California Insurance Commissioner Ricardo Lara said today he will grant State Farm’s request to raise home insurance premiums by 22% on average if the company agrees to certain conditions — and wins approval at a public rate hearing next month.

Lara’s conditions are that State Farm, the state’s biggest provider of homeowners insurance, commit to pause canceling and not renewing policies through the end of this year. He also is asking that its parent company, State Farm Mutual, give or loan the California entity, State Farm General, $500 million to help boost its finances. In addition, State Farm must prove its need for the interim rate increases at a hearing April 8, where it must present updated and more detailed data.

Lara said he had to “make an unprecedented decision in the short term.”

“I expect both State Farm and its parent company to meet their responsibilities and not shift the burden entirely onto their customers,” Lara wrote. “The facts will be revealed in an open, transparent hearing.”

Lara has been trying to reform the state’s insurance market as  providers like State Farm have canceled policies or paused writing new ones, saying they have been unable to charge premiums that match increased wildfire risks.

State Farm asked for “emergency” interim rate increases after fires burned through parts of Los Angeles County in January, saying it expects more than $7 billion in claims from the deadly blazes, a drastically reduced surplus and a potential cut to its credit rating, which could affect its ability to meet mortgage lenders’ insurance requirements. The company, which insures nearly 3 million property owners in the state, including more than 1 million homeowners, had been waiting for a decision on rate hikes it requested last summer, which the Insurance Department had not approved after months of discussions, so it sought special approval for interim rate increases.

Under California law, insurance companies that request rate increases of 7% or more must go through a rate hearing if there are objections by intervenors, as there are in the case of State Farm’s requests. Rate hearings are rare; the last one was in 2015 and also involved State Farm.

If State Farm is successful at proving its need for rate hikes at next month’s hearing, its interim rates will climb on June 1 an average 22% for homeowners, 15% for renters and condos, and 38% for rental dwellings. The company had asked for the rates to become effective May 1.

Those increases would follow an average 20% premium rate hike State Farm customers saw just last year.

State Farm would still have to go through a rate hearing for its summer rate requests. Department spokesperson Michael Soller said only that that hearing would occur later this year.

An administrative law judge will preside over the hearing for the interim rate request at the department’s Oakland office, and is expected to provide a proposed decision to the commissioner within 10 days, according to Lara’s order.

Lara’s decision came about two weeks after he called an in-person meeting between his department, State Farm executives and Consumer Watchdog, an advocacy group that filed a challenge against the insurer’s rate requests. The same parties also met virtually Tuesday, during which the commissioner previewed his decision.

State Farm General Chief Executive Dan Krause said at the meeting this week that State Farm General was willing to consider giving its California arm a capital infusion of at least $250 million if the interim rate requests were approved, according to the meeting transcript.

Representatives for State Farm and Consumer Watchdog did not immediately return a request for comment.

Levi Sumagaysay is a reporter with CalMatters.