Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the departments powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.

This bill would require the department, on or before January 1, 2030, and every 5 years thereafter, to consider whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. As part of this consideration, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the departments powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.

This bill would require the department, on or before December 31, 2027, January 1, 2030, and every 3 5 years thereafter, to evaluate consider whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. For its first evaluation, As part of this consideration, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the departments powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.

This bill would require the department, on or before January 1, 2026, December 31, 2027, and every 3 years thereafter, to evaluate whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. For its first evaluation, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the departments powers and duties. Existing department regulations set forth requirements and limitations for a rating plan that segments, creates a rate differential, or surcharges the premium based on a policyholders or applicants wildfire risk. prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.

This bill would require the department to require an admitted residential property insurer to use a rating plan that reflects, and the rate offered to an applicant or insured to be based in part on, the reduced wildfire risk resulting from the installation or use of a noncombustible construction material, as specified. Because the bill would affect the commissioners discretion with rate applications, the bill would amend Proposition 103. department, on or before January 1, 2026, and every 3 years thereafter, to evaluate whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. For its first evaluation, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the commissioners powers and duties. Existing law generally regulates classes of insurance, including residential property insurance. As it relates to wildfire risk, existing regulations of the department require an insurers rating plan to take into account certain wildfire mitigation efforts, including specified building hardening measures and clearing of vegetation.

This bill would state the intent of the Legislature to enact legislation requiring insurers offering residential property insurance in the state to provide discounted insurance rates to homeowners who use or install in their homes building materials that are demonstrated to harden homes and reduce wildfire risk.

 THIRD READING  

Bill No: AB 2416

Author: Connolly (D)

Amended: 8/23/24 in Senate

Vote: 21

SENATE INSURANCE COMMITTEE: 6-0, 6/26/24

AYES: Rubio, Alvarado-Gil, Caballero, Cortese, Dodd, Ochoa Bogh

NO VOTE RECORDED: Niello

ASSEMBLY FLOOR: 51-14, 5/22/24 - See last page for vote

SUBJECT: Residential property insurance: wildfire risk

SOURCE: Author

DIGEST:

This bill requires the department, on or before January 1, 2030, and every five years thereafter, to  consider whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs As part of this consideration, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

Senate Floor Amendments of 8/23/24 delete the specific examples of building materials from the intent language of the bill.

ANALYSIS:

Existing law:

1. Regulates, generally, the classes of insurance including property and fire insurance.
2. Creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the department’s powers and duties.
3. Prohibits, under existing department regulations, an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.
4. Provides for the regulation of insurers, agents, and brokers, and other insurance-like organizations by the Insurance Commissioner (Commissioner), and imposes a broad range of financial solvency, licensing, and market behavior requirements, as set forth in the Insurance Code.
5. Establishes the “Safer from Wildfires” Framework.
6. Requires the State Fire Marshal (SFM) to biennially prepare and publish listings of construction materials and equipment and methods of construction and of installation of equipment, together with the name of any person, firm, corporation, association, or similar organization designated as the manufacturer, representative, or supplier, which are in conformity with building standards relating to fire and panic safety adopted and published in the State Building Standards Code.

This bill requires the California Department of Insurance (CDI), on or before January 1, 2030, and every five years thereafter, to evaluate CDI’s Safer from Wildfires framework to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. Specifically, this bill:

1. Requires CDI, as part of its first evaluation, to evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of construction materials included by the Office of the SFM on the Building Materials Listing (BML).
2. Allows CDI, in its first evaluation, to evaluate whether to include the installation of additional construction materials included by the Office of the SFM on the BML.
3. Requires CDI as part of its evaluation to do both of the following: a) Consult with the California Office of Emergency Services (Cal OES), the California Department of Forestry and Fire Protection (CAL FIRE), the California Public Utilities Commission (CPUC), and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation. b) Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires regulations.
4. Requires CDI to develop and implement a process that allows public participation that includes, at a minimum, all of the following:
   1. Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for CDI to consider as part of its evaluation;
   2. Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by CDI for inclusion in the Safer from Wildfires regulations;
   3. Making available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs CDI proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations; and
   4. Requires, if CDI makes public, a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures to initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
5. Defines “building materials listing,” “noncombustible,” “and “Safer from Wildfires regulations.”
6. Makes finding and declarations.

Background

As the Legislature, Governor, and the Department of Insurance work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. As new and safer building materials come to market and wildfire prevention methods evolve, it is important that we periodically revisit the regulations and evaluate if they capture the best mitigation practices available and if the regulations are offering as much relief as possible to the people who are doing the right thing. This bill represents a reasonable step the Legislature can take to help consumers save money on their insurance bills and reduce the risk of disaster for vulnerable communities and the families that live there.

Comments

California Safer from Wildfires California Safer from Wildfires is a comprehensive, multi-agency initiative established to enhance wildfire safety and preparedness. In October 2019, Insurance Commissioner Ricardo Lara convened a virtual investigatory hearing to initiate a series of regulatory actions aimed at protecting residents from the increasing risk of wildfires. Three years later, in October 2022, Commissioner Lara unveiled the Safer From Wildfire regulations as the first in the nation requiring insurance companies to provide discounts to consumers. The regulation is now state law and enshrined in the California Code of Regulations. The regulations involve collaboration among several state agencies, including CAL FIRE, CPUC, Cal OES, and CDI. These regulations have only been in effect for less than two years, so they are still in their infancy stages. The primary objectives of the Safer from Wildfires initiative include:

a) Reducing Wildfire Risk: Implementing measures to reduce the risk of wildfires through vegetation management, controlled burns, and other fuel reduction strategies.

b) Infrastructure Hardening: Enhancing the resilience of critical infrastructure, such as power lines and communication systems, to prevent them from igniting wildfires or being damaged by them.

c) Improving Emergency Response: Strengthening the state's emergency response capabilities to ensure rapid and effective action during wildfire incidents. This includes better coordination among agencies, improved communication systems, and increased resources for firefighting efforts.

d) Community Preparedness: Educating and preparing communities to respond to wildfires. This involves public awareness campaigns, evacuation planning, and encouraging the creation of defensible space around homes and properties.

e) Insurance and Financial Protections: Ensuring that homeowners and communities have access to adequate insurance coverage and financial resources to recover from the impacts of wildfire.

f) Regulations and Policies: Developing and enforcing regulations and policies that support wildfire risk reduction and safety measures, including building codes, land-use planning, and utility regulations.

The initiative developed 10 steps consumers can take to make their homes safer from wildfires:

• 1. Class-A fire rated roof – Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets. Wood shake shingles are not Class A fire-resistant rated.
  2. Five foot ember resistant zone, including fencing – Removing greenery and replacing wood chips with stone or decomposed granite five feet around your home prevents fire from getting a foot in the door. Replacing wood fencing connecting to your home with metal is critical because it can act like a candle wick leading fire straight to your home.
  3. Ember- and fire-resistant vents – Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.
  4. Non-combustible six inches at the bottom of exterior walls – Having a minimum of six vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.
  5. Enclosed eaves – Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.
  6. Upgraded windows – Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.
  7. Cleared vegetation, weeds, and debris from under decks – Noncombustible materials like concrete, gravel, or bare soil are permitted.
  8. Removal of combustible sheds and other outbuildings to at least a distance of 30 feet – These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses, and playhouses.
  9. Defensible space compliance – following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.
  10. Being safer together – Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as eight dwelling units or as big as 2,500 can create an action plan and start being safer together. Firewise USA is a nationally recognized program with proven results, sponsored by the National Fire Prevention Association.

Chapter 7A of the California Building Standards Code. Chapter 7A is California’s Wildland-Urban Interface (WUI) building code. As such, this chapter of the building code establishes the minimum standards applicable to building materials, systems and/or assemblies used in the exterior design and construction of new buildings located within a WUI Fire Area for the protection of life and property. Chapter 7A was initially adopted in 2008 and has undergone multiple revisions as part of the iterative code development process, integrating the most recent insights and scientific advancements from technical experts in the field. Evidence has indicated Chapter 7A provisions effectively mitigate against losses due to wildfire. Homes built prior to the adoption of Chapter 7A in the WUI are less likely to survive wildfire, and these homes make up a large percentage of the homes in high fire severity areas.

