Exhibit 1 State Farm General Insurance Company California

Exhibit 1

State Farm General Insurance Company

California Homeowners

Filing History

The following are the California Department of Insurance filing numbers submitted for

this line in the past three years.

Filing Date Department Filing Number

02/05/24 24-426

02/28/23 23-613***

01/11/23 23-299*

06/02/22 22-1514***

01/17/22 22-428*

09/01/21 21-2474

08/26/21 21-2333

06/23/21 21-1808*

04/29/21 21-1404**

04/29/21 21-1402

* Utilizes the following models:

Underwriting Eligibility - CoreLogic Brushfire

** Utilizes the following models:

Underwriting Eligibility - CoreLogic Brushfire

Wildfire - CoreLogic RQE and AIR Touchstone

Fire Following Earthquake - CoreLogic RQE, RMS RiskLink, and AIR Touchstone

Non-Catastrophe Territory - GRID Fire Model

*** Utilizes the following models:

Underwriting Eligibility - CoreLogic Brushfire

Wildfire - CoreLogic RQE, AIR Touchstone, and Impact Forecasting ELEMENTS

Fire Following Earthquake - CoreLogic RQE, RMS RiskLink, and AIR Touchstone

Non-Catastrophe Territory - GRID Fire Model

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

Please refer to the Filing Memorandum for the details of changes to our Underwriting Guidelines.

Currently, only the Homeowners policy form is impacted by non-renewals. Renters and Condominium

Unitowner programs are unaffected by these changes.

These changes do not have a material rate impact.

Rate impact was measured by estimating the relative rate need for the non-renewed policies compared

to the remainder of the book using the currently implemented Location Rating Factors (LRFs), approved

in State Tracking #23-613, compared to the indicated LRFs.

Please refer to our prior rate filing, State Tracking #23-613, for additional support regarding the current

rate level. In that filing, State Farm filed a +29.0% Non-Tenant indication and obtained approval for a

+20.8% rate increase. These underwriting guideline changes do not impact the appropriateness of the

current rate level.

Although State Farm General Insurance Company is providing the underwriting eligibility guidelines

based on prior agreement, we disagree that California law requires underwriting guidelines to be filed

publicly. Public disclosure to competitors of eligibility criteria that constitute confidential trade secret

information is bad public policy and impairs competition.

While we have marked this application as prior approval in the attached affidavit, we are not submitting

the underwriting guidelines for approval. Underwriting guidelines are submitted for review only insofar

as they relate to rates currently on file with the California Department of Insurance.

The following table shows the impacted policies by ZIP code as requested in the Questionnaire for

Homeowners or Residential Property:

(0)

(1)

(2)

(3) = (2) / (1)

