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California's home insurer of last resort sees enrollment surge, raising concerns over its finances

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California's home insurer of last resort sees enrollment surge, raising concerns over its finances

With home insurers scaling back coverage in the state, enrollment is surging in California’s backstop insurance plan — as is the plan’s risk of sustaining losses that it can’t cover.

Victoria Roach, president of the FAIR Plan Assn., told lawmakers this week that property owners even in areas with low wildfire risk were finding it difficult to keep their homes insured as companies increased rates, limit coverage or left areas susceptible to natural disasters amid climate change.

That has prompted thousands of Californians to purchase coverage through the state insurer as a last resort. Funded by the insurers doing business in California, the Fair Access to Insurance Requirement plan provides a limited policy as a fallback for property owners unable to find conventional coverage they can afford.

Roach said the Fair Plan set a new record last month when it added 15,000 new policyholders.

The FAIR plan has about 375,000 policyholders, and the insurer’s total risk exposure was $311 billion as of December 2023; it was $50 billion in 2018.

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“We’re one of the largest writers in the state right now in terms of new business coming in,” Roach said. “As those numbers climb, our financial stability comes more into question.”

Roach said homeowners and businesses are typically insured by any of the state’s 118 standard insurers or 132 surplus line insurers, which specialize in high-risk insurance.

“Unfortunately, as you know with the current state of the market, I think this is often reversed because there’s not a lot of options out there for people,” Roach told lawmakers during Wednesday’s Assembly Insurance Committee. “Instead, the FAIR plan is quickly moving to be the first resort for a lot of people.”

She said consumers who would never have sought insurance through the FAIR plan in years past were now among the new policyholders, many of whom were not living in wildfire areas.

The insurer’s expansion is the latest wrinkle in California’s ongoing insurance crisis, and it mirrors a similar trend across the country of major companies dropping customers in areas prone to wildfires, flooding and hurricanes.

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Florida’s state insurance of last resort, known as the Citizens Property Insurance Corp., has become the largest property insurer there, adding about 11,000 new policies in the last two weeks, according to local reports.

In Louisiana, state officials have been trying to address an insurance crisis following a series of hurricanes in 2020 and 2021 that caused insurance companies to stop renewing policies or leave the state.

Since 2022, at least eight insurers, led by State Farm and Allstate, have announced plans to stop offering home insurance to new customers or withdraw from the state entirely. Some blamed a spike in the cost of reinsurance — insurance policies that insurance companies buy to cover their big losses — and financial strains caused by inflation that have made materials and labor for home repair and rebuilding costly.

The potential loss of insurers prompted Gov. Gavin Newsom to issue an executive order commanding the insurance commissioner to take action to address issues with the insurance market and expand coverage options for consumers.

Insurance Commissioner Ricardo Lara’s response to the crisis is a set of new rules still being implemented that would allow insurers to raise rates to cover reinsurance costs and projected losses from catastrophic fires, but also require them to provide coverage for more homes in the canyons and hills. The proposals, which aim to move people off the FAIR plan and slow the increase in premiums, have won support from insurance industry trade groups and some consumer groups, but criticism from other consumer advocates.

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Under the existing system, insurers need to apply to the Department of Insurance to raise their average rates across the state and prove that the price hike is justified. The process allows consumer advocates to intervene to contest the insurer’s claims.

This system was created when California voters approved Proposition 103 in 1988, but the insurance department went a couple of steps further than the ballot measure. Its rules barred insurance companies from including the cost of reinsurance in their rates and allowed the use only of historical loss data, rather than forward-looking simulations, to support a hike in premiums.

Insurance industry representatives have been trying to lift both of those restrictions for years, but their calls have intensified as insurers have pulled back coverage in California.

On Thursday, Lara proposed a regulation that would allow insurers to use catastrophe modeling that takes into account the projected impacts of climate change and other shifting factors when asking to raise rates.

“We can no longer look solely to the past as a guide to the future,” Lara said in a statement. “My strategy will help modernize our marketplace, restoring options for consumers while safeguarding the independent, transparent review of rate filings by Department of Insurance experts, which is a bedrock principle of California law.”

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The proposed regulation comes a week after the Los Angeles County Board of Supervisors approved a motion demanding that Lara investigate the compliance measures that insurance companies require from homeowners to keep their coverage.

“It’s no secret that insurance providers have become more conservative due to increased wildfire threats statewide,” said Supervisor Kathryn Barger, who introduced the motion, in a statement. “As a result, homeowners are increasingly being put in a very tough position: pay higher premiums and comply with varied, costly, and inconsistent mitigation requirements or lose your insurance.”

She added: “I’ve heard from many of my constituents district wide who are facing steep cost increases or being dropped altogether by their insurance carriers and left to fend for themselves. That’s simply unacceptable.”