State Fire Marshal's Building Materials Listing Program. The SFM's BML Program was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. In addition, the SFM publishes a complementary handbook to the BML that specifically details products that have been assessed and validated by the SFM to meet the requirements of Chapter 7A. The items featured in this WUI handbook are categorized into eight primary groups. While these products undergo thorough performance-based testing to earn their listing on the BML as a WUI product, it is important to recognize that products not listed on the BML or included in this handbook may still adhere to the prescriptive standards outlined in Chapter 7A, as there is no legal requirement to list WUI products with the SFM.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 8/13/24)

California Democratic Party
City of Santa Rosa
County of Marin
North American Insulation Manufacturers Association
Northern California Youth Policy Coalition
United Policyholders

OPPOSITION: (Verified 8/22/24)

California Building Industry Association
Western Wood Preservers Institute

ARGUMENTS IN SUPPORT: The California Democratic Party stated that “California Democrats are committed to rebuilding a State that provides every person with fair access to improving their lives through good paying jobs, affordable housing, quality education, universal and exceptional healthcare, racial justice and equitable protection against the impacts of climate change. AB 2416 upholds these values and for that [reason], the California Democratic Party is proud to support this important piece of legislation”.

North American Insulation Manufacturers Association contend that “adding BML certified product categories of noncombustible insulation, exterior wall sheathing for Wildland Urban Interface (WUI), and non-wood roof covering/assemblies for WUI, which are recognized by the State Fire Marshal as providing a higher level of fire safety, to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position consumers for access to property insurance and potential rate relief.”

ARGUMENTS IN OPPOSITION: The Western Wood Preservers Institute and the CBIA argue that “all materials approved on the State Fire Marshal’s Building Materials Listing and deemed to comply with Chapter 7A should be considered viable options to improve the resilience of properties across the state. Furthermore, all materials complying with the provisions of Chapter 7A – regardless of their listing status – should be considered viable options for home hardening, because the State Fire Marshal Listed WUI Handbook itself highlights that ‘products that are not [Building Materials Listing] listed, nor in this handbook, may still comply with the prescriptive standards of Chapter 7A’. As such, while the intent of this bill is laudable, the currently proposed language would inadvertently circumvent the State’s building code and may lead to design control which could severely limit options – and increase costs – for home hardening without any corresponding increase in safety.”

ASSEMBLY FLOOR: 51-14, 5/22/24

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Connolly, Mike Fong, Gabriel, Garcia, Gipson, Haney, Hart, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Rendon, Reyes, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

NOES: Alanis, Chen, Davies, Dixon, Flora, Vince Fong, Gallagher, Hoover, Jim Patterson, Joe Patterson, Sanchez, Ta, Waldron, Wallis

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Grayson, Holden, Lackey, Mathis, McKinnor, Ramos, Luz Rivas, Rodriguez, Valencia, Wilson

Prepared by: Jill Rice / INS. / (916) 651-4110

8/25/24 13:35:30

**** END ****

 THIRD READING  

Bill No: AB 2416

Author: Connolly (D)

Amended: 6/27/24 in Senate

Vote: 21

SENATE INSURANCE COMMITTEE: 6-0, 6/26/24

AYES: Rubio, Alvarado-Gil, Caballero, Cortese, Dodd, Ochoa Bogh

NO VOTE RECORDED: Niello

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 51-14, 5/22/24 - See last page for vote

SUBJECT: Residential property insurance: wildfire risk

SOURCE: Author

DIGEST:

This bill requires the California Department of Insurance (CDI), on or before January 1, 2030, and every five years thereafter, to  consider whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs As part of this consideration, this bill requires the CDI to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

ANALYSIS:

Existing law:

1. Provides for the regulation of insurers, agents, and brokers, and other insurance-like organizations by the Insurance Commissioner (Commissioner), and imposes a broad range of financial solvency, licensing, and market behavior requirements, as set forth in the Insurance Code.
2. Establishes the “Safer from Wildfires” Framework.
3. Requires the State Fire Marshal (SFM) to biennially prepare and publish listings of construction materials and equipment and methods of construction and of installation of equipment, together with the name of any person, firm, corporation, association, or similar organization designated as the manufacturer, representative, or supplier, which are in conformity with building standards relating to fire and panic safety adopted and published in the State Building Standards Code.

This bill requires the CDI, on or before January 1, 2030, and every five years thereafter, to evaluate CDI’s Safer from Wildfires framework to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. Specifically, this bill:

1. Requires CDI, as part of its first evaluation, to evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of construction materials included by the Office of the SFM on the Building Materials Listing (BML).
2. Allows CDI, in its first evaluation, to evaluate whether to include the installation of additional construction materials included by the Office of the SFM on the BML.
3. Requires CDI as part of its evaluation to do both of the following: a) Consult with the California Office of Emergency Services (Cal OES), the California Department of Forestry and Fire Protection (CAL FIRE), the California Public Utilities Commission (CPUC), and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation. b) Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires regulations.
4. Requires CDI to develop and implement a process that allows public participation that includes, at a minimum, all of the following:
   1. Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for CDI to consider as part of its evaluation;
   2. Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by CDI for inclusion in the Safer from Wildfires regulations;
   3. Making available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs CDI proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations; and
   4. Requires, if CDI makes public, a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures to initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
5. Defines “building materials listing,” “noncombustible,” “and “Safer from Wildfires regulations.”
6. Makes finding and declarations.

Background

According to the author:

As the Legislature, Governor, and the Department of Insurance work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. As new and safer building materials come to market and wildfire prevention methods evolve, it is important that we periodically revisit the regulations and evaluate if they capture the best mitigation practices available and if the regulations are offering as much relief as possible to the people who are doing the right thing. This bill represents a reasonable step the Legislature can take to help consumers save money on their insurance bills and reduce the risk of disaster for vulnerable communities and the families that live there.

Comments

California Safer from Wildfires. California Safer from Wildfires is a comprehensive, multi-agency initiative established to enhance wildfire safety and preparedness. In October 2019, Insurance Commissioner Ricardo Lara convened a virtual investigatory hearing to initiate a series of regulatory actions aimed at protecting residents from the increasing risk of wildfires. Three years later, in October 2022, Commissioner Lara unveiled the Safer From Wildfire regulations as the first in the nation requiring insurance companies to provide discounts to consumers. The regulation is now state law and enshrined in the California Code of Regulations. The regulations involve collaboration among several state agencies, including CAL FIRE, CPUC, Cal OES, and CDI. These regulations have only been in effect for less than two years, so they are still in their infancy stages. The primary objectives of the Safer from Wildfires initiative include:

1. Reducing Wildfire Risk. Implementing measures to reduce the risk of wildfires through vegetation management, controlled burns, and other fuel reduction strategies.
2. Infrastructure Hardening. Enhancing the resilience of critical infrastructure, such as power lines and communication systems, to prevent them from igniting wildfires or being damaged by them.
3. Improving Emergency Response. Strengthening the state's emergency response capabilities to ensure rapid and effective action during wildfire incidents. This includes better coordination among agencies, improved communication systems, and increased resources for firefighting efforts.
4. Community Preparedness. Educating and preparing communities to respond to wildfires. This involves public awareness campaigns, evacuation planning, and encouraging the creation of defensible space around homes and properties.
5. Insurance and Financial Protections. Ensuring that homeowners and communities have access to adequate insurance coverage and financial resources to recover from the impacts of wildfire.
6. Regulations and Policies. Developing and enforcing regulations and policies that support wildfire risk reduction and safety measures, including building codes, land-use planning, and utility regulations.

The initiative developed 10 steps consumers can take to make their homes safer from wildfires:

• Class-A fire rated roof – Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets. Wood shake shingles are not Class A fire-resistant rated.

• Five foot ember resistant zone, including fencing – Removing greenery and replacing wood chips with stone or decomposed granite five feet around your home prevents fire from getting a foot in the door. Replacing wood fencing connecting to your home with metal is critical because it can act like a candle wick leading fire straight to your home.

