SACRAMENTO, Calif. (AP) — California’s top insurance regulator on Friday said he would approve an emergency request by State Farm to raise premiums 22% on home insurance for about a million customers if the insurance giant could justify the hike at a public hearing.

State Farm, the state’s largest insurer with roughly 1 million home insurance policies in California, said the emergency rate would help the company rebuild its capital following the Los Angeles wildfires that destroyed more than 16,000 buildings, mostly homes. The company is trying to prevent a “dire” financial situation that executives said could push homeowners into the state’s last-resort insurance option.

California Insurance Commissioner Ricardo Lara said that other California insurers won’t be able to absorb State Farm’s customers if the insurance giant stops doing business in California, but that he wanted more data on how the company manages its finances and calculates risks. He asked the company to present its argument publicly on April 8 to a judge, who will then give a proposed decision. Lara will then make a final decision within 10 days.

“State Farm claims it is committed to its California customers and aims to restore financial stability. I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers,” Lara said in a statement. “The facts will be revealed in an open, transparent hearing.”

Lara also called on the company to request a $500 million capital infusion from its parent company to help stabilize its finances in a private meeting this week, according to transcript of the meeting.

State Farm didn’t immediately respond to a request for comment.

Consumer Watchdog, a consumer advocacy group that opposed State Farm’s request, said the 22% increase could equate to an additional $600 annually for homeowners. The group previously said it would challenge the approval if Lara goes through with it.

The emergency rates include a 22% rate increase for homeowners, 38% for rental owners and 15% for tenants. They will go into effect in June if Lara ultimately approves it. The decision comes as California is undergoing a yearslong effort to entice insurers to continue doing business in the state as wildfires increasingly destroy entire neighborhoods. In 2023, several major companies, including State Farm, stopped issuing residential policies due to high fire risk. Lara last year unveiled a slate of regulations all aiming at giving insurers more latitude to raise premiums in exchange for more policies in high-risk areas. Those rules kick in this year.