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 Californians. As 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 with this bill, AB 478 will not be moving forward this 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. We recently received word from the author’s office that this bill will be made into a 2-year bill, and is not moving forward this year.
SB 8 (Blakespear) Gun Insurance
This is a high priority concern to the industry. 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 worked closely with the Senator’s office and the Senate Insurance Committee to attempt to find a way forward for this bill. Unfortunately, we were unable to find common ground prior to the policy hearing deadline. The bill was held in the Senate Insurance Committee and will not be moving forward this year to allow more time for negotiations. The author of the bill has expressed her intent to bring it forward again next year. PIFC looks forward to the continued conversations about ways to make the bill functional.
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 will not be moving forward this year.
SB 793 (Glazer) FAST Act
This is top priority this year for PIFC. Similar to our sponsored bill last year, AB 2372 (Calderon), this bill 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. We remain very happy to support the effort to ensure 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. Without CDI opposition we expect this bill to pass.
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 passed out of its first policy hearing and is now in Senate Appropriations.
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 passed out of its first policy committee and is now in Senate Appropriations.
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 passed out of its first policy committee and is now in Assembly Appropriations.