• Ember- and fire-resistant vents – Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.

• Non-combustible six inches at the bottom of exterior walls – Having a minimum of six vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.

• Enclosed eaves – Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.

• Upgraded windows – Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.

• Cleared vegetation, weeds, and debris from under decks – Noncombustible materials like concrete, gravel, or bare soil are permitted.

• Removal of combustible sheds and other outbuildings to at least a distance of 30 feet – These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses, and playhouses.

• Defensible space compliance – following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.

• Being safer together – Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as eight dwelling units or as big as 2,500 can create an action plan and start being safer together. Firewise USA is a nationally recognized program with proven results, sponsored by the National Fire Prevention Association.

Chapter 7A of the California Building Standards Code. Chapter 7A is California’s Wildland-Urban Interface (WUI) building code. As such, this chapter of the building code establishes the minimum standards applicable to building materials, systems and/or assemblies used in the exterior design and construction of new buildings located within a WUI Fire Area for the protection of life and property. Chapter 7A was initially adopted in 2008 and has undergone multiple revisions as part of the iterative code development process, integrating the most recent insights and scientific advancements from technical experts in the field. Evidence has indicated Chapter 7A provisions effectively mitigate against losses due to wildfire. Homes built prior to the adoption of Chapter 7A in the WUI are less likely to survive wildfire, and these homes make up a large percentage of the homes in high fire severity areas.

State Fire Marshal's Building Materials Listing Program. The SFM's BML Program was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. In addition, the SFM publishes a complementary handbook to the BML that specifically details products that have been assessed and validated by the SFM to meet the requirements of Chapter 7A. The items featured in this WUI handbook are categorized into eight primary groups. While these products undergo thorough performance-based testing to earn their listing on the BML as a WUI product, it is important to recognize that products not listed on the BML or included in this handbook may still adhere to the prescriptive standards outlined in Chapter 7A, as there is no legal requirement to list WUI products with the SFM.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to Senate Appropriations Committee:

• Unknown, likely significant ongoing costs ranging into the hundreds of thousands of dollars to CDI every five years (Insurance Fund). While the bill only requires CDI to consider updating the Safer from Wildfires regulations, assuming that the department will revise the regulations on the schedule proposed by the bill, the ongoing fiscal impact of this bill will continue to be significant.
• The California Department of Forestry and Fire Protection (CAL FIRE) reports costs of $240,000 in year one and $453,000 in year two and ongoing for 2.0 additional mechanical engineers (Licensing and Certification Fund). Workload includes reviewing increased applications for the Building Materials Listing program, reviewing lab accreditations, conducting lab inspections, and providing training and other educational support to stakeholders and other industry staff. CAL FIRE notes additional ongoing travel costs of approximately $20,000 to conduct these trainings throughout the state.
• Minor and absorbable costs to the Office of Emergency Services (OES).

SUPPORT: (Verified 8/13/24)

California Democratic Party
City of Santa Rosa
County of Marin
North American Insulation Manufacturers Association
Northern California Youth Policy Coalition
United Policyholders

OPPOSITION: (Verified 8/22/24)

California Building Industry Association
Western Wood Preservers Institute

ARGUMENTS IN SUPPORT: The California Democratic Party stated that “California Democrats are committed to rebuilding a State that provides every person with fair access to improving their lives through good paying jobs, affordable housing, quality education, universal and exceptional healthcare, racial justice and equitable protection against the impacts of climate change. AB 2416 upholds these values and for that [reason], the California Democratic Party is proud to support this important piece of legislation”.

North American Insulation Manufacturers Association contend that “adding BML certified product categories of noncombustible insulation, exterior wall sheathing for Wildland Urban Interface (WUI), and non-wood roof covering/assemblies for WUI, which are recognized by the State Fire Marshal as providing a higher level of fire safety, to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position consumers for access to property insurance and potential rate relief.”

ARGUMENTS IN OPPOSITION: The Western Wood Preservers Institute and the California Building Industry Association argue that “all materials approved on the State Fire Marshal’s Building Materials Listing and deemed to comply with Chapter 7A should be considered viable options to improve the resilience of properties across the state. Furthermore, all materials complying with the provisions of Chapter 7A – regardless of their listing status – should be considered viable options for home hardening, because the State Fire Marshal Listed WUI Handbook itself highlights that ‘products that are not [Building Materials Listing] listed, nor in this handbook, may still comply with the prescriptive standards of Chapter 7A’. As such, while the intent of this bill is laudable, the currently proposed language would inadvertently circumvent the State’s building code and may lead to design control which could severely limit options – and increase costs – for home hardening without any corresponding increase in safety.”

ASSEMBLY FLOOR: 51-14, 5/22/24

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Connolly, Mike Fong, Gabriel, Garcia, Gipson, Haney, Hart, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Rendon, Reyes, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

NOES: Alanis, Chen, Davies, Dixon, Flora, Vince Fong, Gallagher, Hoover, Jim Patterson, Joe Patterson, Sanchez, Ta, Waldron, Wallis

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Grayson, Holden, Lackey, Mathis, McKinnor, Ramos, Luz Rivas, Rodriguez, Valencia, Wilson

Prepared by: Jill Rice / INS. / (916) 651-4110

8/22/24 11:52:08

**** END ****

 THIRD READING  

Bill No: AB 2416

Author: Connolly (D)

Amended: 6/27/24 in Senate

Vote: 21

SENATE INSURANCE COMMITTEE: 6-0, 6/26/24

AYES: Rubio, Alvarado-Gil, Caballero, Cortese, Dodd, Ochoa Bogh

NO VOTE RECORDED: Niello

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 51-14, 5/22/24 - See last page for vote

SUBJECT: Residential property insurance: wildfire risk

SOURCE: Author

DIGEST:

This bill requires the California Department of Insurance (CDI), on or before January 1, 2030, and every five years thereafter, to  consider whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs As part of this consideration, this bill requires the CDI to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

ANALYSIS:

Existing law:

1. Provides for the regulation of insurers, agents, and brokers, and other insurance-like organizations by the Insurance Commissioner (Commissioner), and imposes a broad range of financial solvency, licensing, and market behavior requirements, as set forth in the Insurance Code.
2. Establishes the “Safer from Wildfires” Framework.
3. Requires the State Fire Marshal (SFM) to biennially prepare and publish listings of construction materials and equipment and methods of construction and of installation of equipment, together with the name of any person, firm, corporation, association, or similar organization designated as the manufacturer, representative, or supplier, which are in conformity with building standards relating to fire and panic safety adopted and published in the State Building Standards Code.

This bill requires the CDI, on or before January 1, 2030, and every five years thereafter, to evaluate CDI’s Safer from Wildfires framework to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. Specifically, this bill:

1. Requires CDI, as part of its first evaluation, to evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of construction materials included by the Office of the SFM on the Building Materials Listing (BML).
2. Allows CDI, in its first evaluation, to evaluate whether to include the installation of additional construction materials included by the Office of the SFM on the BML.
3. Requires CDI as part of its evaluation to do both of the following: a) Consult with the California Office of Emergency Services (Cal OES), the California Department of Forestry and Fire Protection (CAL FIRE), the California Public Utilities Commission (CPUC), and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation. b) Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires regulations.
4. Requires CDI to develop and implement a process that allows public participation that includes, at a minimum, all of the following:
   1. Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for CDI to consider as part of its evaluation;
   2. Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by CDI for inclusion in the Safer from Wildfires regulations;
   3. Making available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs CDI proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations; and
   4. Requires, if CDI makes public, a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures to initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
5. Defines “building materials listing,” “noncombustible,” “and “Safer from Wildfires regulations.”
6. Makes finding and declarations.

Background

According to the author:

As the Legislature, Governor, and the Department of Insurance work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. As new and safer building materials come to market and wildfire prevention methods evolve, it is important that we periodically revisit the regulations and evaluate if they capture the best mitigation practices available and if the regulations are offering as much relief as possible to the people who are doing the right thing. This bill represents a reasonable step the Legislature can take to help consumers save money on their insurance bills and reduce the risk of disaster for vulnerable communities and the families that live there.

