AB 69: FAIR Plan policy notices and renewals.
- Session Year: 2025-2026
- House: Assembly
- Latest Version Date: 2026-09-27
Current Status:
Passed
(2026-09-27: Chaptered by Secretary of State - Chapter 496, Statutes of 2026.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
What does this bill do?
The bill lets the California FAIR Plan share FAIR Plan policyholder and agent contact information with insurers that join its homeowners and commercial “clearinghouse,” so those insurers can offer private policies and must send any offer at the same time to the listed agent or broker and to the policyholder. It requires agents and brokers transacting basic property insurance to tell people about the clearinghouse, help them apply, and complete a department‑approved FAIR Plan training, and it requires the FAIR Plan to give a bold, standalone annual notice telling policyholders they can shop and to contact their broker. Participating insurers must report quarterly how many FAIR Plan policyholders they move to private policies, and the FAIR Plan must post aggregated results and a quarterly list of participating insurers online.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
On and after January 1, 2028, this bill would authorize the association to share policyholder information with insurers participating in the clearinghouse program, as specified, to allow a participating insurer to offer a policy to a FAIR Plan policyholder and, if there is an agent or broker of record listed on the policy, would require the insurer to make the offer simultaneously to the agent or broker of record and the FAIR Plan policyholder. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
This bill would incorporate additional changes to Section 10095 of the Insurance Code proposed by AB 1680 to be operative only if this bill and AB 1680 are enacted and this bill is enacted last.
This bill would incorporate additional changes to Section 10095.5 of the Insurance Code proposed by AB 2061 to be operative only if this bill and AB 2061 are enacted and this bill is enacted last.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
On and after January 1, 2028, this bill would authorize the association to share policyholder information with insurers participating in the clearinghouse program, as specified, to allow a participating insurer to offer a policy to a FAIR Plan policyholder and, if there is an agent or broker of record listed on the policy, would require the insurer to make the offer simultaneously to the agent or broker of record and the FAIR Plan policyholder. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
This bill would incorporate additional changes to Section 10095 of the Insurance Code proposed by AB 1680 to be operative only if this bill and AB 1680 are enacted and this bill is enacted last.
This bill would incorporate additional changes to Section 10095.5 of the Insurance Code proposed by AB 2061 to be operative only if this bill and AB 2061 are enacted and this bill is enacted last.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
On and after January 1, 2028, this bill would authorize the association to share policyholder information with insurers participating in the clearinghouse program, as specified, to allow a participating insurer to offer a policy to a FAIR Plan policyholder and, if there is an agent or broker of record listed on the policy, would require the insurer to make the offer simultaneously to the agent or broker of record and the FAIR Plan policyholder. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
This bill would incorporate additional changes to Section 10095 of the Insurance Code proposed by AB 1680 to be operative only if this bill and AB 1680 are enacted and this bill is enacted last.
This bill would incorporate additional changes to Section 10095.5 of the Insurance Code proposed by AB 2061 to be operative only if this bill and AB 2061 are enacted and this bill is enacted last.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
ThisOn and after January 1, 2028, this bill would authorize the association to share policyholder information with insurers participating in the clearinghouse program, as specified, to allow a participating insurer to offer policies a policy to a FAIR Plan policyholder simultaneously with the and, if there is an agent or broker of record listed on the policy, if any. would require the insurer to make the offer simultaneously to the agent or broker of record and the FAIR Plan policyholder. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
This bill would authorize an insurer participating in a clearinghouse program to offer coverage directly to the insured after 3 renewal periods after January 1, 2027. the association to share policyholder information with insurers participating in the clearinghouse program, as specified, to allow a participating insurer to offer policies to a FAIR Plan policyholder simultaneously with the agent or broker of record listed on the policy, if any. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
This bill would authorize an insurer participating in a clearinghouse program to offer coverage directly to the insured after 3 renewal periods after January 1, 2027. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance. The bill would require the association to require registered agents and brokers to complete the associations department-approved training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies. policies, including clearinghouse programs in which a participating insurer offers homeowners or commercial insurance to FAIR Plan policyholders. Existing law requires an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by one of several specified methods, including making an application for insurance through the FAIR Plan.
This bill would authorize an insurer participating in a clearinghouse program to offer coverage directly to the insured after 3 renewal periods after January 1, 2027. Commencing May 1, 2027, the bill would require a participating insurer to report to the association on a quarterly basis the number of policies it has issued to FAIR Plan policyholders. The bill would require the association to report aggregated numbers within 30 days, as specified, and post and quarterly update on its internet website a list of participating insurers in the clearinghouse programs. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal. The bill would require an agent or broker transacting basic property insurance to assist a person in obtaining basic property insurance coverage by providing the person with information on the clearinghouse programs, among other specified assistance.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies.
This bill would require a broker of record to determine if a FAIR Plan policy can be moved to a voluntary market insurance company before the policy is renewed. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies.
This bill would require a broker of record to determine if a FAIR Plan policy can be moved to a voluntary market insurance company before the policy is renewed. The bill would require the association to provide all policyholders with a notice regarding their coverage options at least annually, including with the initial policy issuance and upon each renewal.
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to implement programs to help reduce the number of existing FAIR Plan policies.
This bill would require a broker of record to determine if a FAIR Plan policy can be moved to a voluntary market insurance company before the policy is renewed.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 1.5.Section 10095 of the Insurance Code is amended to read:10095.(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)(1)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to prior approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or their designee, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. The association shall take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in the report of examination or any other operational report conducted pursuant to this section. If the association fails to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee, the association shall be subject to a penalty of not more than twenty thousand dollars ($20,000) for each failure to take corrective action. These penalties may be in addition to any other penalties provided by law.
(2)The association may request additional extensions of 30 calendar days or other greater extensions approved by the commissioner, for good cause, in order to comply. The commissioner or their designee may deny a request for an extension of time if it is determined the request is not made in good faith or there has not been a good faith effort to comply. For purposes of this subdivision, good cause shall include circumstances beyond the associations control, a showing that the association has made a good faith effort to comply, or other factors agreed to by the commissioner.
(3)For purposes of this subdivision, a failure to take corrective action shall be determined per specific category of corrective action requested as described in the examination.
(h)An insurer member of the association shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the association established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 3.5.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 10095 of the Insurance Code proposed by both this bill and Assembly Bill 1680. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 1680, in which case Section 1 of this bill shall not become operative.
