2021 Legislative Activity

Below is a list of bills that PIFC tracked throughout 2021. Most of the bills were either signed and chaptered or set aside for next year, known as 2-year bills.  Many of the bills set for 2-year status will not advance in 2022, however, there are exceptions, and an author may purposely put their bill on hold to gain more knowledge on a subject or to give stakeholders more time to provide feedback. Your PIFC team worked diligently to limit the scope of these bills and their impact on your businesses. Most lawmakers are willing to work with our Legislative Advocates and we credit the authors of these bills and their staff for taking the time to meet with our team and address the concerns of the insurance industry.

PIFC staff was able to stop a bill that would have mandated a tax on every home and auto policy to cover potential claims from a large earthquake. We successfully negotiated amendments to bills that sought to make insurers pseudo regulators. We stopped two new climate disclosure bills from advancing this year, avoiding costly reporting requirements, as insurers already have a robust climate reporting mechanism with the Insurance Commissioner. And PIFC staff and the entire insurance industry moved quickly to stop a harmful bill that was a repeat of last year’s AB 1552 which would have mandated that insurers provide retroactive coverage for business interruption policies that weren’t designed or funded to cover a society-wide pandemic.

September 10, 2021 was the last day for bills to be passed out of the Legislature and sent to Governor Newsom for signature. Compared to the 2019 legislative session, more bills failed this year early in the legislative process. However, the bills that made it further along in the legislative process failed at a lower rate. The Legislature is now on interim recess and will reconvene on January 3, 2022.

October 10, 2021 was the last day for the governor to sign or veto bills. Due to limited committee space from COVID-19 protocols, there was a loose requirement for each member to only carry 12 bills out of Appropriations Committees. Because of this, only 694 measures made it to the governor’s desk. A normal year would have around 1,400 bills sent to the governor for signature.


Bills Held in Committee

SB 440 (Dodd) Earthquake and wildfire loss mitigation. This bill would require the Wildfire Fund Administrator, the Office of Emergency Services, and the Office of Energy Infrastructure Safety to create the California Wildfire Residential Loss Mitigation Program as a joint powers authority. The bill would require that program to provide mitigation against wildfire risk, including a grant program to assist qualifying owners to retrofit their structures to protect against wildfire or to create a defensible space around their structures. The bill would establish the Wildfire Loss Mitigation Fund as a continuously appropriated subaccount in the Wildfire Fund to fund the program.

PIFC ACTION: While we strongly agreed with the goal of SB 440, to reduce risk and loss by increasing wildfire resiliency, we disagreed with the source of revenue expected to fund this important purpose. The bill would have imposed a tax on policyholders by requiring all property and liability insurance policyholders in California to be assessed (up to 2% of the policy premium, for ten years) if the California Earthquake Authority (CEA) runs out of other money. SB 440 was held in Senate Insurance Committee.

AB 1439 (Levine) Property insurance discounts. AB 1439 would have required a residential or commercial property insurance policy issued, amended, or renewed on or after January 1, 2022, to include a discount if a local government of the jurisdiction where the insured property is located funds a local wildfire protection or mitigation program. Because the bill would mandate discounts for specified property insurance policies, thus affecting the commissioner’s consideration of a rate, the bill would amend Proposition 103.

PIFC ACTION: PIFC opposed AB 1439 because the bill would impose immense risks that threaten the ability of homeowner’s insurers to continue to function in California. After discussions with the author’s staff and committee members, PIFC is pleased to report that AB 1439 was pulled from the Assembly Insurance Committee and did not advance.

AB 743 (Ramos) – Insurance: business interruption: coverage for COVID-19. This bill, with respect to a policy of insurance that provides coverage for business interruption, would create specified rebuttable presumptions affecting the burden of proof in a case in which the insured alleges that the business interruption was due to the COVID-19 pandemic and occurred during the period of the state of emergency declared by the Governor due to the COVID-19 pandemic.

