I imagine this won't apply if the insurer just leaves the state.

Yep. These are terms to operate as an insurance company in the state. If you don't want to do that, the rules have no bearing on you.

Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas. Premia across the board will increase as a result.

Typical California redistribution...but this is from the bottom to the top.

> Which effectively means that anybody in a less risky area of California is just subsidizing those who live in the risky areas.

Do you not understand that this is precisely how insurance works?

No. That’s not subsidization.

Of course insurance is about pooling risk. But subsidizing implies you’re doing it below market rates.

If I pay my market rate but still -EV insurance premium, I’m not subsidizing anyone. I’m just happy to pay for the convexity insurance provided.

If I have to pay 20% more than I otherwise would, because the insurance company can’t charge someone else 20% more, that is actual subsidization.

A subsidy distorts natural market forces. This is what I am talking about.

Don’t be so quick to be a dick.