In response to proposed expansion of catastrophe models, Consumer Watchdog, a consumer advocacy group that often intervenes in proposed rate hikes, said Lara’s proposed regulation limits transparency.

“Black box catastrophe models are notoriously contradictory and unreliable, which is why public review and transparency are key before insurance companies are allowed to use them to raise rates,” the group wrote in a statement. “Commissioner Lara’s proposed rule appears drafted to limit the information available to the public about the impact of models on rates in violation of Proposition 103.”

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The group contends that the rule fails to spell out how the Department of Insurance would assess a model’s bias or accuracy and instead creates “a pre-review process that appears primarily focused on determining what information companies must disclose and what they may conceal from public view.”

“California needs a public catastrophe model to ensure climate data is transparent and to prevent insurance price-gouging and bias.”

Staff writer Sam Dean contributed to this report.

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‘Avatar’ Suit Focuses on Hot Topic in A.I. Age: A Character’s Face

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‘Avatar’ Suit Focuses on Hot Topic in A.I. Age: A Character’s Face

An actress accused the director James Cameron of stealing her likeness to create an “Avatar” character in a lawsuit filed on Tuesday in California — a case that reflects a core fear among Hollywood performers in the artificial intelligence age: losing control of their own faces.

The actress, Q’orianka Kilcher, also sued Disney, which controls the multibillion-dollar “Avatar” franchise, which started in 2009.

“In the age of A.I., our likeness is no longer safe,” Ms. Kilcher, 36, said in an interview. “While what happened to me is personal, it’s also a big warning that, if we don’t act now, this type of thing will become standard. This case is about the future of identity.”

The lawsuit involves Neytiri, the digitally created, blue-skinned warrior princess in Mr. Cameron’s three “Avatar” blockbusters. According to the complaint, Mr. Cameron used a photo of Ms. Kilcher as a teenager — without her knowledge — as the foundation for Neytiri, incorporating her features “directly into his production art” and digital production pipeline.

“Neytiri’s lips, chin, jawline and overall mouth shape” in the trilogy “are Q’orianka Kilcher’s,” the complaint said. “This was not a fleeting inspiration or a vague homage; it was a literal transplant of a real teenager’s facial structure.”

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In 2010, Ms. Kilcher, who is also an Indigenous rights activist, met Mr. Cameron by chance at a charity event in Hollywood, where he told her that she was the “early inspiration” for Neytiri’s look, according to the complaint. “She did not take this to mean that her actual face had been replicated,” the complaint said.

Ms. Kilcher is suing now, the complaint said, because of an interview that Mr. Cameron gave to a French media outlet in 2024. In the interview, Mr. Cameron mentions Ms. Kilcher and “points to an image of Neytiri and says unambiguously: ‘This is actually her lower face,’” the complaint said. The interview came to her attention a year later.

“For the first time in a public forum, Cameron explicitly admitted the full truth about Neytiri’s design,” according to the complaint, which was filed in the U.S. District Court for the Central District of California in Los Angeles. “One of Hollywood’s most powerful filmmakers exploited a young Indigenous girl’s biometric identity and cultural heritage to create a record-breaking film franchise, without credit or compensation to her.”

A lawyer for Mr. Cameron did not respond to a request for comment. Disney had no immediate comment.

Ms. Kilcher’s action is the latest in a large number of legal attacks on “Avatar” over the years — almost all of them resolved by courts in Mr. Cameron’s favor, including five separate lawsuits accusing him of copyright infringement or the stealing of ideas. A sixth infringement lawsuit is ongoing and was expanded last month.

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In part, Ms. Kilcher is suing under California’s decades-old “right of publicity” statute, which allows people to bring claims against unauthorized use of their identities. It’s a complex area of the law that has taken on a new immediacy in the age of generative A.I., an emerging technology that allows anyone with an internet connection to easily create images that replicate existing art, photographs and human likenesses.

Generally speaking, right-of-publicity laws (about 25 states have one) balance First Amendment protections by distinguishing between commercial exploitation (using a likeness to sell a product) and expressive works (such as news, art, parody). But “there is not always a bright line,” said Jennifer E. Rothman, a professor at the University of Pennsylvania’s Carey Law School who is viewed as a leading authority on right-to-privacy law.

Ms. Kilcher’s break in Hollywood came in 2005 when, as a 14-year-old, she was cast as Pocahontas in Terrence Malick’s “The New World.” She has since acted in films like “Dog” and TV shows like “Yellowstone,” and is a member of the Academy of Motion Picture Arts and Sciences.

Ms. Kilcher is asking for damages that include “all profits” attributable to the unauthorized use, including from the sale of “Avatar” tickets; the three “Avatar” films have collected $1.8 billion at the North American box office alone.

“The damages we are asking for are commensurate with the exploitation,” Arnold P. Peter, one of Ms. Kilcher’s lawyers, said in an interview.