Comments

California Safer from Wildfires. California Safer from Wildfires is a comprehensive, multi-agency initiative established to enhance wildfire safety and preparedness. In October 2019, Insurance Commissioner Ricardo Lara convened a virtual investigatory hearing to initiate a series of regulatory actions aimed at protecting residents from the increasing risk of wildfires. Three years later, in October 2022, Commissioner Lara unveiled the Safer From Wildfire regulations as the first in the nation requiring insurance companies to provide discounts to consumers. The regulation is now state law and enshrined in the California Code of Regulations. The regulations involve collaboration among several state agencies, including CAL FIRE, CPUC, Cal OES, and CDI. These regulations have only been in effect for less than two years, so they are still in their infancy stages. The primary objectives of the Safer from Wildfires initiative include:

1. Reducing Wildfire Risk. Implementing measures to reduce the risk of wildfires through vegetation management, controlled burns, and other fuel reduction strategies.
2. Infrastructure Hardening. Enhancing the resilience of critical infrastructure, such as power lines and communication systems, to prevent them from igniting wildfires or being damaged by them.
3. Improving Emergency Response. Strengthening the state's emergency response capabilities to ensure rapid and effective action during wildfire incidents. This includes better coordination among agencies, improved communication systems, and increased resources for firefighting efforts.
4. Community Preparedness. Educating and preparing communities to respond to wildfires. This involves public awareness campaigns, evacuation planning, and encouraging the creation of defensible space around homes and properties.
5. Insurance and Financial Protections. Ensuring that homeowners and communities have access to adequate insurance coverage and financial resources to recover from the impacts of wildfire.
6. Regulations and Policies. Developing and enforcing regulations and policies that support wildfire risk reduction and safety measures, including building codes, land-use planning, and utility regulations.

The initiative developed 10 steps consumers can take to make their homes safer from wildfires:

• Class-A fire rated roof – Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets. Wood shake shingles are not Class A fire-resistant rated.

• Five foot ember resistant zone, including fencing – Removing greenery and replacing wood chips with stone or decomposed granite five feet around your home prevents fire from getting a foot in the door. Replacing wood fencing connecting to your home with metal is critical because it can act like a candle wick leading fire straight to your home.

• Ember- and fire-resistant vents – Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.

• Non-combustible six inches at the bottom of exterior walls – Having a minimum of six vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.

• Enclosed eaves – Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.

• Upgraded windows – Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.

• Cleared vegetation, weeds, and debris from under decks – Noncombustible materials like concrete, gravel, or bare soil are permitted.

• Removal of combustible sheds and other outbuildings to at least a distance of 30 feet – These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses, and playhouses.

• Defensible space compliance – following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.

• Being safer together – Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as eight dwelling units or as big as 2,500 can create an action plan and start being safer together. Firewise USA is a nationally recognized program with proven results, sponsored by the National Fire Prevention Association.

Chapter 7A of the California Building Standards Code. Chapter 7A is California’s Wildland-Urban Interface (WUI) building code. As such, this chapter of the building code establishes the minimum standards applicable to building materials, systems and/or assemblies used in the exterior design and construction of new buildings located within a WUI Fire Area for the protection of life and property. Chapter 7A was initially adopted in 2008 and has undergone multiple revisions as part of the iterative code development process, integrating the most recent insights and scientific advancements from technical experts in the field. Evidence has indicated Chapter 7A provisions effectively mitigate against losses due to wildfire. Homes built prior to the adoption of Chapter 7A in the WUI are less likely to survive wildfire, and these homes make up a large percentage of the homes in high fire severity areas.

State Fire Marshal's Building Materials Listing Program. The SFM's BML Program was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. In addition, the SFM publishes a complementary handbook to the BML that specifically details products that have been assessed and validated by the SFM to meet the requirements of Chapter 7A. The items featured in this WUI handbook are categorized into eight primary groups. While these products undergo thorough performance-based testing to earn their listing on the BML as a WUI product, it is important to recognize that products not listed on the BML or included in this handbook may still adhere to the prescriptive standards outlined in Chapter 7A, as there is no legal requirement to list WUI products with the SFM.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to Senate Appropriations Committee:

• Unknown, likely significant ongoing costs ranging into the hundreds of thousands of dollars to CDI every five years (Insurance Fund). While the bill only requires CDI to consider updating the Safer from Wildfires regulations, assuming that the department will revise the regulations on the schedule proposed by the bill, the ongoing fiscal impact of this bill will continue to be significant.
• The California Department of Forestry and Fire Protection (CAL FIRE) reports costs of $240,000 in year one and $453,000 in year two and ongoing for 2.0 additional mechanical engineers (Licensing and Certification Fund). Workload includes reviewing increased applications for the Building Materials Listing program, reviewing lab accreditations, conducting lab inspections, and providing training and other educational support to stakeholders and other industry staff. CAL FIRE notes additional ongoing travel costs of approximately $20,000 to conduct these trainings throughout the state.
• Minor and absorbable costs to the Office of Emergency Services (OES).

SUPPORT: (Verified 8/13/24)

City of Santa Rosa
County of Marin
North American Insulation Manufacturers Association
Northern California Youth Policy Coalition
United Policyholders

OPPOSITION: (Verified 8/13/24)

American Property Casualty Insurance Association
California Building Industry Association
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
Western Wood Preservers Institute

ARGUMENTS IN SUPPORT: North American Insulation Manufacturers Association contend that “adding BML certified product categories of noncombustible insulation, exterior wall sheathing for Wildland Urban Interface (WUI), and non-wood roof covering/assemblies for WUI, which are recognized by the State Fire Marshal as providing a higher level of fire safety, to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position consumers for access to property insurance and potential rate relief.”

ARGUMENTS IN OPPOSITION: The Trades argue that requiring the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation is duplicative of the authority the department already possesses leaving the provisions in the bill unnecessary and potentially resulting in additional, unnecessary work and expense for the department.

The Trades also express their concern that AB 2416 would create a precedent that many other products and materials will seek to be added to the BLM regardless of their efficacy or an insurer’s ability to assess their actuarial value. This will significantly diminish the value of the regulations and undermine the current consistent approach to risk reduction that is critical for success

The Western Wood Preservers Institute and the CBIA argue that “all materials approved on the State Fire Marshal’s Building Materials Listing and deemed to comply with Chapter 7A should be considered viable options to improve the resilience of properties across the state. Furthermore, all materials complying with the provisions of Chapter 7A – regardless of their listing status – should be considered viable options for home hardening, because the State Fire Marshal Listed WUI Handbook itself highlights that ‘products that are not [Building Materials Listing] listed, nor in this handbook, may still comply with the prescriptive standards of Chapter 7A’. As such, while the intent of this bill is laudable, the currently proposed language would inadvertently circumvent the State’s building code and may lead to design control which could severely limit options – and increase costs – for home hardening without any corresponding increase in safety.”

ASSEMBLY FLOOR: 51-14, 5/22/24

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Connolly, Mike Fong, Gabriel, Garcia, Gipson, Haney, Hart, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Rendon, Reyes, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Villapudua, Ward, Weber, Wicks, Wood, Zbur, Robert Rivas

NOES: Alanis, Chen, Davies, Dixon, Flora, Vince Fong, Gallagher, Hoover, Jim Patterson, Joe Patterson, Sanchez, Ta, Waldron, Wallis

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Essayli, Friedman, Grayson, Holden, Lackey, Mathis, McKinnor, Ramos, Luz Rivas, Rodriguez, Valencia, Wilson

Prepared by: Jill Rice / INS. / (916) 651-4110

8/16/24 13:26:16

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2416 (Connolly) - Residential property insurance: wildfire risk

Bill Summary:

AB 2416 requires the California Department of Insurance (CDI) to consider updating the Safer from Wildfires regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs, as specified.