SEC. 5.Section 3.5 of this bill incorporates amendments to Section 10095.5 of the Insurance Code proposed by both this bill and Assembly Bill 2061. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095.5 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 2061, in which case Section 3 of this bill shall not become operative.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 1.5.Section 10095 of the Insurance Code is amended to read:10095.(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)(1)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to prior approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or their designee, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. The association shall take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in the report of examination or any other operational report conducted pursuant to this section. If the association fails to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee, the association shall be subject to a penalty of not more than twenty thousand dollars ($20,000) for each failure to take corrective action. These penalties may be in addition to any other penalties provided by law.
(2)The association may request additional extensions of 30 calendar days or other greater extensions approved by the commissioner, for good cause, in order to comply. The commissioner or their designee may deny a request for an extension of time if it is determined the request is not made in good faith or there has not been a good faith effort to comply. For purposes of this subdivision, good cause shall include circumstances beyond the associations control, a showing that the association has made a good faith effort to comply, or other factors agreed to by the commissioner.
(3)For purposes of this subdivision, a failure to take corrective action shall be determined per specific category of corrective action requested as described in the examination.
(h)An insurer member of the association shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the association established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 3.5.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 10095 of the Insurance Code proposed by both this bill and Assembly Bill 1680. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 1680, in which case Section 1 of this bill shall not become operative.
SEC. 5.Section 3.5 of this bill incorporates amendments to Section 10095.5 of the Insurance Code proposed by both this bill and Assembly Bill 2061. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095.5 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 2061, in which case Section 3 of this bill shall not become operative.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 1.5.Section 10095 of the Insurance Code is amended to read:10095.(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)(1)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to prior approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, their designee, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. The association shall take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in the report of examination or any other operational report conducted pursuant to this section. If the association fails to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee, the association shall be subject to a penalty of not more than twenty thousand dollars ($20,000) for each failure to take corrective action. These penalties may be in addition to any other penalties provided by law.
(2)The association may request additional extensions of 30 calendar days or other greater extensions approved by the commissioner, for good cause, in order to comply. The commissioner or their designee may deny a request for an extension of time if it is determined the request is not made in good faith or there has not been a good faith effort to comply. For purposes of this subdivision, good cause shall include circumstances beyond the associations control, a showing that the association has made a good faith effort to comply, or other factors agreed to by the commissioner.
(3)For purposes of this subdivision, a failure to take corrective action shall be determined per specific category of corrective action requested as described in the examination.
(h)An insurer member of the plan association shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan association established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policy to a FAIR Plan policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 3.5.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an Internet Web site internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and Internet Web site internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking his or her the agents or brokers help in obtaining basic property insurance coverage by any one of the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans Internet Web site internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
SEC. 4.Section 1.5 of this bill incorporates amendments to Section 10095 of the Insurance Code proposed by both this bill and Assembly Bill 1680. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 1680, in which case Section 1 of this bill shall not become operative.
SEC. 5.Section 3.5 of this bill incorporates amendments to Section 10095.5 of the Insurance Code proposed by both this bill and Assembly Bill 2061. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2027, (2) each bill amends Section 10095.5 of the Insurance Code, and (3) this bill is enacted after Assembly Bill 2061, in which case Section 3 of this bill shall not become operative.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)(1)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a homeowners insurance policies policy to a FAIR Plan policyholder simultaneously with the agent or broker of record listed on the policy, if any. policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(j)(1)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To
(2)On and after January 1, 2028, to increase availability of consumer choice, the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer a commercial insurance policies policy to a FAIR Plan policyholder simultaneously with the agent or broker of record listed on the policy, if any. policyholder. If there is an agent or broker of record listed on the policy, an insurer shall make an offer simultaneously to the agent or broker of record and the FAIR Plan policyholder.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured. the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer homeowners insurance policies to a FAIR Plan policyholder simultaneously with the agent or broker of record listed on the policy, if any.
(j)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured. the association may share with those insurers participating in the clearinghouse program relevant policyholder information, including any agent or broker of record listed on the policy, that allows a participating insurer to offer commercial insurance policies to a FAIR Plan policyholder simultaneously with the agent or broker of record listed on the policy, if any.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)(1)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(2)The association shall require registered agents and brokers to complete the associations department-approved Brokers and FAIR Plan course, which provides training on the associations and the brokers responsibility to advise policyholders on the voluntary market options.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured.
(j)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking the agents or brokers help in obtaining basic property insurance coverage by the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
(a)Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioners review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.
(b)The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.
(c)Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.
(d)The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurers premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.
(e)The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.
(f)The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.
(g)The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof.
(h)An insurer member of the plan shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.
(i)To reduce the associations concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners insurance through the policys listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured.
(j)To reduce the associations concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policys listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option. To increase availability of consumer choice, after three renewal periods after January 1, 2027, an admitted or nonadmitted insurer may offer coverage directly to the insured.
(k)(1)With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).
(2)The association shall provide all policyholders with notice of each of the following:
(A)The manner in which the association shall share policyholders personal information to facilitate offers of private insurance through the clearinghouse programs.
(B)A method to opt out of the sharing of policyholders personal information in connection with the clearinghouse programs.
(l)Commencing May 1, 2027, every admitted and nonadmitted insurer that participates in the clearinghouse programs referenced in subdivisions (i) and (j) shall report to the association on a quarterly basis the number of policies it has issued to policyholders in the association as a result of that participation. The association shall report aggregated numbers within 30 days to the commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on the associations public internet website.
SECTION 1.SEC. 2.Section 10095.2 is added to the Insurance Code, to read:10095.2.(a)The association shall provide all policyholders with a notice that includes the following in 14-point boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 3.Section 10095.5 of the Insurance Code is amended to read:10095.5.(a)The association shall establish and maintain an Internet Web site internet website and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and Internet Web site internet website address on all communications with an applicant or insured.
(b)An insurance agent or broker transacting basic property insurance shall assist a person seeking his or her the agents or brokers help in obtaining basic property insurance coverage by any one of the following methods:
(1)Making an application for insurance through the plan by submitting an application at the persons request.
(2)Providing the person with the California FAIR Plans Internet Web site internet website address and the toll-free telephone number.
(3)Making an application for insurance, at the persons request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(4)Providing the person with information on the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095.
(c)The association shall post on its internet website a list of admitted and nonadmitted insurers that participate in the clearinghouse programs referenced in subdivisions (i) and (j) of Section 10095 and shall update the list quarterly.