ZIP Code

Policy

Count

Number of Non-

Renewed Policies

% of Non-Renewed Policies

90024

466

30

6.4%

90027

987

7

0.7%

90046

1,163

64

5.5%

90049

2,114

1,301

61.5%

90068

1,655

15

0.9%

90069

545

29

5.3%

90077

987

665

67.4%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

90210

1,515

698

46.1%

90265

1,104

518

46.9%

90272

2,342

1,626

69.4%

90274

2,245

2

0.1%

90290

206

53

25.7%

90402

669

82

12.3%

90631

2,734

2

0.1%

91001

2,297

70

3.0%

91006

1,581

49

3.1%

91008

124

37

29.8%

91010

931

2

0.2%

91011

1,809

150

8.3%

91016

1,711

27

1.6%

91024

810

21

2.6%

91103

818

5

0.6%

91105

729

6

0.8%

91107

1,879

134

7.1%

91201

550

1

0.2%

91206

1,105

2

0.2%

91207

606

1

0.2%

91208

1,403

3

0.2%

91214

1,629

19

1.2%

91301

1,519

281

18.5%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

91302

1,805

1,090

60.4%

91304

1,178

166

14.1%

91307

1,055

81

7.7%

91311

1,807

274

15.2%

91316

893

254

28.4%

91320

2,623

46

1.8%

91321

1,057

24

2.3%

91326

1,251

211

16.9%

91344

2,152

30

1.4%

91351

1,288

5

0.4%

91352

1,200

2

0.2%

91356

1,075

542

50.4%

91360

2,233

24

1.1%

91361

1,626

310

19.1%

91362

2,410

409

17.0%

91364

1,432

200

14.0%

91367

1,111

19

1.7%

91377

858

7

0.8%

91381

986

6

0.6%

91387

1,672

12

0.7%

91390

1,354

5

0.4%

91403

826

92

11.1%

91423

990

68

6.9%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

91436

1,081

433

40.1%

91501

559

3

0.5%

91504

987

7

0.7%

91602

406

1

0.2%

91604

1,301

164

12.6%

91709

3,248

8

0.2%

91711

1,782

1

0.1%

91741

1,486

41

2.8%

91745

2,012

4

0.2%

91750

1,558

6

0.4%

91759

73

10

13.7%

91765

1,884

30

1.6%

91773

1,466

3

0.2%

91901

784

52

6.6%

91902

646

4

0.6%

91914

628

45

7.2%

91916

78

1

1.3%

91935

452

78

17.3%

91941

1,266

19

1.5%

91942

956

5

0.5%

91978

244

4

1.6%

92003

162

11

6.8%

92009

1,880

10

0.5%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

92014

766

8

1.0%

92019

1,383

37

2.7%

92020

1,173

35

3.0%

92021

1,542

135

8.8%

92024

2,268

61

2.7%

92025

968

25

2.6%

92026

1,404

19

1.4%

92027

1,534

4

0.3%

92028

1,725

4

0.2%

92029

931

23

2.5%

92037

1,512

4

0.3%

92040

1,518

164

10.8%

92064

1,810

97

5.4%

92065

1,996

48

2.4%

92067

1,260

643

51.0%

92069

1,192

1

0.1%

92071

1,790

31

1.7%

92075

398

1

0.3%

92078

1,697

4

0.2%

92082

668

20

3.0%

92084

1,531

3

0.2%

92091

161

70

43.5%

92102

536

1

0.2%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

92103

925

35

3.8%

92104

902

12

1.3%

92110

600

1

0.2%

92115

1,059

42

4.0%

92116

899

70

7.8%

92117

1,951

7

0.4%

92119

998

59

5.9%

92120

1,327

40

3.0%

92122

831

4

0.5%

92123

721

9

1.2%

92124

975

129

13.2%

92126

1,366

2

0.1%

92127

1,752

13

0.7%

92128

1,414

21

1.5%

92129

1,853

24

1.3%

92130

1,694

48

2.8%

92131

1,875

110

5.9%

92315

1,118

1

0.1%

92317

65

2

3.1%

92322

48

7

14.6%

92325

399

34

8.5%

92346

1,771

1

0.1%

92352

829

262

31.6%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

92373

1,364

22

1.6%

92382

339

22

6.5%

92385

15

8

53.3%

92391

169

11

6.5%

92399

1,941

13

0.7%

92404

922

4

0.4%

92506

2,084

1

0.0%

92530

1,081

4

0.4%

92549

571

2

0.4%

92562

2,083

62

3.0%

92590

207

27

13.0%

92592

2,398

1

0.0%

92602

1,177

1

0.1%

92603

906

23