PIFC ACTION: PIFC opposed AB 743 because it threatened the ability of homeowner’s insurers to continue to function in California. This bill was never set for hearing.

SB 289 (Newman) – Recycling: batteries and battery-embedded products. SB 289 repeals current practices for battery recycling and creates new practices. PIFC identified the definition of “producers” of electronic waste in the bill would inadvertently obligate insurers who offered safety devices to consumers like water detection monitors to participate in a product stewardship program.

PIFC ACTION: PIFC worked with the author of this bill to negotiate an amendment to exempt insurers; however, the bill died in Senate Appropriation Committee prior to this amendment being made.

Bills Not Advancing This Year

 AB 1498 (Low) Insurance: notice of policy cancellation, lapse, or termination. AB 1498 would require insurers to notify policy holders or any other person designated by the named insured, by certified mail, of notice of cancellation for nonpayment of premiums.

PIFC ACTION: PIFC primarily opposes this legislation because we believe policyholders’ needs are already being met by statute. Currently, insurers providing personal property insurance are required to provide notices of cancellation for non-payment 10 days prior to cancellation. These statutorily required notices can be sent electronically if a customer opts-in, otherwise the notice is sent by ground mail. The additional cost of certified mail will add up to millions of dollars in administrative costs for the insurance industry. This bill has been set as a 2-year bill.

 SB 260 (Weiner) – Climate Accountability Act. This bill seeks to require substantial data reporting of greenhouse gas (GHG) emissions, either directly or indirectly, of all companies who wish to do business in California.

PIFC ACTION: PIFC opposed SB 260 because it would have placed a huge burden on small and medium businesses in California, by requiring them to report emissions associated with a company’s entire supply chain. This reporting requirement will necessarily require that large businesses stop doing business with small and medium businesses that cannot meet the onerous reporting requirements required by the bill, leaving these companies without the contracts that enable them to grow and employ more workers. After extensive discussions with the author’s office and numerous revisions, the bill still needs a substantial amount of work. SB 260 has been placed on 2-Year status.

SB 449 (Stern) – Climate-related financial risk. SB 449 would require a covered entity to submit an annual climate-related financial risk report to the Secretary of State (SOS) and empower the Governor’s newly created (announced on April 5th, 2021) Climate-Related Risk Disclosure Advisory Group to propose regulatory actions, policies, or reforms in the area of climate-related financial risks.

PIFC ACTION: Since 2010, insurers have worked with the California Department of Insurance (CDI) and the National Association of Insurance Commissioners (NAIC) to submit an annual report on how insurers, across all lines of insurance, assess and manage risks related to climate change. By introducing a new and different report, administered by a different regulator (SOS), SB 449 would upend over a decade of work and circumvent the successful NAIC approach to insurance industry climate reporting. PIFC worked with the author’s office to exempt insurers from this duplicative reporting, however, amendments did not address our concerns and PIFC took an oppose unless amend position on this bill. SB 449 is currently set as a 2-year bill.

AB 1522 (Levine) Property insurance.

AB 1522 would prohibit an insurer from canceling or refusing to renew a policy of residential property insurance or commercial insurance based solely on the fact that the insured property is located in a high-risk wildfire area.

PIFC ACTION: After extensive talks with the author and committee staff, AB 1522 was set as a 2-year bill.

Amended Bills

SB 332 (Dodd) Civil liability: prescribed burning operations: gross negligence. This bill would provide that no person shall be liable for any fire suppression or other costs otherwise recoverable for a prescribed burn if specified conditions are met. The bill would provide that any person whose conduct constitutes gross negligence shall not be entitled to immunity from fire suppression or other costs otherwise recoverable.