Fiscal Impact:

• Unknown, likely significant ongoing costs ranging into the hundreds of thousands of dollars to CDI every five years (Insurance Fund). While the bill only requires CDI to consider updating the Safer from Wildfires regulations, assuming that the department will revise the regulations on the schedule proposed by the bill, the ongoing fiscal impact of this bill will continue to be significant.
• The California Department of Forestry and Fire Protection (CAL FIRE) reports costs of $240,000 in year one and $453,000 in year two and ongoing for 2.0 additional mechanical engineers (Licensing and Certification Fund). Workload includes reviewing increased applications for the Building Materials Listing program, reviewing lab accreditations, conducting lab inspections, and providing training and other educational support to stakeholders and other industry staff. CAL FIRE notes additional ongoing travel costs of approximately $20,000 to conduct these trainings throughout the state.
• Minor and absorbable costs to the Office of Emergency Services (OES).

Background:

California Safer from Wildfires is a comprehensive, multi-agency initiative established to enhance wildfire safety and preparedness. In October 2019, Insurance Commissioner Ricardo Lara convened a virtual investigatory hearing to initiate a series of regulatory actions aimed at protecting residents from the increasing risk of wildfires. Three years later, in October 2022, Commissioner Lara unveiled the Safer from Wildfire regulations (regulations) as the first in the nation requiring insurance companies to provide discounts to consumers. The regulation is now state law and enshrined in the California Code of Regulations. The regulations involve collaboration among several state agencies, including CAL FIRE, Public Utilities Commission (PUC), OES, and CDI. These regulations have only been in effect for less than two years, so they are still in their infancy stages.

Proposed Law:

• By January 1, 2030 and every five years thereafter, requires CDI to consider whether to update the regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs.
  • If CDI updates the regulations, requires CDI to consider whether to include the installation of construction materials included by the Office of the State Fire Marshal on the Building Materials Listing or in compliance with the most recent provisions of the CA Building Standards Code.
• As part of CDI’s consideration, requires CDI to do all of the following:
  • Consult with OES, CAL FIRE, PUC, and the Office of Planning and Research to identify additional building hardening measures, as specified.
  • Consult with relevant stakeholders to consider potential revisions to the regulations.
  • Develop and implement a process that allows for meaningful public participation that includes, at a minimum, all of the following:
    • Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures.
    • Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for inclusion in the regulations.
    • Making available to the public a final list of building hardening measures identified before amending the regulations.
• If CDI makes the final list of building hardening measures public, requires CDI to initiate the Administrative Procedure Act rulemaking process to amend the regulations within 30 days of publishing the final list.
• States legislative findings and declarations.

-- END --

SENATE COMMITTEE ON INSURANCE

Senator Susan Rubio, Chair

2023 - 2024 Regular

Bill No: AB 2416 Hearing Date: June 26, 2024

SUBJECT: Residential Property Insurance: wildfire risk

DIGEST:

Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the department’s powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.

This bill would require the department, on or before December 31, 2027, and every three years thereafter, to evaluate whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. For its first evaluation, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.

ANALYSIS:

Existing law:

1. Provides for the regulation of insurers, agents, and brokers, and other insurance-like organizations by the Insurance Commissioner (Commissioner), and imposes a broad range of financial solvency, licensing, and market behavior requirements, as set forth in the Insurance Code.
2. Establishes the “Safer from Wildfires” Framework.
3. Requires the State Fire Marshal (SFM) to biennially prepare and publish listings of construction materials and equipment and methods of construction and of installation of equipment, together with the name of any person, firm, corporation, association, or similar organization designated as the manufacturer, representative, or supplier, which are in conformity with building standards relating to fire and panic safety adopted and published in the State Building Standards Code.

This bill:

Requires the California Department of Insurance (CDI), on or before December 31, 2027, and every three years thereafter, to evaluate CDI’s Safer from Wildfires framework to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs.

Specifically, this bill:

1. Requires CDI, as part of its first evaluation, to evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of noncombustible construction materials included by the Office of the SFM on the Building Materials Listing (BML).
2. Allows CDI, in its first evaluation, to evaluate whether to include the installation of additional construction materials included by the Office of the SFM on the BML.
3. Requires CDI as part of its evaluation to do both of the following:
   1. Consult with the California Office of Emergency Services (Cal OES), the California Department of Forestry and Fire Protection (CAL FIRE), the California Public Utilities Commission (CPUC), and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation.
   2. Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires regulations.
4. Requires CDI to develop and implement a process that allows public participation that includes, at a minimum, all of the following:
   1. Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for CDI to consider as part of its evaluation;
   2. Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by CDI for inclusion in the Safer from Wildfires regulations;
   3. Making available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs CDI proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations; and
   4. Requires, if CDI makes public, a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures to initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
5. Defines “building materials listing,” “noncombustible,” “and “Safer from Wildfires regulations.”
6. Makes finding and declarations.

Background (Author’s Statement)

As the Legislature, Governor, and the Department of Insurance work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. As new and safer building materials come to market and wildfire prevention methods evolve, it is important that we periodically revisit the regulations and evaluate if they capture the best mitigation practices available and if the regulations are offering as much relief as possible to the people who are doing the right thing. This bill represents a reasonable step the Legislature can take to help consumers save money on their insurance bills and reduce the risk of disaster for vulnerable communities and the families that live there.

Comments

California Safer from Wildfires

California Safer from Wildfires is a comprehensive, multi-agency initiative established to enhance wildfire safety and preparedness. In October 2019, Insurance Commissioner Ricardo Lara convened a virtual investigatory hearing to initiate a series of regulatory actions aimed at protecting residents from the increasing risk of wildfires. Three years later, in October 2022, Commissioner Lara unveiled the Safer From Wildfire regulations as the first in the nation requiring insurance companies to provide discounts to consumers. The regulation is now state law and enshrined in the California Code of Regulations. The regulations involve collaboration among several state agencies, including CAL FIRE, CPUC, Cal OES, and CDI. These regulations have only been in effect for less than two years, so they are still in their infancy stages.

The primary objectives of the Safer from Wildfires initiative include:

1. Reducing Wildfire Risk: Implementing measures to reduce the risk of wildfires through vegetation management, controlled burns, and other fuel reduction strategies.
2. Infrastructure Hardening: Enhancing the resilience of critical infrastructure, such as power lines and communication systems, to prevent them from igniting wildfires or being damaged by them.
3. Improving Emergency Response: Strengthening the state's emergency response capabilities to ensure rapid and effective action during wildfire incidents. This includes better coordination among agencies, improved communication systems, and increased resources for firefighting efforts.
4. Community Preparedness: Educating and preparing communities to respond to wildfires. This involves public awareness campaigns, evacuation planning, and encouraging the creation of defensible space around homes and properties.
5. Insurance and Financial Protections: Ensuring that homeowners and communities have access to adequate insurance coverage and financial resources to recover from the impacts of wildfire.
6. Regulations and Policies: Developing and enforcing regulations and policies that support wildfire risk reduction and safety measures, including building codes, land-use planning, and utility regulations.

The initiative developed 10 steps consumers can take to make their homes safer from wildfires:

• Class-A fire rated roof – Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets. Wood shake shingles are not Class A fire-resistant rated.
• Five foot ember resistant zone, including fencing – Removing greenery and replacing wood chips with stone or decomposed granite five feet around your home prevents fire from getting a foot in the door. Replacing wood fencing connecting to your home with metal is critical because it can act like a candle wick leading fire straight to your home.
• Ember- and fire-resistant vents – Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.
• Non-combustible six inches at the bottom of exterior walls – Having a minimum of six vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.
• Enclosed eaves – Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.
• Upgraded windows – Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.
• Cleared vegetation, weeds, and debris from under decks – Noncombustible materials like concrete, gravel, or bare soil are permitted.
• Removal of combustible sheds and other outbuildings to at least a distance of 30 feet – These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses, and playhouses.
• Defensible space compliance – following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.
• Being safer together – Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as eight dwelling units or as big as 2,500 can create an action plan and start being safer together. Firewise USA is a nationally recognized program with proven results, sponsored by the National Fire Prevention Association.