2.5%

92607

1

100.0%

92625

936

2

0.2%

92651

2,383

8

0.3%

92657

1,003

101

10.1%

92672

1,424

2

0.1%

92676

70

2

2.9%

92677

2,651

1

0.0%

92679

2,066

88

4.3%

92694

1,518

1

0.1%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

92705

2,158

3

0.1%

92807

1,798

6

0.3%

92860

1,209

1

0.1%

92869

1,647

6

0.4%

92881

1,215

10

0.8%

92882

1,611

3

0.2%

92883

1,129

2

0.2%

93001

947

2

0.2%

93003

1,918

10

0.5%

93012

1,712

82

4.8%

93013

433

6

1.4%

93015

664

4

0.6%

93021

2,117

54

2.6%

93022

348

2

0.6%

93023

855

16

1.9%

93060

919

2

0.2%

93063

2,110

56

2.7%

93065

3,531

29

0.8%

93067

69

5

7.2%

93101

481

7

1.5%

93103

676

74

10.9%

93105

1,093

46

4.2%

93108

520

149

28.7%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

93109

596

7

1.2%

93110

742

29

3.9%

93111

988

38

3.8%

93117

1,091

4

0.4%

93444

1,156

1

0.1%

93920

90

7

7.8%

93925

24

1

4.2%

94022

1,558

26

1.7%

94024

1,779

18

1.0%

94027

541

1

0.2%

94028

1,018

25

2.5%

94062

2,483

12

0.5%

94102

34

1

2.9%

94103

63

1

1.6%

94109

158

1

0.6%

94110

1,765

2

0.1%

94114

1,279

2

0.2%

94115

355

7

2.0%

94116

2,248

2

0.1%

94118

968

21

2.2%

94121

1,439

1

0.1%

94122

2,105

1

0.0%

94123

488

2

0.4%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

94127

1,555

2

0.1%

94131

1,475

1

0.1%

94304

63

1

1.6%

94506

2,071

251

12.1%

94507

1,822

270

14.8%

94508

83

12

14.5%

94515

309

146

47.2%

94516

31

18

58.1%

94517

1,005

10

1.0%

94526

2,543

200

7.9%

94528

152

85

55.9%

94530

1,302

6

0.5%

94534

2,347

1

0.0%

94539

1,607

1

0.1%

94546

1,972

2

0.1%

94549

3,142

956

30.4%

94551

1,974

2

0.1%

94552

804

8

1.0%

94553

2,779

65

2.3%

94556

1,438

167

11.6%

94558

4,137

71

1.7%

94563

3,115

1,703

54.7%

94566

2,155

4

0.2%

©, Copyright, State Farm Mutual Automobile Insurance Company 2024

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

94568

1,515

3

0.2%

94573

11

2

18.2%

94574

387

105

27.1%

94576

4

2

50.0%

94583

1,773

58

3.3%

94586

137

2

1.5%

94588

1,213

10

0.8%

94595

694

24

3.5%

94602

1,659

2

0.1%

94605

2,165

22

1.0%

94610

1,054

4

0.4%

94611

2,457

444

18.1%

94618

1,083

11

1.0%

94619

1,341

42

3.1%

94704

182

24

13.2%

94705

870

183

21.0%

94707

1,276

91

7.1%

94708

1,390

184

13.2%

94709

198

7

3.5%

94803

1,408

2

0.1%

94904

858

7

0.8%

94930

732

1

0.1%

94941

2,966

25

0.8%

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

94951

260

2

0.8%

94954

1,886

3

0.2%

94957

207

10

4.8%

95003

2,560

505

19.7%

95005

984

311

31.6%

95006

1,316

273

20.7%

95007

92

43

46.7%

95014

2,121

6

0.3%

95018

1,134

497

43.8%

95020

2,634

10

0.4%

95030

1,259

161

12.8%

95032

1,510

14

0.9%

95033

1,587

1,035

65.2%

95037

2,774

6

0.2%

95041

84

38

45.2%

95060

2,755

477

17.3%

95062

1,536

2

0.1%

95065

661

208

31.5%

95066

1,379

443

32.1%

95070

2,515

154

6.1%

95073

953

363

38.1%

95076

2,488

181

7.3%

95120

2,480

10

0.4%

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

95223

1,406

2

0.1%

95247

390

2

0.5%

95370

2,372

11

0.5%

95379

220

1

0.5%

95383

403

2

0.5%

95401

1,115

1

0.1%

95403

1,768

298

16.9%

95404

1,557

664

42.6%

95405

1,064

212

19.9%

95409

1,592

758

47.6%

95441

135

6

4.4%

95442

442

96

21.7%

95448

1,262

43