(a)The association shall provide all policyholders with a notice that includes the following in 14-point bold font: boldface type:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SEC. 2.Section 10095.3 is added to the Insurance Code, to read:10095.3.(a)Before the renewal of an insurance policy that has been placed in the FAIR Plan, the broker of record shall determine if the policy can be moved to a voluntary market insurance company.(b)For purposes of this section, determine means the broker of record utilizing their knowledge of the voluntary market for property insurance gained from actively placing, or attempting to place, the same or similar type of insurance.(a)The association shall provide all policyholders with a notice that includes the following in 14-point bold font:
IMPORTANT NOTICE:
CONTACT YOUR BROKER TO SEE IF OTHER COVERAGE IS AVAILABLE.
YOU HAVE THE RIGHT TO SHOP AROUND.
The insurance marketplace changes regularly, so the FAIR Plan may not be your only option.
ASK YOUR BROKER TO HELP GUIDE YOU IN FINDING THE MOST SUITABLE AVAILABLE INSURANCE OPTIONS FOR YOU.
Use the California Department of Insurance Home Insurance Finder as a resource, an online tool that can assist you in obtaining insurance for your home.
(b)The notice required pursuant to subdivision (a) shall be provided at least annually, including with the initial policy issuance and upon each renewal, and shall be on a separate page from any other notice, information, or disclosure.
SECTION 1.SEC. 2.Section 10095.3 is added to the Insurance Code, to read:10095.3.(a)Before the renewal of an insurance policy that has been placed in the FAIR Plan, the broker of record shall determine if the policy can be moved to a voluntary market insurance company.
(b)For purposes of this section, determine means the broker of record utilizing their knowledge of the voluntary market for property insurance gained from actively placing, or attempting to place, the same or similar type of insurance.
(a)Before the renewal of an insurance policy that has been placed in the FAIR Plan, the broker of record shall determine if the policy can be moved to a voluntary market insurance company.
(b)For purposes of this section, determine means the broker of record utilizing their knowledge of the voluntary market for property insurance gained from actively placing, or attempting to place, the same or similar type of insurance.
|
Date
|
Status
|
|---|---|
| Sep 27, 2026 | Chaptered by Secretary of State - Chapter 496, Statutes of 2026. |
| Sep 27, 2026 | Approved by the Governor. |
| Sep 9, 2026 | Enrolled and presented to the Governor at 1 p.m. |
| Aug 30, 2026 | In Assembly. Concurrence in Senate amendments pending. |
| Aug 30, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 30, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 6928.). |
| Aug 30, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0.). |
| Aug 30, 2026 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0.). |
| Aug 30, 2026 | Ordered to special consent calendar. |
| Aug 18, 2026 | Read second time. Ordered to third reading. |
| Aug 17, 2026 | Read third time and amended. Ordered to second reading. |
| Aug 17, 2026 | Read second time. Ordered to third reading. |
| Aug 13, 2026 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Aug 10, 2026 | In committee: Hearing postponed by committee. |
| Jul 29, 2026 | In committee: Hearing postponed by committee. |
| Jun 25, 2026 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 24). Re-referred to Com. on APPR. |
| Jun 22, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| Jun 17, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| Jun 15, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| May 22, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| Sep 11, 2025 | Senate Rule 29.3(b) suspended. (Ayes 30. Noes 10. Page 2934.) |
| Sep 11, 2025 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| Jun 23, 2025 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jun 18, 2025 | Referred to Com. on INS. |
| Jun 9, 2025 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 5, 2025 | Read third time. Passed. Ordered to the Senate. (Ayes 78. Noes 0. Page 2104.) |
| Jun 2, 2025 | Read third time and amended. Ordered to third reading. (Page 1951.) |
| May 27, 2025 | Read second time. Ordered to third reading. |
| May 23, 2025 | From committee: Do pass. (Ayes 14. Noes 0.) (May 23). |
| Apr 23, 2025 | In committee: Set, first hearing. Referred to suspense file. |
| Apr 2, 2025 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 17. Noes 0.) (April 2). Re-referred to Com. on APPR. |
| Feb 3, 2025 | Referred to Com. on INS. |
| Jan 6, 2025 | Read first time. |
| Dec 11, 2024 | From printer. May be heard in committee January 10. |
| Dec 10, 2024 | Introduced. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 30, 2026 | AB 69 Calderon Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 30, 2026 | Assembly 3rd Reading AB69 Calderon et al. By Padilla | Senate Floor |
Passed |
|
| Jun 24, 2026 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Insurance |
Passed |
|
| Jun 5, 2025 | AB 69 Calderon Assembly Third Reading | Assembly Floor |
Passed |
|
| May 23, 2025 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 2, 2025 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Apartment Association | ** Support | |
| California Association Of Realtors | ** Support | |
| California Building Industry Association | ** Support | |
| California Department of Insurance | ** Support | |
| California Fair Plan Association | ** Support | |
| City of Emeryville | ** Support | |
| Community Associations Institute - California Legislative Action Committee | ** Support | |
| Emeryville; City Of | ** Support | |
| Independent Insurance Agents & Brokers of California, Inc. | ** Support | |
| Insurance Commissioner Ricardo Lara / California Department of Insurance | ** Support | |
| Orange County Business Council | ** Support | |
| surplus line association of california | ** Support | |
| Surplus Line Association Of California The | ** Support |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 69
Author:(Calderon)
As Amended Ver:August 17, 2026
Majority vote
SUMMARY
- Provides that commencing January 1, 2028, the FAIR Plan to share its policyholder information with insurers participating in its clearinghouse programs, with the goal of allowing such an insurer to offer their policies to FAIR Plan policyholders, enabling them to find insurance in the admitted market.
- Requires under the provisions above, that if there is an agent or broker of record listed on a FAIR Plan policy, the interested insurer must make such a coverage offer simultaneously to both the FAIR Plan policyholder as well as the affiliated agent or broker of record.
- Requires, beginning May 1, 2027, every admitted and non-admitted insurer that participates in the FAIR Plan clearinghouse programs to report to the FAIR Plan on a quarterly basis the number of policies the insurer has issued to its policyholders. The FAIR Plan must then report aggregated numbers within 30 days to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on its website.
- States the FAIR Plan must provide its policyholders with annual notice, as specified, that policyholders should consider contacting their broker to determine if other coverage is available.
- Specifies that the FAIR Plan must require registered agents and brokers to complete its Brokers and FAIR Plan course, which provides training on the FAIR Plan's and the broker's responsibility to advise policyholders on the voluntary market options.
- Adds that an agent or broker must assist a person seeking their help in obtaining basic property insurance coverage by providing information on the FAIR Plan's clearinghouse programs.
