Bill Status Report-End of Session 2023

AB 478 (Connolly) Wildfires: insurance: This bill would prohibit non-renewals for homeowners over the age of 65 in high fire and very high fire severity zones. It would also prohibit an increase on the annual premiums of homeowners over the age of 65 in those areas by more than 25% and limits their premium increases to once in a five-year period. This bill violates the core principles of Proposition 103, which states “No rate shall be approved or remain in effect which is excessive, inadequate, unfairly discriminatory”, and would establish a new form of “redlining” by unfairly discriminating against all Californians under 65 and causing insurers to nonrenew younger CaliforniansAs a result, it became an industry focus to stop prior to the first policy hearing.

Position: Oppose

Status: After extensive conversations with committee members who shared our concerns about this bill, AB 478 did move but may be taken up in the coming year.

AB 703 (Hart) Residential property insurance: dog breeds: This bill is sponsored by the ASPCA, and mirrors Nevada’s SB 103, which was signed into law last fall. The language incorporates the NCOIL model of “first bite free” but adds an additional prohibition on insurers from inquiring about the breed of the dog for any purpose. AB 703 removes the ability of insurance companies to inquire and rely on dog breed as a factor in determining homeowners and renter’s insurance or to inquire as to the breed of a dog for any purpose. Therefore, insurers will not be able to properly underwrite and rate risks and the measure will negatively impact the ability of insurers to rate in a fair and actuarial sound way.

Position: Oppose

Status: PIFC began early conversations with the author’s office and the Assembly Insurance Committee, raising major concerns with the bill. This bill may be taken up in the coming year.

AB 741 (Jones-Sawyer) The California FAIR Plan Association: cannabis: This bill would prohibit the FAIR Plan from denying or canceling coverage because the policyholder has, or previously had, a legal amount of marijuana. The protection extends to commercial marijuana license holders under Division 10 of the Business and Professions Code. By mandating new coverage for cannabis businesses, AB 741 would further exacerbate the FAIR Plan’s risk exposures and increases the possibility of an assessment that will worsen the current challenges in both the homeowners’ and commercial insurance markets.

Position: Oppose

Status:  After extensive discussions with the author and committee members, this bill did not move but may be taken up in the coming year.

AB 788 (Petrie-Norris) Fire prevention: grant programs: reporting: Requires the Wildfire and Forest Resilience Task Force to compile and post on its internet website vital information about state and federal grant programs relating to fire prevention. As a result, state policymakers, local communities, and other stakeholders will have comprehensive data and information to guide investments into wildfire and forest resilience programs.

Position: Support

Status: AB 788 stalled in the Senate Appropriations Committee, which cited the fiscal impact of about $2.1 million in the first year and $1.6 million annually thereafter (General Fund and Greenhouse Gas Reduction Fund [GGRF]) to implement the provisions of this bill.

AB 970 (Rivas, Luz) Insurance: Climate and Sustainability Insurance and Risk Reduction Program: This bill would establish six climate insurance pilot projects to reduce physical risks from flooding and extreme heat and to reduce the protection gap in communities with high risks and low insurance uptake. The local jurisdictions would be required to develop pilot projects in consultation with CDI to achieve particular objectives, including prioritizing pre-disaster mitigation activities. It also requires CDI to establish a competitive grant program to support the design and funding of scalable projects that address climate risks and expand insurance options.

Position: Support

Status: AB 970 was vetoed by the governor, who in his veto message stated that the bill, “creates a significant state reimbursable mandate and new cost pressures in the millions of dollars that should be considered in the annual budget process.”

AB 1263 (Berman) Vehicles: Bureau of Automotive Repair: smog check program: This bill extends the sunset date for the Bureau of Automotive Repair (Bureau) until January 1, 2028, and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process. This bill would authorize the Bureau to develop regulations to clarify its authority to regulate storage fees charged by automotive repair dealers.

Position: Support

Status: AB 1263 was signed by the governor.

SB 8 (Blakespear) Gun Insurance: This bill incorporates most of SB 505 (Skinner, 2022), but no longer has strict liability language, and will allow coverage to be carried through a gun line or through a homeowner’s or renter’s line of coverage. It additionally expands the requirements that were outlined in SB 505 to mandate that coverage extend to all household members. This is a major deviation from current insurance policy practices which exclude household members from liability coverage due to moral hazard.

Position: Oppose

Status: PIFC has been working to bring the bill into as functional a form as possible or stopping the bill in its entirety. The Senate Insurance Committee shares the industry’s concerns with the bill. This bill may be taken up in the coming year.

SB 505 (Rubio) Property insurance: The California Fair Access to Insurance Requirements (FAIR) Plan serves as a temporary source of coverage for those who cannot obtain insurance from the traditional market. The FAIR Plan currently operates a clearinghouse whereby traditional insurers are provided information about FAIR Plan policies for the purpose of matching insurers with available homeowners’ insurance coverage to FAIR Plan policyholders. The goal of this clearinghouse mechanism is to foster competition in the private market that could result in less concentration or risks in the FAIR Plan portfolio and to “depopulate” the FAIR Plan. SB 505 expands the current clearinghouse program to include commercial property policies in addition to homeowners’ insurance policies. PIFC supported development of the original clearinghouse program and believes expanding the purpose and goals to apply similarly to commercial insurance policies is an appropriate step to address the growth in FAIR Plan commercial policies and related concentration risks that contribute to FAIR Plan financial challenges.

Position: Support

Status: SB 505 was signed by the governor.

SB 672 (McGuire) Residential property insurance: This bill would prohibit an admitted insurer that offers residential property insurance from refusing to offer or sell residential property insurance to an applicant whose property meets specified best practices for wildfire building hardening and property-level mitigation.

Position: Oppose

Status: This bill did not move but may be taken up in the coming year.

SB 793 (Glazer) FAST Act: Updates the privacy policy notices that insurers are required to send. It incorporates the principles of the 2015 FAST Act amendment to the Graham-Leach-Bliley Act. The bill ensures that notices are understandable and meaningful to consumers, while not overly burdening insurers.

Position: Support

Status: After extensive negotiations, PIFC was able to compromise with CDI, which would still maintain an optional structure, allowing insurers to either send the full GLBA notice annually or to send this abbreviated notice in its place. This bill was signed by the governor and expected to be implemented on January 1, 2024.

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