Chapter 7A of the California Building Standards Code

Chapter 7A is California’s Wildland-Urban Interface (WUI) building code. As such, this chapter of the building code establishes the minimum standards applicable to building materials, systems and/or assemblies used in the exterior design and construction of new buildings located within a WUI Fire Area for the protection of life and property.^[1] Chapter 7A was initially adopted in 2008 and has undergone multiple revisions as part of the iterative code development process, integrating the most recent insights and scientific advancements from technical experts in the field.

Evidence has indicated Chapter 7A provisions effectively mitigate against losses due to wildfire. Homes built prior to the adoption of Chapter 7A in the WUI are less likely to survive wildfire, and these homes make up a large percentage of the homes in high fire severity areas.^[2]

State Fire Marshal's Building Materials Listing Program

The SFM's BML Program was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. In addition, the SFM publishes a complementary handbook to the BML that specifically details products that have been assessed and validated by the SFM to meet the requirements of Chapter 7A. The items featured in this WUI handbook are categorized into eight primary groups. While these products undergo thorough performance-based testing to earn their listing on the BML as a WUI product, it is important to recognize that products not listed on the BML or included in this handbook may still adhere to the prescriptive standards outlined in Chapter 7A, as there is no legal requirement to list WUI products with the SFM.

Suggested Amendments

Amendment 1

Page 5, Lines 1 – 2

Delete (b) “Noncombustible” has the same meaning as set forth in Section 202 of Title 24 of the California Code of Regulations.

Amendment 2

Page 5, Lines 6 – 7

Delete On or before December 31, 2027 and add January 1, 2030, or thereafter.

Amendment 3

Page 5, Line 7

Delete three and add five

Amendment 4

Page 5, Line 7

Delete shall evaluate and add shall consider

Amendment 5

Page 5, Line 12

Delete The department shall, as a part of its first evaluation, evaluate whether to update the Safer from Wildfire regulations to and insert If the department updates the Safer from Wildfire Regulations it shall, as a part of its first evaluation, evaluate whether to update these regulations to

Amendment 6

Page 5, Line 14

Delete “noncombustible”

Amendment 7

Page 5, Line 17, after Listing,

Insert “or in compliance with the most recent provisions of Chapter 7A of the California Building Standards Code”

Because the Safer From Wildfire regulations are still less than two years in effect these amendments give time for these regulations to take effect and for the CDI to meaningfully implement existing regulations before undertaking a new regulatory process.

Another concern of a 2027 implementation date is that the CDI is consumed with a number of moving pieces that will stretch into the near future, including the Commissioner’s Sustainable Insurance Strategy (SIS), which is arguably the largest insurance reform in decades. This includes promulgating and most importantly, implementing regulations for CAT modeling, rate reform, and reinsurance.

Additionally, the insurance market continues to be in a state of crisis. This would be compounded if insurers are filing for new rates necessitated by a change in regulations every three years. By giving insurers time to adjust to new construction materials, equipment, methods of construction, and of installation of equipment, this will allow all impacted industries to meaningfully explore the success of new technologies.

Finally, nothing in this language prevents the Commissioner from commencing a follow-up rule making should circumstances warrant it. This bill mandates a framework under which a Commissioner must operate, but in no way prevents a Commissioner from initiating a review on their own at any given time. By requiring a later start state and five years in between revisiting these regulations, it will give time for a commissioner to become familiar with the department’s policies and regulatory frameworks to properly address the complexities of the Safer From Wildfires regulations before commencing a mandated rulemaking process.

By striking the word “noncombustible” these amendments ensure that consumers have the broadest range of options available to them, while keeping costs low and still increasing access to wildfire mitigation products.

ARGUMENTS IN SUPPORT:

The California Democratic Party stated that “California Democrats are committed to rebuilding a State that provides every person with fair access to improving their lives through good paying jobs, affordable housing, quality education, universal and exceptional healthcare, racial justice and equitable protection against the impacts of climate change. AB 2416 upholds these values and for that [reason], the California Democratic Party is proud to support this important piece of legislation”.

North American Insulation Manufacturers Association contend that “adding BML-certified product categories of noncombustible insulation, exterior wall sheathing for Wildland Urban Interface (WUI), and non-wood roof covering/assemblies for WUI, which are recognized by the State Fire Marshal as providing a higher level of fire safety, to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position consumers for access to property insurance and potential rate relief.”

ARGUMENTS IN OPPOSITION:

The Trades argue that the three-year schedule mandated in legislation to evaluate whether or not to update its regulations to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs is excessive and could result in consistent changes to the regulations which will trigger constant changes for both modelers and insurers. They also argue that requiring the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation is duplicative of the authority the department already possesses leaving the provisions in the bill unnecessary and potentially resulting in additional, unnecessary work and expense for the department.

Finally, the Trades express their concern that AB 2416 would create a precedent that many other products and materials will seek to be added to the BLM regardless of their efficacy or an insurer’s ability to assess their actuarial value. This will significantly diminish the value of the regulations and undermine the current consistent approach to risk reduction that is critical for success.

The Wood Council, Forestry Association, CBIA, and Western Wood Preservers Institute argue that “this bill creates a preference for only noncombustible materials that are on the Office of the State Fire Marshal’s Building Materials Listing through an insurance incentive, which runs counter to the more holistic and consensus-based approach to wildfire mitigation described in Chapter 7A of the California Building Standards Code (CBSC). Specific preference for noncombustible materials without consideration of how they are used in combination with other materials may lead to increased cost with no home hardening benefit.”

SUPPORT:

California Democratic Party
City of Santa Rosa
North American Insulation Manufacturers Association (Sponsor)

United Policyholders

OPPOSITION:

American Property Casualty Insurance Association
American Wood Council
California Building Industry Association (CBIA)
California Forestry Association
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
Western Wood Preservers Institute

-- END --

1. Chapter 7A – Materials and construction Methods for Exterior Wildfire Exposure

   https://codes.iccsafe.org/content/CABC2022P2/chapter-7a-sfm-materials-and-construction-methods-for-exterior-wildfire-exposure ↑

2. “Build to Survive: Homes in California’s Burn Zones Must Adopt Fire-Safe Code”, April 22, 2019. https://www.govtech.com/em/preparedness/editorial-build-to-survive-homes-in-californias-burn-

   zones-must-adopt-fire-safe-code.html ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2416

Author:(Connolly)

As Amended Ver:April 22, 2024

Majority vote

SUMMARY

Requires, by December 31, 2027, and every three years thereafter, the Department of Insurance (CDI) to evaluate whether to update the Safer from Wildfires regulations to include certain building hardening measures.

Major Provisions

1. Requires CDI to evaluate whether to update the Safer from Wildfires regulations to include additional building hardening measures for property-level mitigation efforts and community-wide mitigation programs. CDI's first evaluation must consider updating regulations to include the installation of non-combustible construction materials on the Office of the State Fire Marshal's (SFM's) Building Materials Listing (BML).
2. Requires CDI to consult with the Office of Emergency Services (OES), Department of Forestry and Fire Protection (CAL FIRE), Public Utilities Commission (PUC), and Office of Planning and Research (OPR) to identify additional building hardening measures to consider as part of CDI's evaluation.
3. Requires CDI to develop and implement a meaningful public participation process as part of CDI's evaluation. The process must include at least one public meeting to solicit suggestions for additional building hardening measures and making a preliminary list of measures available for public review and comment during another public meeting.
4. Requires, if CDI's evaluation results in a final list of building hardening measures to adopt, CDI to initiate the Administrative Procedure Act process and amend the Safer from Wildfires regulations within 30 days of publishing the final list.

COMMENTS

1. CDI Safer from Wildfires Framework: In 2022, CDI announced the "Safer from Wildfires" framework, which directs insurers to provide discounts to consumers and businesses if they take specified mitigation measures. In crafting this regulation, CDI worked with emergency preparedness agencies in the Governor's Administration, including CAL FIRE, Cal OES, the Governor's Office of Planning and Research, and the California Public Utilities Commission.

The framework provides a list of home and community wildfire mitigation measures that consumers and businesses can take to provide protection for the structure, the immediate surroundings, and the community. Under the regulation, the more "Safer from Wildfires" steps a consumer takes the more they may be able to save on their insurance.