- Requires that the FAIR Plan must post a list of admitted and nonadmitted insurers that participate in its clearinghouse programs on its website, and update that list quarterly.
- Includes provisions to address chaptering issues with AB 1680 (Calderon, 2026) and AB 2061 (Chen, 2026).
Senate Amendments
- Add provisions to address chaptering issues with AB 1680 (Calderon, 2026) and AB 2061 (Chen, 2026).
- Require, beginning May 1, 2027, every admitted and non-admitted insurer that participates in the FAIR Plan clearinghouse programs to report to the FAIR Plan on a quarterly basis the number of policies the insurer has issued to its policyholders. The FAIR Plan must then report aggregated numbers within 30 days to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on its website.
- Provides that commencing January 1, 2028, the FAIR Plan to share its policyholder information with insurers participating in its clearinghouse programs, with the goal of allowing such an insurer to offer their policies to FAIR Plan policyholders, enabling them to find insurance in the admitted market.
- Require under the provisions above, that if there is an agent or broker of record listed on a FAIR Plan policy, the interested insurer must make such a coverage offer simultaneously to both the FAIR Plan policyholder as well as the affiliated agent or broker of record.
- Specify that the FAIR Plan must require registered agents and brokers to complete its Brokers and FAIR Plan course, which provides training on the FAIR Plan's and the broker's responsibility to advise policyholders on the voluntary market options.
- Add that an agent or broker must assist a person seeking their help in obtaining basic property insurance coverage by providing information on the FAIR Plan's clearinghouse programs.
- Require that the FAIR Plan must post a list of admitted and nonadmitted insurers that participate in its clearinghouse programs on its website, and update that list quarterly.
COMMENTS
This measure is the result of the Assembly Insurance Committee's Outcome Reviews Hearing held on March 18, 2026. This hearing evaluated the FAIR Plan clearinghouse program and identified shortcomings. AB 69 addresses the shortcomings by requiring more consumer transparency, more reporting and a clearer path for FAIR Plan policyholders to have access to the admitted market.
The California FAIR Plan is an association of all insurance companies licensed by CDI that provide basic property and casualty insurance in California. It was created in response to urban disturbances, notably the Watts Riots in Los Angeles. The purpose of the FAIR Plan is to provide "basic" property insurance in the event of a market failure. At inception, that was essentially urban commercial property. Ultimately, it has expanded to include homeowners' insurance anywhere in the state, provided that such insurance "cannot be obtained" in the normal manner in the market.
The FAIR Plan was established to ensure that urban property owners, mostly businesses, would have "fair access" to the property insurance necessary to continue to operate in a market that insurers viewed as too risky to cover. That risk evaluation resulted in a substantial market withdrawal by insurers from the urban property market. Despite its initial creation as an urban/business "insurer of last resort," the FAIR Plan expanded to provide coverage in "designated" brush fire regions of the state. It operated fairly well in this manner until the mid-1990's, when, as a consequence of the genuine homeowners' insurance crisis that followed the Northridge earthquake in 1994, the entire state was designated as the appropriate FAIR Plan coverage region.
FAIR Plan policies are capped at limits of $3.3 million for residential properties, and $20 million per structure (up to $100 million) for commercial properties. These caps were increased by the Insurance Commissioner in 2020 for residential and 2023 for commercial. Commercial went from $8.4 million per location in 2021, to $20 million per location in 2023, to $20 million per structure with a $100 million max, finalized in July 2025 and set to sunset in 2028.
FAIR Plan residential dwelling policies now cover manufactured homes and mobile homes. FAIR Plan commercial policies can also cover homeowners' associations, condo associations, farms, and businesses.
By statute, the FAIR Plan policy is not as broad as traditional homeowners' policies. Nonetheless, it is a fully sound and guaranteed policy that satisfies lenders' security requirements and protects the property against the primary risk factor faced by homeowners: [wild]fire. Other coverages should be readily available in the market (typically through the purchase of a "difference-in-conditions" or "DIC" policy), which provide wraparound coverage that, coupled with a FAIR Plan policy, results in the same protection provided by a standard homeowner's policy.
According to the FAIR Plan, as of June 2026, the FAIR Plan's total exposure in California is $768 billion and as of June, 2026, the FAIR Plan's policies in force reached 696,562. The FAIR Plan updates these statistics quarterly, on their website.
According to the Author
According to the author, "Depopulation of California's FAIR Plan is a top priority. As the insurance market begins to stabilize we need to ensure a clear path is accessible for those policyholders who are candidates for the voluntary market, where insurance is more affordable and polices cover more. This measure adds an additional forethought to a broker of record prior to renewing any policyholders in the FAIR Plan."
Arguments in Support
According to the California Department of Insurance, "The clearinghouse can only work if insurers have a way to identify consumers and make coverage offers. AB 69 would make it easier for FAIR Plan policyholders to learn about coverage options in the voluntary market. The Clearinghouse program was created to help move consumers from the FAIR Plan back to private insurers, but current law limits participating insurers to contacting only the policyholder's agent or broker of record. AB 69 would allow participating insurers to contact FAIR Plan policyholders directly through the Clearinghouse while simultaneously making an offer to the agent or broker of record, if any. Consumers would still decide whether to remain with the FAIR Plan or accept another available policy.
The bill also supports the broader efforts of my Sustainable Insurance Strategy (SIS) to reduce the number of policyholders relying on the FAIR Plan. Current restrictions have limited the Clearinghouse's ability to connect consumers with other coverage options, including interest previously expressed by surplus lines insurers seeking to participate in depopulation efforts. Allowing more direct contact could make the Clearinghouse"
Arguments in Opposition
None on file.
FISCAL COMMENTS
The Senate Appropriations Committee identified this measure as a 28.8 candidate.
VOTES:
ASM INSURANCE: 17-0-0
YES: Calderon, Wallis, Addis, Alvarez, Ávila Farías, Berman, Chen, Ellis, Gipson, Hadwick, Harabedian, Krell, Nguyen, Ortega, Petrie-Norris, Michelle Rodriguez, Valencia
ASM APPROPRIATIONS: 14-0-1
YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa
ABS, ABST OR NV: Sanchez
ASSEMBLY FLOOR: 78-0-1
YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
ABS, ABST OR NV: Ortega
UPDATED
VERSION: August 17, 2026
CONSULTANT: Kathleen O'Malley / INS. / (916) 319-2086 FN: 0004295
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 69 |
THIRD READING
Bill No: AB 69
Author: Calderon (D)
Amended: 8/17/26 in Senate
Vote: 21
SENATE INSURANCE COMMITTEE: 6-0, 6/24/26
AYES: Padilla, Niello, Becker, Menjivar, Richardson, Rubio
NO VOTE RECORDED: Jones
ASSEMBLY FLOOR: 78-0, 6/5/25 - See last page for vote
SUBJECT: FAIR Plan policy notices and renewals
SOURCE: Author
DIGEST:
This bill enacts various provisions to assist California Fair Access to Insurance Requirements Plan Association (FAIR Plan) policyholders in securing coverage outside of the FAIR Plan. These provisions include providing policyholder information to interested insurers and agents or brokers of record simultaneously, while also making policyholders aware of additional coverage options.