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Crypto exchange Coinbase to lay off 14% of staff as AI reshapes work

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Crypto exchange Coinbase to lay off 14% of staff as AI reshapes work

Cryptocurrency exchange Coinbase said it’s slashing roughly 14% of its workforce, or about 700 workers, partly because artificial intelligence is reshaping the way people work.

“The biggest risk now is not taking action. We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native,” Coinbase Chief Executive and co-founder Brian Armstrong said in a Tuesday email to employees.

The email, which was posted on social media, said engineers with the help of AI are completing work in days rather than weeks. As more tasks get automated, that’s made it possible for the company to lean on smaller teams.

The company also cited other factors contributing to the job losses, including the volatility of the cryptocurrency business.

Founded in San Francisco, Coinbase is the largest cryptocurrency exchange in the United States. Millions of people use its platform to buy, sell, transfer and store cryptocurrency such as Bitcoin.

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Coinbase is among tech companies that have been laying off workers and pointing to how AI is making workers more productive. Although some experts say the role AI has been playing is overblown, advancements in technology have also made it possible to generate code and automate other tasks. Companies are also spending more on artificial intelligence, some building new AI-powered gadgets or building out new data centers.

This year, companies such as Block, Meta, Oracle and more have announced they’re slashing thousands of workers. From January to March, tech companies have announced 52,050 layoffs, up 40% from the same period last year, according to outplacement and executive coaching firm Challenger, Gray & Christmas.

Coinbase is also changing how it operates, Armstrong told employees. It’s reducing management layers and some leaders will oversee 15 workers or more, his email said. Managers will operate like “player-coaches” and it’s experimenting with “one person teams” in which the role of an engineer, designer and product manager are part of one position.

“AI is bringing a profound shift in how companies operate, and we’re reshaping Coinbase to lead in this new era,” Armstrong told employees. “This is a new way of working, and we need to leverage AI across every facet of our jobs.”

Coinbase largely makes money from cryptocurrency transaction fees, but trading activity has slowed. In the fourth quarter of 2025, the company reported total revenue of roughly $1.8 billion, missing analysts’ expectations. The company posted a net loss of $667 million during that quarter, which it partly attributed to losses in certain strategic investments.

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As of December, Coinbase had more than 4,900 employees, according to its website. Although the company leased office space in San Francisco, it has allowed employees to work remotely and doesn’t have a physical headquarters.

Coinbase’s share price fell more than 2% on Tuesday to $197.75.

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U.S. Trade Deficit Grew in March

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U.S. Trade Deficit Grew in March

The U.S. trade deficit in goods and services rose to $60.3 billion in March, increasing 4.4 percent from the previous month, after the Supreme Court struck down President Trump’s global tariffs, according to data from the Commerce Department released on Tuesday.

Exports grew 2 percent in the month, to a record $320.9 billion, as the United States exported more oil, soybeans and industrial supplies. The U.S. trade surplus in petroleum hit a record in March, as war with Iran pushed up the price of oil and U.S. energy exports. Imports also gained 2.3 percent in March, to $381.2 billion. The combination increased the monthly trade deficit, the gap between what the United States imports and what it exports.

Tariffs resulted in up-and-down swings in the trade deficit last year. The monthly trade deficit is now somewhat lower than it was in 2024. But overall, the figure hit a record last year, as the United States continued to import high-priced computer chips and weight-loss drugs, and importers stockpiled foreign goods before tariffs took effect.

The data provided the first snapshot of trade since the Supreme Court ruling forced major changes to the Trump administration’s tariff regime.

On Feb. 20, the Supreme Court ruled that Mr. Trump had exceeded his authority last year when he used an emergency law to impose steep tariffs on nearly every nation.

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That ruling forced the administration to withdraw the double-digit tariffs it had issued under that law, which varied by country based on bilateral trade deficits. Mr. Trump immediately moved to replace those levies with a flat 10 percent tariff, issued under a legal authority known as Section 122.

The Section 122 tariff will expire in July unless Congress votes to reauthorize it. So the Trump administration has been working on tariffs to replace it. It has started two trade investigations under another legal provision known as Section 301, which allows the president to impose tariffs in response to unfair trade practices.

One of the new investigations would target countries that don’t have laws blocking imports made with forced labor. The other centers on what the administration calls “excess capacity” among 16 of the country’s largest trading partners.

The Trump administration says overproduction in the factory sectors of some foreign countries has resulted in large and persistent U.S. trade deficits with those nations. Representatives from various industries, ranging from sugar to technology to chemicals, are set to testify about the investigation on Tuesday and Wednesday in Washington this week.

Next week, Mr. Trump is expected to visit Beijing, for a meeting with the Chinese leader that will be partly focused on trade. U.S. imports from China have shrunk significantly, as the administration has imposed high tariffs on Chinese goods, and companies have relocated supply chains out of the country.

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