The regulation required insurance companies to submit new rate filings incorporating the wildfire safety standards created by CDI and also requires insurance companies to provide consumers with their property's "wildfire risk score" and a right to appeal that score. Once the regulation is fully implemented, it should help protect consumers. Steps a consumer can take to help mitigate their property under this framework include:

1. Class-A fire rated roof: Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets.
2. Five-foot ember resistant zone, including fencing: Removing greenery and replacing wood chips with stone or decomposed granite five feet around your home prevents fire from getting a foot in the door.
3. Ember- and fire-resistant vents: Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.
4. Non-combustible six inches at the bottom of exterior walls: Having a minimum of six vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.
5. Enclosed eaves: Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.
6. Upgraded windows: Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.
7. Cleared vegetation, weeds and debris from under decks: Noncombustible materials like concrete, gravel, or bare soil are permitted.
8. Removal of combustible sheds and other outbuildings to at least a distance of 30 feet: These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses and playhouses.
9. Defensible space compliance: Following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.
10. Being safer together: Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as eight dwelling units or as big as 2,500 can create an action plan and start being safer together.

An important document to review as it relates to this measure and goes into great detail about the process CDI went through to create the Safer from Wildfire framework. Wildfire Mitigation Partnership Summary Document (ca.gov)

1. Building materials listing: According to the State Fire Marshal's Building Materials Listing Program (BML) was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. This list is updated every two years.
2. California Wildfire Mitigation Program: In 2019, AB 38 (Wood) Chapter 391, required Cal OES and Cal FIRE to establish a Joint Powers Authority (JPA) to administer the California Wildfire Mitigation Program (CWMP). The purpose of the CWMP is to harden homes and establish defensible space in high risk, socially vulnerable communities; and provide financial assistance for low- and moderate-income households. These efforts encourage cost-effective wildfire resilience and hazard mitigation measures to create fire-resistant homes, businesses, public buildings, and public spaces.

According to the Author

According to the author, "As the Legislature, Governor, and [CDI] work to solve California's home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. The materials outlined in AB 2416 are proven to provide a higher level of safety for structures and help to slow the spread of fire through neighborhoods. This common-sense expansion of the Safer from Wildfire program will be a direct benefit for homeowners, and by incentivizing greater use of noncombustible materials, reduce catastrophic losses, which will then reduce the number and size of claims filed with insurers."

Arguments in Support

According to the North American Insulation Manufacturers Association, "Adding BML-certified product categories…to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position customers for access to property insurance and potential rate relief."

Arguments in Opposition

According to the American Property Casualty Insurance Association, "this bill creates an illusion that in the absence of community-level mitigation, individual efforts like those specified in the bill can provide adequate wildfire mitigation. Many homes in the wildland-urban interface are in densely populated neighborhoods where fires from an adjacent structure can provide extreme radiant heat which would ignite a home despite having met the requirements in the bill."

FISCAL COMMENTS

According to the Assembly Appropriations Committee, Costs of approximately $241,000 in fiscal year (FY) 2026-27, $986,000 in FY 2027-28, and $1.3 million ongoing every three years to CDI to undergo the prescribed evaluation process (Insurance Fund).

Minor and absorbable costs to OES, CAL FIRE, PUC, and OPR to consult with CDI on additional building hardening measures.

VOTES

ASM INSURANCE: 12-2-1

YES: Calderon, Alvarez, Bauer-Kahan, Berman, Gipson, Jones-Sawyer, Lowenthal, Ortega, Petrie-Norris, Blanca Rubio, Valencia, Wood

NO: Joe Patterson, Wallis

ABS, ABST OR NV: Chen

ASM APPROPRIATIONS: 11-4-0

YES: Wicks, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Sanchez, Dixon, Jim Patterson, Ta

UPDATED

VERSION: April 22, 2024

CONSULTANT: Kathleen O'Malley / INS. / (916) 319-2086 FN: 0003040

Date of Hearing: May 1, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2416

Author:(Connolly) – As Amended Ver:April 22, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires, by December 31, 2027, and every three years thereafter, the Department of Insurance (CDI) to evaluate whether to update the Safer from Wildfires regulations to include certain building hardening measures.

Specifically, this bill:

1. Requires CDI to evaluate whether to update the Safer from Wildfires regulations to include additional building hardening measures for property-level mitigation efforts and community-wide mitigation programs. CDI’s first evaluation must consider updating regulations to include the installation of non-combustible construction materials on the Office of the State Fire Marshal’s (SFM’s) Building Materials Listing (BML).
2. Requires CDI to consult with the Office of Emergency Services (OES), Department of Forestry and Fire Protection (CAL FIRE), Public Utilities Commission (PUC), and Office of Planning and Research (OPR) to identify additional building hardening measures to consider as part of CDI’s evaluation.
3. Requires CDI to develop and implement a meaningful public participation process as part of CDI’s evaluation. The process must include at least one public meeting to solicit suggestions for additional building hardening measures and making a preliminary list of measures available for public review and comment during another public meeting.
4. Requires, if CDI’s evaluation results in a final list of building hardening measures to adopt, CDI to initiate the Administrative Procedure Act process and amend the Safer from Wildfires regulations within 30 days of publishing the final list.

FISCAL EFFECT:

1. Costs of approximately $241,000 in fiscal year (FY) 2026-27, $986,000 in FY 2027-28, and $1.3 million ongoing every three years to CDI to undergo the prescribed evaluation process (Insurance Fund).
2. Minor and absorbable costs to OES, CAL FIRE, PUC, and OPR to consult with CDI on additional building hardening measures.

COMMENTS:

1. Purpose. According to the author:

As the Legislature, Governor, and [CDI] work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. The materials outlined in AB 2416 are proven to provide a higher level of safety for structures and help to slow the spread of fire through neighborhoods. This common-sense expansion of the Safer from Wildfire program will be a direct benefit for homeowners, and by incentivizing greater use of noncombustible materials, reduce catastrophic losses, which will then reduce the number and size of claims filed with insurers.

1. Support and Opposition. This bill is supported by the North American Insulation Manufacturers Association, which argues, “Adding BML-certified product categories…to the home hardening measures specified in the Safer from Wildfires regulations will accelerate the adoption of BML-certified building materials and better position customers for access to property insurance and potential rate relief.”

This bill is opposed by a coalition of insurance associations led by the American Property Casualty Insurance Association, which argues:

this bill creates an illusion that in the absence of community-level mitigation, individual efforts like those specified in the bill can provide adequate wildfire mitigation. Many homes in the wildland-urban interface are in densely populated neighborhoods where fires from an adjacent structure can provide extreme radiant heat which would ignite a home despite having met the requirements in the bill.

1. Background.

Safer from Wildfires. The Safer from Wildfires framework (Framework) was created in February 2022 in partnership between CDI, OES, CAL FIRE, OPR, and PUC. The Framework provides a list of home and community wildfire mitigation measures that a consumer may take to protect the structure, immediate surroundings, and community, such as adopting a Class-A fire-rated roof, a five-foot ember resistant zone, ember- and fire-resistant vents, or upgraded windows. Under subsequent regulations proposed by Insurance Commissioner Ricardo Lara, which took effect on October 14, 2022, a consumer who adopts more Framework mitigation steps may save more money on insurance costs. Specifically, the regulations require insurance companies to submit new rate filings incorporating Framework standards and requires a wildfire risk model used in an insurer’s rating plan be provided to CDI as part of the insurer’s complete rate application. This process of implementing the regulations is still underway.

SFM’s BML. The BML was initially established to approve fire alarm systems and devices before the sale or marketing of such systems in the state. Over time, the list expanded to include SFM-designated approvals of various other materials, such as roof coverings, wall assemblies, and hardware. Approval of BML products involves rigorous testing by an SFM-accredited laboratory. The BML is updated every two years and conveys essential information about a product to building authorities, architects, engineers, contractors, and the fire service. This bill requires CDI to evaluate, every three years, beginning December 31, 2027, whether to update the Safer from Wildfires regulations to include additional building hardening measures, such as the installation of BML non-combustible construction materials.

