California E&S Insurance

Point #5 is: * Something like hurricane, earthquake, or giant wildfire creates correlated risk where a huge number of policies can payoff at once. * Insurance companies can protect themselves (both their shareholders and ability to pay policy holders) from that correlated risk by [reinsuring](https://en.wikipedia.org/wiki/Reinsurance) themselves in global markets either by tapping reinsurers (like General Re) or issuing catastrophe bonds. * With a well functioning reinsurance market, a CA insurer in theory could keep issuing more and more CA policies with correlated risk as long as the insurer properly reinsured itself. On the other hand, if the reinsurance market isn't offering acceptable rates to an insurance company, the company may try to manage its risk exposure by limiting the number of policies it renews or takes on in an area.

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