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State regulators will fast-track reviews of rate hikes sought by home insurers amid wildfire losses

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State regulators will fast-track reviews of rate hikes sought by home insurers amid wildfire losses

The state insurance commissioner took action Friday to speed up reviews of rate hikes sought by home insurers after efforts to address the issue through fast-track legislation got bogged down amid opposition from a consumer group.

California Insurance Commissioner Ricardo Lara issued a bulletin outlining steps his department would take to more quickly reach a decision on whether to decline, approve or amend applications from insurers, who have pulled back from the state’s market amid wildfire losses.

It now takes on average about seven months for insurers to get decisions on their rate applications — an untenable pace as insurers such as State Farm, Farmers and others have either declined to renew some policies or stopped writing new ones.

“Consumers are hurting, businesses continue to lose coverage, wildfires are ravaging our state — and we do not have the luxury of time,” Lara said in a written statement accompanying his announcement.

The bulletin is an element of the commissioner’s Sustainable Insurance Strategy, a package of wide-ranging reforms intended to stabilize the home insurance market.

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In May, Gov. Gavin Newsom said that he was proposing a so-called “trailer bill” to be adopted as part of the state budget in July that would require regulators to complete their review of insurers’ rate applications within 60 days, though the language also allowed for extensions.

However, the bill was not introduced amid opposition from Consumer Watchdog, the L.A. consumer group that was key to passage in 1988 of Proposition 103, the landmark insurance reform initiative that provided for an elected insurance commissioner with authority to deny insurer rate hikes. The group worried the proposal would weaken consumers’ voice in the review process.

The bulletin issued Friday calls for the department to review a complete rate application within 60 days, and if more time is needed to make a decision, regulators must outline their position on what remains unresolved. It also allows for two more 30-day extensions, after which the department would issue an “estimated” rate the company could accept or reject. If it is rejected, the process would continue with 30-day extensions.

Home insurers who seek rate hikes in excess of 7% cannot implement the estimated rate without the consent of intervenors, such as consumer groups, if they have been granted the right to take part in the review process and have petitioned for a hearing on the application. The bulletin also applies to other types of property and casualty insurance.

That language is similar to, though less detailed than, what the governor proposed in May. As a bulletin, it serves to “clear the air” about the department’s obligations and does not constitute a new regulation, said Michael Soller, Lara’s deputy commissioner of communications.

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Jamie Court, president of Consumer Watchdog, said the group remains concerned about the effort to speed regulatory reviews. He noted that under Proposition 103, consumer groups have only 45 days to file an application to intervene in the review process, with the commissioner given 15 days to approve their request — a 60-day process in itself.

“We don’t know all the unresolved issues until we have a back and forth with the company. This clearly short circuits the role of the public intervenor in the process and diminishes the voice of the public participant,” he said.

The group had sought to amend the governor’s proposal to clearly lay out the role of consumer groups in the process, he said, including by adding a provision that would not start the clock on the 60-day rate review until after the commissioner approves an intervention by a third party, if one was sought. He said Consumer Watchdog was making progress with its concerns in the Legislature when Lara decided to proceed with the bulletin.

Newsom declared his support of Lara’s action, calling it “necessary to address California’s insurance crisis,” in a statement included in the department’s announcement.

Currently, it has been the department’s practice to seek automatic waivers from insurers when it runs up against the 60-day rate review deadline already written into law by Proposition 103. Regulators then seek additional 30-day waivers as needed. It is this practice that the department and insurers have cited as a cause of the lengthy rate reviews.

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Rex Frazier, president of the Personal Insurance Federation of California, a trade group of property and casualty insurers, said the bulletin appeared to be consistent with a larger overall agreement the department reached with the industry last year to make the market more attractive to insurers.

However, he said it remains to be seen how the changes are implemented, including the new requirement that regulators offer an “estimated” rate within 120 days of the initial rate filing.
“They can low ball that. It’s not like the department ever would be compelled to put anything in an estimated rate that they’re not comfortable with,” he said.

Court expressed the opposite concern, saying that the estimated rate could result in insurer rate giveaways. He said he expected the department would have to issue additional guidance on the meaning of an estimated rate.

Consumer Watchdog will closely watch how the bulletin is implemented on a case-by-case basis and would consider litigation if it decides the department is violating the language of Proposition 103, he said.

The department is developing what it calls a “data reconciliation tool” before it implements the rules — software that will prevent insurers from filing incomplete rate applications, which slow the review process by forcing regulators to seek additional information. The software is not expected to be ready until next year, Soller said.

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Also Friday, Lara issued another bulletin barring insurance companies from canceling or not renewing policies for some 185,000 policyholders affected by the Park, Borel and Gold Complex fires.

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U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders

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U.S. Space Force awards .6 billion in contracts to South Bay satellite builders

The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.

The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.

Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.

The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.

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The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.

Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.

“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.

The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.

Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.

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Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.

Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.

Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.

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California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

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California-based company recalls thousands of cases of salad dressing over ‘foreign objects’

A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”

The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.

Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.

None of the 42 locations where the product was sold were in California.

Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.

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“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”

The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.

The company recalled the following types of salad dressing:

  • Creamy Poblano Avocado Ranch Dressing and Dip
  • Ventura Caesar Dressing
  • Pepper Mill Regal Caesar Dressing
  • Pepper Mill Creamy Caesar Dressing
  • Caesar Dressing served at Costco Service Deli
  • Caesar Dressing served at Costco Food Court
  • Hidden Valley, Buttermilk Ranch
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They graduated from Stanford. Due to AI, they can’t find a job

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They graduated from Stanford. Due to AI, they can’t find a job

A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.

The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.

When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.

Top tech companies just don’t need as many fresh graduates.

“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”

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While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.

Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.

“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”

The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.

Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.

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“The industry for programmers is getting very oversaturated,” Akgul said.

The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.

Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.

It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.

In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.

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Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.

Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.

A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.

“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”

To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.

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Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.

Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.

Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.

As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.

“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”

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After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.

Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.

“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”

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