3.4%

95451

624

1

0.2%

95452

155

76

49.0%

95476

2,383

83

3.5%

95492

1,476

104

7.0%

95602

1,382

32

2.3%

95603

2,173

9

0.4%

95613

21

2

9.5%

95614

459

21

4.6%

95619

289

1

0.3%

95631

262

16

6.1%

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

95633

105

3

2.9%

95634

77

2

2.6%

95635

48

4

8.3%

95648

3,551

1

0.0%

95651

50

2

4.0%

95667

2,170

8

0.4%

95669

109

1

0.9%

95703

166

9

5.4%

95709

358

3

0.8%

95713

776

81

10.4%

95717

5

1

20.0%

95722

333

23

6.9%

95736

4

100.0%

95762

3,453

4

0.1%

95922

26

1

3.8%

95924

1

100.0%

95928

1,543

1

0.1%

95945

2,200

566

25.7%

95946

1,665

105

6.3%

95949

2,066

636

30.8%

95954

191

1

0.5%

95959

1,265

444

35.1%

95960

14

1

7.1%

No reproduction of this copyrighted material allowed without express written consent from State Farm®

State Farm General Insurance Company Exhibit 18

California Homeowners

Rules and Underwriting Guidelines

95975

98

38

38.8%

95977

143

1

0.7%

96001

1,917

46

2.4%

96002

1,410

1

0.1%

96003

1,785

6

0.3%

96007

1,008

1

0.1%

96019

405

1

0.2%

96073

330

3

0.9%

96087

52

7

13.5%

96150

1,924

1

0.1%

96161

3,098

41

1.3%

Other Zip

Codes Not

Impacted

by this

Filing

859,013

0

0.0%

No reproduction of this copyrighted material allowed without express written consent from State Farm®

March 20, 2024

The Honorable Ricardo Lara

Commissioner of Insurance

California Department of Insurance

300 Capitol Mall, 17

th

Floor

Sacramento, CA 95814

via email: commissionerlar[email protected]ov

Re: Restoring the financial condition of State Farm General Insurance Company

Dear Commissioner Lara,

Thank you for your recent meeting with us and the candid conversation. On behalf of State Farm

General Insurance Company (SFG)

1

, we write to reinforce our need, and express hope and appreciation,

for the role the Department of Insurance must play in our financial recovery, to the benefit of California

consumers.

As we discussed, SFG’s capital position has severely deteriorated, and we are increasingly concerned

about its financial well-being. SFG’s policyholder surplus was $2.2 billion and $1.3 billion at year-end

2022 and 2023 respectively, in contrast to $4.1 billion at year-end 2016. Although there haven’t been

significant wildfire losses for several years, windstorm catastrophes in early 2023 and increasing trends

in non-catastrophe water losses and liability claims (especially commercial lines and personal umbrella

policies), without the additional premium needed to support those cost increases, have generated large

underwriting losses. SFG has managed its policy growth by limiting writing in high-risk areas for many

years, and more recently by ending all new policy sales. However, SFG’s risk exposure grew

tremendously in the last few years, with construction cost inflation being a major driver. Taken together,

these trends have resulted in surplus of less than 50 cents for every dollar of risk (as measured by net

written premium) we face today, which makes SFG’s financial strength less than a quarter of what it was

at year-end 2016. With that drop in surplus and increase in exposure, the company necessarily has to

rely increasingly on reinsurance cover, the cost of which puts further downward pressure on surplus

without the needed additional premium to support this cost.

As also noted, external measures of SFG’s financial strength are also becoming increasingly concerning.