PIFC ACTION: PIFC originally opposed SB 332 due the potentially harmful change to existing law that would allow entities engaging in prescribed burns to operate under a “gross negligence” standard. Gross negligence includes a more severe lack of care than ordinary negligence, but not that of blatantly disregarding the law. PIFC was able to work with the author’s office to negotiate amendments for SB 332. The bill  provides that, under specific conditions, no person is liable for any fire suppression, rescue or emergency medical services, fire investigation, and other related costs. The bill also provides that the grant of immunity from fire suppression or other costs do not apply to any person whose conduct constitutes gross negligence, and it does not affect the ability of a private or public entity plaintiff to bring a civil action against any defendant. With the author’s amendments included in the bill, PIFC changed its position from oppose to support. This bill was approved by the governor and chaptered.

AB 506 (Gonzalez, Lorena) Youth service organizations: mandated reporters.

Assembly Bill 506 would require insurance companies to terminate liability coverage for youth organizations who do not implement specified child abuse prevention measures. AB 506 would also require specified volunteers of youth organizations to be mandated reporters.

PIFC ACTION: Insurance companies are not equipped to play the role of regulators and PIFC was able to negotiate amendments with the author’s office that strike the onerous “regulator” requirements and instead would simply authorize an insurer to request information demonstrating compliance with certain provisions from a youth service organization before writing liability insurance for a youth service organization. PIFC no longer opposes this bill and it was signed by the governor and chaptered.

AB 1158 (Petrie-Norris) Alcoholism or drug abuse recovery or treatment facilities: recovery residence: insurance coverage.

AB 1158 will require a recovery residence that contracts with a government entity or substance abuse recovery or treatment facility that is licensed by the government to maintain minimum insurance coverage levels.

PIFC ACTION: Similar to AB 506, this bill would have insurers playing the role of regulator. PIFC negotiated amendments with the author’s office to drop the reporting requirements. PIFC no longer opposes this bill. This bill was approved by the governor and chaptered.

Supported Bills

AB 9 (Wood)Fire safety: wildfires: fire adapted communities.

PIFC supports AB 9, a bill that seeks to codify the Regional Forest and Fire Capacity (RFFC) program, which creates a new regional approach to collaboratively planned strategies for wildfire risk reduction project development. AB 9 was approved by the governor and chaptered.

AB 642 (Friedman)Wildfires

This bill would expand the number of new homes that comply with fire safety building standards, which will reduce the number of homes lost in wildfires. This bill will also require CAL FIRE to make recommendations on how Californians can better understand their wildfire risk and what actions they can take to reduce that risk. AB 642 was approved by the governor and chaptered.

AB 926 (Mathis) – Fire Prevention: local assistance

  • 2 Year

AB 981 (Frazier) – Forestry: CA Fire Safe Council

  • 2 Year

AB 1500 (Garcia, E.) – Safe Drinking Water, Wildfire Prevention, Drought Preparation, Flood Protection, Extreme Heat Mitigation, and Workforce Development Bond Act of 2022.

  • 2 Year

SB 11 (Rubio) – The California FAIR Plan Association: basic property insurance: exclusions. 

Unlike homeowners and many business property owners, California’s commercial farms and
ranches do not have access to basic property insurance provided by the California FAIR Plan.
Senate Bill 11 corrects this problem by clarifying existing California insurance law to ensure that agricultural infrastructure and buildings are eligible for basic property insurance via
the California FAIR Plan.
SB 11 was approved by the governor and chaptered.

SB 63 (Stern) Fire prevention: vegetation management: public education: grants: defensible space: fire hazard severity zones.

SB 63 will require Cal Fire to identify moderate and high severity fire zones. The Building Standards Commission will then use these zones to identify modified ignition-resistant building standards for the new zones. SB 63 will create a fire resiliency corps and provide grants to help people better protect their homes against wildfires. The community fire resiliency corps organizations will be eligible for fire prevention grants to assist with defensible space assessments for homeowners in their communities.

The bill also mobilizes more people in the effort to bring down California’s wildfire risk by empowering local organizations to train volunteers in fire prevention efforts. SB 63 was approved by the governor and chaptered.

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