Senate Floor Amendments of 8/17/26 address chaptering concerns, add coauthors and make minor technical changes.
ANALYSIS:
Existing law:
- Establishes the FAIR Plan to assure the stability of the property insurance market, to assure the availability of basic property insurance, as defined, to encourage maximum use of the normal insurance market in obtaining basic property insurance provided by admitted insurers and licensed surplus line brokers.
- Provides, as part of the FAIR Plan, for the equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market.
- Specifies that rates for the FAIR Plan shall not be excessive, inadequate, or unfairly discriminatory, shall be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and shall reflect investment income of the plan.
- Requires the FAIR Plan to develop and implement a residential clearinghouse program and a commercial clearinghouse program.
This bill:
- Allows, commencing January 1, 2028, the FAIR Plan to share its policyholder information with insurers participating in its clearinghouse programs, with the goal of allowing such an insurer to offer their policies to FAIR Plan policyholders, enabling them to find insurance in the admitted market.
- Requires under the provisions above, that if there is an agent or broker of record listed on a FAIR Plan policy, the interested insurer must make such a coverage offer simultaneously to both the FAIR Plan policyholder as well as the affiliated agent or broker of record.
- Requires, beginning May 1, 2027, every admitted and non-admitted insurer that participates in the FAIR Plan clearinghouse programs to report to the FAIR Plan on a quarterly basis the number of policies the insurer has issued to its policyholders. The FAIR Plan must then report aggregated numbers within 30 days to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on its website.
- States the FAIR Plan must provide its policyholders with annual notice, as specified, that policyholders should consider contacting their broker to determine if other coverage is available.
- Specifies that the FAIR Plan must require registered agents and brokers to complete its Brokers and FAIR Plan course, which provides training on the FAIR Plan’s and the broker’s responsibility to advise policyholders on the voluntary market options.
- Adds the requirement that an agent or broker must assist a person seeking their help in obtaining basic property insurance coverage by providing information on the FAIR Plan’s clearinghouse programs.
- Requires that the FAIR Plan must post a list of admitted and nonadmitted insurers that participate in its clearinghouse programs on its website, and update that list quarterly.
- Includes provisions to address chaptering issues with AB 1680 (Calderon, 2026) and AB 2061 (Chen, 2026).
Related/Prior Legislation
AB 1680 (Calderon, 2026). Creates greater ability for the California Department of Insurance to ensure accountability and coverage options in the FAIR Plan. Pending on the Senate Floor.
AB 226 (Calderon, Chapter 473, Statutes of 2025). Authorized the California Infrastructure and Economic Development Bank (IBank), upon the request of the California Fair Access to Insurance Requirements Plan Association (FAIR Plan) to issue bonds to finance the costs of claims, to increase liquidity, and claims-paying capacity of the FAIR Plan, and to refund bonds previously issued for that purpose. Required the FAIR Plan, with the approval of the Insurance Commissioner, to assess all members to pay all loan payments and the costs and expenses relating to a loan agreement with IBank, as well as to assess all members to repay a line of credit and its related costs and expenses.
AB 2260 (Calderon, 2024). Would have required the FAIR Plan, until December 31, 2027, to quarterly provide specified information about policies and clearinghouse program progress to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and to post the information on the association’s public internet website. The bill would have also required the broker of record of an insurance policy that has been placed in the FAIR Plan to determine, prior to the renewal of the policy, whether the policy can be moved to a voluntary market insurance company. Not heard in Senate Insurance Committee.
SB 505 (Rubio, Chapter 180, Statutes of 2023). Required, by July 1, 2024, the FAIR Plan to establish a clearinghouse program for commercial insurance policies.
AB 3012 (Wood and Daly, Chapter 258, Statutes of 2020). Directed the Fair Plan to implement a clearinghouse program whereby property insurers will be provided information about FAIR Plan policies, for the purpose of encouraging those insurers to offer regular private insurance to FAIR Plan policyholders.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/13/26)
Insurance Commissioner Ricardo Lara / California Department of Insurance California Apartment Association
California Building Industry Association
California FAIR Plan Association
Community Associations Institute - California Legislative Action Committee
Emeryville; City of
Orange County Business Council
Surplus Line Association of California
OPPOSITION: (Verified 8/13/26)
None received
ARGUMENTS IN SUPPORT:
The California Apartment Association states:
“The California FAIR Plan was created in 1968, with the purpose to be the “insurer of last resort” for “basic” property insurance in the event of a market failure. At its inception, it was essentially for urban commercial property. Ultimately, it has expanded to include residential insurance anywhere in the state, provided that the insurance “cannot be obtained” in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the market. Under the current climate of the California insurance market, the FAIR Plan is under pressure as the “take-all” insurer of last resort. AB 69’s goal is to make sure that once policies are part of the FAIR Plan they don’t stay there if, and only and if, they can transition to a market plan. This will help maintain the solvency of the FAIR Plan – which is a critical step to stabilizes the state’s insurance market.”
ASSEMBLY FLOOR: 78-0, 6/5/25
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
NO VOTE RECORDED: Ortega
Prepared by: Brandon Seto / INS. / (916) 651-4110
8/18/26 16:10:22
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-4171 | AB 69 |
THIRD READING
Bill No: AB 69
Author: Calderon (D)
Amended: 6/22/26 in Senate
Vote: 21
SENATE INSURANCE COMMITTEE: 6-0, 6/24/26
AYES: Padilla, Niello, Becker, Menjivar, Richardson, Rubio
NO VOTE RECORDED: Jones
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 78-0, 6/5/25 - See last page for vote
SUBJECT: FAIR Plan policy notices and renewals
SOURCE: Author
DIGEST:
This bill enacts various provisions to assist California Fair Access to Insurance Requirements Plan Association (FAIR Plan) policyholders in securing coverage outside of the FAIR Plan. These provisions include providing policyholder information to interested insurers and agents or brokers of record simultaneously, while also making policyholders aware of additional coverage options.
