AB 1755 (Levine) Homeowners’ insurance: home hardening (Mandatory Insurance)

Assembly Bill 1755 would have mandated insurers to issue a homeowners’ insurance policy to any homeowner who has hardened their home against fire, regardless of the home’s location, on and after January 1, 2025. The California Department of Insurance (CDI), which has no expertise in fire mitigation science, would have been required to define home hardening for the required issuance of homeowners’ insurance policies.

Insurance carriers need to manage the risk of the policies they underwrite properly, so they are always able to make payments to people with policies, regardless of any possible eventuality. By eliminating underwriting flexibility, AB 1755 would have exposed insurers to an irresponsible level of risk concentration.

PIFC ACTION: After extensive outreach and discussions with members of the Legislature, AB 1755 was referred to the Assembly Insurance Committee, but ultimately never set for hearing.

AB 2323 (Levine) – Insurance: Covered Communications

Assembly Bill 2323 would prohibit a “covered communication,” between the insurance commissioner or a commissioner appointee, and an “interested party,” unless the covered communication is disclosed and made public with a report to be published on the department’s internet website. The bill would define “covered communication” for these purposes to mean any oral or written communication between the insurance commissioner or a commissioner appointee and an interested person about a matter within the commissioner’s jurisdiction that does not occur in a public hearing or other official proceeding, or on the official record of the proceeding on the matter. The bill would prohibit the insurance commissioner or a commissioner appointee from making, or using their official position to influence, a decision in which a covered communication has not been disclosed and would make a violation subject to a $7,500 civil fine and other costs.

PIFC ACTION: AB 2323 was an attempt to create a reporting requirement that would have done nothing to improve greater government transparency and instead, would have imposed another layer of complexity on CDI operations that would require the wasteful allocation of scarce staff time and public resources to duplicative compliance activity.

After extensive discussions with the Assembly Insurance Committee staff, this bill did not receive enough votes to make it out of its first hearing.

AB 1694 (Levine) Insurance: investment disclosures.

Assembly Bill 1694 would have required an admitted insurer, on or before January 1, 2024, and on or before each January 1 thereafter, to disclose its investments in fossil fuel-related entities and the fossil fuel companies and projects it underwrites or otherwise insures. The bill would have required the Department of Insurance to publish that information on its website on or before April 1, 2024, and on or before each April 1 thereafter.

PIFC ACTION: AB 1694 overlaps current reporting requirements, creating new unworkable reporting requirements, and would only serve to drive up the cost of insurance or restrict access for California consumers. PIFC opposed the bill.

PIFC worked with a coalition of insurance trade associations to oppose this bill. Due to these efforts, this bill was never set for hearing.

SB 1021 (Bradford) Vehicles: driving under the influence of alcohol or drugs

Senate Bill 1021 would allow courts to grant a pretrial diversion to motor vehicle operators found guilty of driving under the influence (DUI) of alcohol or drugs. These diversion programs would mask demerit points on motor vehicle records upon completion of a 12- month program for first time offenders and limit the ability of insurers to utilize this information in their underwriting and rating. Additionally, because there is no tracking of first-time offenders without the points, there is nothing to stop offenders from repeatedly using the diversion program to avoid having a point added to their record.

PIFC ACTION:  PIFC raised concerns about this bill to the author and committee staff. SB 1021 was pulled from the Assembly Public Safety Committee because of major policy issues, and it did not go through the proper committees in the Senate before it moved over to the Assembly.  SB 1021 will not be moving forward this year.

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