1. Related Legislation. AB 1933 (Calderon) requires CDI to report information to the Legislature regarding wildfire risk models used in the Safer from Wildfires regulations. AB 1933 is pending on this committee’s suspense file.

AB 2983 (Rodriguez) requires OES, CAL FIRE, and CDI to assess the extent to which wildfire mitigation projects will increase insurance availability. AB 2983 is pending hearing in this committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON INSURANCE

Lisa Calderon, Chair

ABPCA Bill Id:AB 2416 (

Author:Connolly) – As Amended Ver:April 10, 2024

SUBJECT: Residential property insurance: wildfire risk

SUMMARY: Requires the California Department of Insurance (CDI), on or before January 1, 2026 and every three years thereafter, to evaluate CDIs Safer from Wildfires framework to include additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs. Specifically, this bill:

1. Requires CDI, as part of its first evaluation, to evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of noncombustible construction materials included by the Office of the State Fire Marshal (SFM) on the Building Materials Listing (BML) in any of the following categories:
   1. Insulation (SFM Listing Category 2440);
   2. Exterior Wall Siding and Sheathing for Wildland Urban Interface (SFM Listing Category 8140); or,
   3. Non-Wood Roof Covering/Assemblies for Wildland Urban Interface (SFM Listing Category 8180).
2. Allows CDI, in its first evaluation, to evaluate whether to include the installation of additional construction materials included by the Office of the SFM on the BML.
3. Requires CDI as part of its evaluation to do both of the following:
   1. Consult with the Office of Emergency Services, the Department of Forestry and Fire Protection, the Public Utilities Commission, and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation.
   2. Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires regulations, including all of the following:
      1. The property insurance industry;
      2. Fire service professionals;
      3. Fire-resistant building material manufacturers; and,
      4. Organizations representing California property insurance policy holders.
4. Requires CDI to develop and implement a process that allows public participation that includes, at a minimum, all of the following:
   1. Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for CDI to consider as part of its evaluation;
   2. Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by CDI for inclusion in the Safer from Wildfires regulations.;
   3. Making available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs CDI proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations; and,
   4. Requires, if CDI makes public, a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures to initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
      
5. Defines “building materials listing,” “noncombustible,” “and “Safer from Wildfires regulations.”
6. Makes finding and declarations.

EXISTING LAW:

1. Provides for the regulation of insurers, agents and brokers, and other insurance-like organizations by the Insurance Commissioner, and imposes a broad range of financial solvency, licensing, and market behavior requirements, as set forth in the Insurance Code.
2. Establishes the “Safer from Wildfires” Framework. (Section 2644.9 of Title 10 of the California Code of Regulations)
3. Requires the SFM to biennially prepare and publish listings of construction materials and equipment and methods of construction and of installation of equipment, together with the name of any person, firm, corporation, association, or similar organization designated as the manufacturer, representative, or supplier, which are in conformity with building standards relating to fire and panic safety adopted and published in the State Building Standards Code. (Health and Safety Code, Section 13144.1)

FISCAL EFFECT: Unknown

COMMENTS:

1. Purpose: According to the author, “As the Legislature, Governor, and the Department of Insurance work to solve California’s home insurance crisis, we must focus on providing real benefits and incentives to those who are working their hardest to keep their homes and families safe from wildfires. The materials outlined in AB 2416 are proven to provide a higher level of safety for structures and help to slow the spread of fire through neighborhoods. This common-sense expansion of the Safer from Wildfire program will be a direct benefit for homeowners, and by incentivizing greater use of noncombustible materials, reduce catastrophic losses, which will then reduce the number and size of claims filed with insurers.”
2. Background: CDI Safer from Wildfires Framework: In 2022, CDI announced the “Safer from Wildfires” framework, which directs insurers to provide discounts to consumers and businesses if they take specified mitigation measures. In crafting this regulation, CDI worked with emergency preparedness agencies in the Governor’s Administration, including CAL FIRE, Cal OES, the Governor’s Office of Planning and Research, and the California Public Utilities Commission.

The framework provides a list of home and community wildfire mitigation measures that consumers and businesses can take to provide protection for the structure, the immediate surroundings, and the community. Under the regulation, the more “Safer from Wildfires” steps a consumer takes the more they may be able to save on their insurance.

The regulation required insurance companies to submit new rate filings incorporating the wildfire safety standards created by CDI and also requires insurance companies to provide consumers with their property’s “wildfire risk score” and a right to appeal that score. Once the regulation is fully implemented, it should help protect consumers. Steps a consumer can take to help mitigate their property under this framework include:

• Class-A fire rated roof: Most roofs qualify including asphalt shingles, concrete, brick, or masonry tiles, and metal shingles or sheets.
• 5-foot ember resistant zone, including fencing: Removing greenery and replacing wood chips with stone or decomposed granite 5 feet around your home prevents fire from getting a foot in the door.
• Ember- and fire-resistant vents: Installing 1/16 to 1/8 inch noncombustible, corrosion-resistant metal mesh screens over exterior vents can keep wind-blown embers out of your house.
• Non-combustible 6 inches at the bottom of exterior walls: Having a minimum of 6 vertical inches measured from the ground up and from any attached horizontal surface like a deck can stop embers from accumulating and igniting your walls. Noncombustible materials include brick, stone, fiber-cement siding or concrete.
• Enclosed eaves: Installing soffits under your eaves can prevent heat and embers from getting trapped and igniting. When enclosing eaves, non-combustible or ignition resistant materials are recommended.
• Upgraded windows: Multi-paned windows are more resistant to breaking during a wildfire, which helps keep flames from entering. Multi-paned glass or added shutters all qualify.
• Cleared vegetation, weeds and debris from under decks: Noncombustible materials like concrete, gravel, or bare soil are permitted.
• Removal of combustible sheds and other outbuildings to at least a distance of 30 feet: These include sheds, gazebos, accessory dwelling units (ADUs), open covered structures with a solid roof, dog houses and playhouses.
• Defensible space compliance: Following state and local laws requiring defensible space including trimming trees and removal of brush and debris from yard.
• Being safer together: Safer from Wildfires recognizes two community-wide programs, Firewise USA and Fire Risk Reduction Communities as small as 8 dwelling units or as big as 2,500 can create an action plan and start being safer together.

An important document to review as it relates to this measure and goes into great detail about the process CDI went through to create the Safer from Wildfire framework. Wildfire Mitigation Partnership Summary Document (ca.gov)

1. Building materials listing: According to the State Fire Marshal's Building Materials Listing Program (BML) was initially established to mandate approval and listing of fire alarm systems and devices before their sale or marketing in the state. Over time, it expanded to include various materials, such as roof coverings, wall assemblies, hardware, and more. Product approval involves rigorous testing, and companies must utilize SFM accredited laboratories for testing to list products in California. The SFM listing service provides essential information to building authorities, architects, engineers, contractors, and the fire service. This list is updated every two years.
   
2. California Wildfire Mitigation Program: In 2019, AB 38 (Wood), required Cal OES and Cal FIRE to establish a Joint Powers Authority (JPA) to administer the California Wildfire Mitigation Program (CWMP). The purpose of the CWMP is to harden homes and establish defensible space in high risk, socially vulnerable communities; and provide financial assistance for low- and moderate-income households. These efforts encourage cost-effective wildfire resilience and hazard mitigation measures to create fire-resistant homes, businesses, public buildings, and public spaces.
3. Recommended committee amendments:

• On page 6, line 24, delete “January 1, 2026” and insert “December 31, 2027”
• On page 6, line 33- delete “in any of the following”
• On page 6 delete lines 34-39
• On page 7 delete lines 1-5 and on line 16, delete “ including all of the following” and delete lines 17-21

REGISTERED SUPPORT / OPPOSITION:

Support

North American Insulation Manufacturers Association

Opposition

American Property Casualty Insurance Association

National Association of Mutual Insurance Companies

Pacific Association of Domestic Insurance Companies

Personal Insurance Federation of California

Analysis Prepared by: Kathleen O'Malley / INS. / (916) 319-2086