ANALYSIS:
Existing law:
- Establishes the FAIR Plan to assure the stability of the property insurance market, to assure the availability of basic property insurance, as defined, to encourage maximum use of the normal insurance market in obtaining basic property insurance provided by admitted insurers and licensed surplus line brokers.
- Provides, as part of the FAIR Plan, for the equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market.
- Specifies that rates for the FAIR Plan shall not be excessive, inadequate, or unfairly discriminatory, shall be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and shall reflect investment income of the plan.
- Requires the FAIR Plan to develop and implement a residential clearinghouse program and a commercial clearinghouse program.
This bill:
- Allows, commencing January 1, 2028, the FAIR Plan to share its policyholder information with insurers participating in its clearinghouse programs, with the goal of allowing such an insurer to offer their policies to FAIR Plan policyholders, enabling them to find insurance in the admitted market.
- Requires under the provisions above, that if there is an agent or broker of record listed on a FAIR Plan policy, the interested insurer must make such a coverage offer simultaneously to both the FAIR Plan policyholder as well as the affiliated agent or broker of record.
- Requires, beginning May 1, 2027, every admitted and non-admitted insurer that participates in the FAIR Plan clearinghouse programs to report to the FAIR Plan on a quarterly basis the number of policies the insurer has issued to its policyholders. The FAIR Plan must then report aggregated numbers within 30 days to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on its website.
- States the FAIR Plan must provide its policyholders with annual notice, as specified, that policyholders should consider contacting their broker to determine if other coverage is available.
- Specifies that the FAIR Plan must require registered agents and brokers to complete its Brokers and FAIR Plan course, which provides training on the FAIR Plan’s and the broker’s responsibility to advise policyholders on the voluntary market options.
- Adds the requirement that an agent or broker must assist a person seeking their help in obtaining basic property insurance coverage by providing information on the FAIR Plan’s clearinghouse programs.
- Requires that the FAIR Plan must post a list of admitted and nonadmitted insurers that participate in its clearinghouse programs on its website, and update that list quarterly.
Related/Prior Legislation
AB 1680 (Calderon). Creates greater ability for the California Department of Insurance to ensure accountability and coverage options in the FAIR Plan. Pending on the Senate Floor.
AB 226 (Calderon, Chapter 473, Statutes of 2025). Authorized the California Infrastructure and Economic Development Bank (IBank), upon the request of the California Fair Access to Insurance Requirements Plan Association (FAIR Plan) to issue bonds to finance the costs of claims, to increase liquidity, and claims-paying capacity of the FAIR Plan, and to refund bonds previously issued for that purpose. Required the FAIR Plan, with the approval of the Insurance Commissioner, to assess all members to pay all loan payments and the costs and expenses relating to a loan agreement with IBank, as well as to assess all members to repay a line of credit and its related costs and expenses.
AB 2260 (Calderon, 2024). Would have required the FAIR Plan, until December 31, 2027, to quarterly provide specified information about policies and clearinghouse program progress to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and to post the information on the association’s public internet website. The bill would have also required the broker of record of an insurance policy that has been placed in the FAIR Plan to determine, prior to the renewal of the policy, whether the policy can be moved to a voluntary market insurance company. Not heard in Senate Insurance Committee.
SB 505 (Rubio, Chapter 180, Statutes of 2023). Required, by July 1, 2024, the FAIR Plan to establish a clearinghouse program for commercial insurance policies.
AB 3012 (Wood and Daly, Chapter 258, Statutes of 2020). Directed the Fair Plan to implement a clearinghouse program whereby property insurers will be provided information about FAIR Plan policies, for the purpose of encouraging those insurers to offer regular private insurance to FAIR Plan policyholders.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/13/26)
Insurance Commissioner Ricardo Lara / California Department of Insurance California Apartment Association
California Building Industry Association
California FAIR Plan Association
Community Associations Institute - California Legislative Action Committee
Emeryville; City of
Orange County Business Council
Surplus Line Association of California
OPPOSITION: (Verified 8/13/26)
None received
ARGUMENTS IN SUPPORT:
The California Apartment Association states:
“The California FAIR Plan was created in 1968, with the purpose to be the “insurer of last resort” for “basic” property insurance in the event of a market failure. At its inception, it was essentially for urban commercial property. Ultimately, it has expanded to include residential insurance anywhere in the state, provided that the insurance “cannot be obtained” in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the market. Under the current climate of the California insurance market, the FAIR Plan is under pressure as the “take-all” insurer of last resort. AB 69’s goal is to make sure that once policies are part of the FAIR Plan they don’t stay there if, and only and if, they can transition to a market plan. This will help maintain the solvency of the FAIR Plan – which is a critical step to stabilizes the state’s insurance market.”
ASSEMBLY FLOOR: 78-0, 6/5/25
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
NO VOTE RECORDED: Ortega
Prepared by: Brandon Seto / INS. / (916) 651-4110
8/17/26 9:15:31
**** END ****
SENATE COMMITTEE ON INSURANCE
Senator Stephen Padilla, Chair
2025 - 2026 Regular
Bill No: AB 69 Hearing Date: June 24, 2026
Author: | Calderon | ||
Version: | June 22, 2026 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Brandon Seto | ||
SUBJECT: FAIR Plan policy notices and renewals
DIGEST:
Enacts various provisions to assist California Fair Access to Insurance Requirements Plan Association (FAIR Plan) policyholders in securing coverage outside of the FAIR Plan. These provisions include providing policyholder information to interested insurers and agents or brokers of record simultaneously, while also making policyholders aware of additional coverage options.
ANALYSIS:
Existing law:
- Establishes the FAIR Plan to assure the stability of the property insurance market, to assure the availability of basic property insurance, as defined, to encourage maximum use of the normal insurance market in obtaining basic property insurance provided by admitted insurers and licensed surplus line brokers.
- Provides, as part of the FAIR Plan, for the equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market.
- Specifies that rates for the FAIR Plan shall not be excessive, inadequate, or unfairly discriminatory, shall be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and shall reflect investment income of the plan.
- Requires the FAIR Plan to develop and implement a residential clearinghouse program and a commercial clearinghouse program.
This bill:
- Allows, commencing January 1, 2028, the FAIR Plan to share its policyholder information with insurers participating in its clearinghouse programs, with the goal of allowing such an insurer to offer their policies to FAIR Plan policyholders, enabling them to find insurance in the admitted market.
- Requires under the provisions above, that if there is an agent or broker of record listed on a FAIR Plan policy, the interested insurer must make such a coverage offer simultaneously to both the FAIR Plan policyholder as well as the affiliated agent or broker of record.
