopting the decision.
The company also agreed to "refrain from implementing new block non-renewal programs through the end of 2025," according to the California Department of Insurance.
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