AM Best already had a negative ratings outlook for SFG and continues to review the financial condition

of SFG to determine if additional action is needed. At certain financial strength rating levels, acceptance

of SFG policies as appropriate insurance cover for mortgage collateral may diminish. This has the

potential to affect existing SFG policyholders across California. Additionally, to comply with solvency

regulations, SFG is required to file a Company Action Plan by April 15

th

with the Illinois Department of

Insurance (SFG’s solvency regulator) to explain the company’s plan to restore its financial condition.

1

As a reminder, SFG is almost exclusively a California-only insurer.

Exhibit 19

As we look to continue to serve the insurance needs of Californians, we seek the Department’s

assistance in helping to rebuild the company’s financial strength. We recognize and appreciate the

positive impact of the Department’s recent homeowners rate approval. Of course, the full effect of that

new rate on SFG’s surplus position won’t begin until March 2025, since the rate is applied to policies as

they renew on a rolling 12-month basis. And it’s clear more rate is still needed, as market conditions

have not remained static since we made our last filing supporting the recently approved increase in

February of 2023. Insurance is not insulated from inflationary trends affecting goods across the entire

economy. In fact, construction cost increases have been among the highest inflationary categories over

the last five years. Short of emergency rate regulations being issued very soon, the limitations of CDI’s

current rate template may necessitate the next homeowners rate filing to rely on one or more

variances. While there will undoubtedly be novel issues to work through, rapid review and approval of a

new rate appropriate to the circumstances – along with all other upcoming and pending SFG rate filings

– will be critical to SFG’s survival, especially in light of potential intervenor delays.

As shared with the Department prior to the February 2023 filing, rate increases alone would likely be

insufficient to restore SFG’s financial strength. We must now take action to reduce our overall exposure

to be more commensurate with the capital on hand to cover such exposure, as most insurers in

California have already done. We have been reluctant to take this step, recognizing how difficult it will

be for impacted policyholders, in addition to our independent contractor agents who are small business

owners and employers in their local California communities. Rebuilding capital, even with higher rates,

will take some time. We are striving to minimize the impact of the necessary actions that must be taken.

We will continue to be transparent with you and your staff regarding these actions.

You and your Department are an indispensable part of broader market reforms that could eventually

allow SFG to resume its normal place in that market. As you have pointed out, California residents are

best served in the long run by a fair and well-functioning insurance market, a key component of which is

that consumers bear the economic reality of the true costs to insure their property. California

homeowners insurance premiums are still below the national average, and far below other disaster-

prone states. We understand the impact of higher prices on consumers. At the same time, we are even

more concerned with availability of insurance.

We recognize the Department’s ongoing efforts to pursue implementation of your Sustainable Insurance

Strategy, including the allowance for catastrophe modeling and reinsurance costs in ratemaking and

improving rate filing procedures and timelines. Along with addressing the uncapped financial exposure

of FAIR Plan assessments, such reforms could materially improve the health of the market, particularly if

they allow for more nimble insurer pricing in response to sudden changes in market conditions. We are

acutely aware of the political challenges that the actions needed to improve SFG’s financial position

pose to broader reform efforts. Please know that we have an ongoing desire and commitment to

collaborate with you and your staff, as well as the Governor’s office, to achieve these reforms as quickly

as possible. We cannot overstate, and we agree with your public plea for, the need for regulatory

modernization.

Denise Hardin

President and Chief Executive Officer

State Farm General Insurance Company

Mark Schwamberger

Vice President and Treasurer

State Farm General Insurance Company

Keesha-Lu Mitra

General Counsel

State Farm General Insurance Company

CC: Michael Martinez, Chief Deputy Commissioner

The swift capital depletion of SFG is an alarm signaling the grave need for rapid and transformational

action, including the critical need for rapid review and approval of currently pending and future rate

filings. We take very seriously our responsibility to be there for customers who experience a claim and

our actions are with that goal at the fore. A financial failure of SFG will detrimentally impact the entire

market, an outcome we are all trying to avoid. We look forward to working with you and your staff to

rebuild the financial health of SFG and to create a firmer foundation on which this market can thrive.

Sincerely,