- Requires, beginning May 1, 2027, every admitted and non-admitted insurer that participates in the FAIR Plan clearinghouse programs to report to the FAIR Plan on a quarterly basis the number of policies the insurer has issued to its policyholders. The FAIR Plan must then report aggregated numbers within 30 days to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and post the aggregated numbers on its website.
- States the FAIR Plan must provide its policyholders with annual notice, as specified, that policyholders should consider contacting their broker to determine if other coverage is available.
- Specifies that the FAIR Plan must require registered agents and brokers to complete its Brokers and FAIR Plan course, which provides training on the FAIR Plan’s and the broker’s responsibility to advise policyholders on the voluntary market options.
- Adds the requirement that an agent or broker must assist a person seeking their help in obtaining basic property insurance coverage by providing information on the FAIR Plan’s clearinghouse programs.
- Requires that the FAIR Plan must post a list of admitted and nonadmitted insurers that participate in its clearinghouse programs on its website, and update that list quarterly.
Background
According to the author:
“Depopulation of California’s FAIR Plan is a top priority. As the insurance market continues to show signs of stabilizing, we need to ensure a clear path is accessible for those FAIR Plan policyholders who are candidates for the voluntary market, where insurance is more affordable and polices cover more. This measure provides better transparency and more consumer choice. Those in the FAIR Plan need a pathway out.”
Related/Prior Legislation
AB 1680 (Calderon). Creates greater ability for the California Department of Insurance to ensure accountability and coverage options in the FAIR Plan. Pending in Senate Insurance Committee.
AB 226 (Calderon, Chapter 473, Statutes of 2025). Authorized the California Infrastructure and Economic Development Bank (IBank), upon the request of the California Fair Access to Insurance Requirements Plan Association (FAIR Plan) to issue bonds to finance the costs of claims, to increase liquidity, and claims-paying capacity of the FAIR Plan, and to refund bonds previously issued for that purpose. Required the FAIR Plan, with the approval of the Insurance Commissioner, to assess all members to pay all loan payments and the costs and expenses relating to a loan agreement with IBank, as well as to assess all members to repay a line of credit and its related costs and expenses.
AB 2260 (Calderon, 2024). Would have required the FAIR Plan, until December 31, 2027, to quarterly provide specified information about policies and clearinghouse program progress to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and to post the information on the association’s public internet website. The bill would have also required the broker of record of an insurance policy that has been placed in the FAIR Plan to determine, prior to the renewal of the policy, whether the policy can be moved to a voluntary market insurance company. Not heard in Senate Insurance Committee.
SB 505 (Rubio, Chapter 180, Statutes of 2023). Required, by July 1, 2024, the FAIR Plan to establish a clearinghouse program for commercial insurance policies.
AB 3012 (Wood and Daly, Chapter 258, Statutes of 2020). Directed the Fair Plan to implement a clearinghouse program whereby property insurers will be provided information about FAIR Plan policies, for the purpose of encouraging those insurers to offer regular private insurance to FAIR Plan policyholders.
ARGUMENTS IN SUPPORT:
The California Apartment Association states:
“The California FAIR Plan was created in 1968, with the purpose to be the “insurer of last resort” for “basic” property insurance in the event of a market failure. At its inception, it was essentially for urban commercial property. Ultimately, it has expanded to include residential insurance anywhere in the state, provided that the insurance “cannot be obtained” in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the market. Under the current climate of the California insurance market, the FAIR Plan is under pressure as the “take-all” insurer of last resort. AB 69’s goal is to make sure that once policies are part of the FAIR Plan they don’t stay there if, and only and if, they can transition to a market plan. This will help maintain the solvency of the FAIR Plan – which is a critical step to stabilizes the state’s insurance market.”
ARGUMENTS IN OPPOSITION:
None received.
SUPPORT:
California Apartment Association
California Building Industry Association
California Fair Plan Association
Community Associations Institute - California Legislative Action Committee
Emeryville; City of
Orange County Business Council
Surplus Line Association of California
OPPOSITION:
None.
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 69
Author:(Calderon)
As Amended Ver:June 2, 2025
Majority vote
SUMMARY
Makes changes to address the policyholder growth of the Fair Access to Insurance Requirements (FAIR) Plan.
Major Provisions
- Requires a broker of record to determine if a FAIR Plan policy can be moved to the voluntary market before the FAIR Plan policy is renewed.
- Requires the FAIR Plan to provide all policyholders with a notice regarding their coverage options at least annually.
COMMENTS
The California FAIR Plan – "Fair Access to Insurance Requirements" – is an "association" of all insurance companies licensed by the California Department of Insurance (CDI) that provides basic property and casualty insurance in California. It was created in 1968, following urban disturbances from the Watts Riots in Los Angeles.
Simply stated, the purpose of the FAIR Plan is to be the "insurer of last resort" for "basic" property insurance in the event of a market failure. At inception, that was essentially urban commercial property. Ultimately, it has expanded to include homeowners’ insurance anywhere in the state, provided that the insurance "cannot be obtained" in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the admitted market, but that point is now debatable.
The FAIR Plan was established to ensure that urban property owners, mostly businesses, would have "fair access" to the property insurance necessary to continue to operate in a market that insurers viewed as too risky to cover. That risk evaluation resulted in a substantial market withdrawal by insurers from the urban property market. Despite its initial creation as an urban/business "insurer of last resort," the FAIR Plan expanded to provide coverage in "designated" brush fire regions of the state. It operated fairly well in this manner until the mid-1990’s, when, as a consequence of the genuine homeowners’ insurance crisis that followed the Northridge earthquake in 1994, the entire state was designated as the appropriate FAIR Plan coverage region. Today, the FAIR Plan covers all parts of California.
FAIR Plan policies are capped at $3.3 million for residential properties and $20 million per structure for commercial properties. These caps were increased by the Insurance Commissioner in 2020 for residential and 2023 for commercial. Commercial went from $8.4 million per location in 2021, to $20 million per location in 2023, to $20 million per structure subsequently in 2025.
By statute, the FAIR Plan policy is not as broad as traditional homeowners’ policies. It is, nonetheless, a fully sound and guaranteed policy that satisfies lenders’ security requirements and protects the property against the primary risk factor faced by homeowners, which is [wild]fire. Other coverages are readily available in the market (typically through the purchase of a "difference-in-conditions" or "DIC" policy), which provide wraparound coverage that, coupled with a FAIR Plan policy, results in the same protection provided by a standard homeowner’s policy. Because the FAIR Plan’s role is to provide coverage when the regular market won’t, it is not necessarily the role of the FAIR Plan to provide DIC policies when there is a healthy market for those policies.
According to the FAIR Plan, as of March 2025 (FAIR Plan updates quarterly on their website), the FAIR Plan’s total exposure in California is $599 billion, reflecting a 31 % increase since September 2024 and a 259% increase since September 2021.
As of March, 2025, the FAIR Plan’s policies in force reached 573, 739, a 23% increase since September 2024 and a 139% increase since September 2021.
FAIR Plan Residential and Commercial Clearinghouse Programs: A significant provision of the SIS is depopulating the FAIR Plan through the clearinghouse programs.
The FAIR Plan residential clearinghouse program was created in 2021. Statute places the responsibility on the FAIR Plan to develop the clearinghouse program with these goals: reduce the concentration of policies and push the use of the regular insurance market; lower the quantity of policies in the FAIR Plan; and provide the insurers the ability to take on additional business. The intent of the program is to get FAIR Plan policyholders back into the admitted market. The policies in the clearinghouse are initially limited to the admitted market for the first 30 days, at which point nonadmitted insurers may also participate by offering a homeowners policy to someone in the FAIR Plan. The commercial clearinghouse program was established via legislation in 2023, which required the FAIR Plan to develop and implement a commercial clearinghouse program on or before, July 1, 2024, identical to the residential clearinghouse program.
The purpose and success of the clearinghouse programs are now under a microscope. The question of whether the residential and commercial clearinghouse programs are up and running as intended is challenging to gauge.
According to the Author
According to the author, "Depopulation of California's FAIR Plan is a top priority. As the insurance market begins to stabilize we need to ensure a clear path is accessible for those policyholders who are candidates for the voluntary market, where insurance is more affordable and polices cover more. This measure adds an additional forethought to a broker of record prior to renewing any policyholders in the FAIR Plan."
Arguments in Support
According to the Independent Insurance Agents and Brokers of California, "Insurance agents and brokers are anxious to transition their clients out of the FAIR Plan and into a private market property insurance company as soon as voluntary market carriers reopen throughout the state. AB 69 simply requires insurance agents and brokers to do what they are already doing, certainly what they should be doing, to better serve their clients. Unfortunately, the current property insurance market may not fully reopen until 2026. In addition, a number of insurers actively discourage agents and broker from submitting n more than a few new risks to underwrite per month."
Arguments in Opposition
None on file.
FISCAL COMMENTS
According the Assembly Appropriations Committee, costs of approximately $104,000 in fiscal year (FY) 2025-26, $197,000 in FY 2026-27, and $181,000 in FY 2027-28 and ongoing thereafter to the Department of Insurance (CDI) (Insurance Fund). Although CDI does not have a role in determining whether a FAIR Plan policy can move to the voluntary market, CDI anticipates consumer complaints related to this bill’s review process and assumes a percentage of policyholders will contact CDI for assistance. Accordingly, CDI anticipates additional staff workload to read and respond to consumer complaints, communicate status updates to consumers, and prepare related documents.
VOTES
ASM INSURANCE: 17-0-0
YES: Calderon, Wallis, Addis, Alvarez, Ávila Farías, Berman, Chen, Ellis, Gipson, Hadwick, Harabedian, Krell, Nguyen, Ortega, Petrie-Norris, Michelle Rodriguez, Valencia
ASM APPROPRIATIONS: 14-0-1
YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa
ABS, ABST OR NV: Sanchez
UPDATED
VERSION: June 2, 2025
CONSULTANT: Kathleen O'Malley / INS. / (916) 319-2086 FN: 0000963
ASSEMBLY THIRD READING
ATR Bill Id:AB 69
Author:(Calderon)
As Introduced Ver:December 10, 2024
Majority vote
SUMMARY
Requires a broker of record to determine if a Fair Access to Insurance Requirements (FAIR) Plan policy can be moved to the voluntary market before the FAIR Plan policy is renewed.
Major Provisions
COMMENTS
The California FAIR Plan – "Fair Access to Insurance Requirements" – is an "association" of all insurance companies licensed by the California Department of Insurance (CDI) that provides basic property and casualty insurance in California. It was created in 1968, following urban disturbances from the Watts Riots in Los Angeles.
Simply stated, the purpose of the FAIR Plan is to be the "insurer of last resort" for "basic" property insurance in the event of a market failure. At inception, that was essentially urban commercial property. Ultimately, it has expanded to include homeowners' insurance anywhere in the state, provided that the insurance "cannot be obtained" in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the admitted market, but that point is now debatable.
The FAIR Plan was established to ensure that urban property owners, mostly businesses, would have "fair access" to the property insurance necessary to continue to operate in a market that insurers viewed as too risky to cover. That risk evaluation resulted in a substantial market withdrawal by insurers from the urban property market. Despite its initial creation as an urban/business "insurer of last resort," the FAIR Plan expanded to provide coverage in "designated" brush fire regions of the state. It operated fairly well in this manner until the mid-1990's, when, as a consequence of the genuine homeowners' insurance crisis that followed the Northridge earthquake in 1994, the entire state was designated as the appropriate FAIR Plan coverage region. Today, the FAIR Plan covers all parts of California.
FAIR Plan policies are capped at $3.3 million for residential properties and $20 million per structure for commercial properties. These caps were increased by the Insurance Commissioner in 2020 for residential and 2023 for commercial. Commercial went from $8.4 million per location in 2021, to $20 million per location in 2023, to $20 million per structure subsequently in 2023.
By statute, the FAIR Plan policy is not as broad as traditional homeowners' policies. It is, nonetheless, a fully sound and guaranteed policy that satisfies lenders' security requirements and protects the property against the primary risk factor faced by homeowners, which is [wild]fire. Other coverages are readily available in the market (typically through the purchase of a "difference-in-conditions" or "DIC" policy), which provide wraparound coverage that, coupled with a FAIR Plan policy, results in the same protection provided by a standard homeowner's policy. Because the FAIR Plan's role is to provide coverage when the regular market won't, it is not necessarily the role of the FAIR Plan to provide DIC policies when there is a healthy market for those policies.
According to the FAIR Plan, as of December 2024, the FAIR Plan's total policies in force stands at 516,313, reflecting an 11.1% increase since September 2024 and a 115% increase since September 2021. The FAIR Plan's total exposure is $529 billion, reflecting a 15.5% increase since September 2024 and a 217% increase since September 2021. Following the Palisades and Eaton fires, the FAIR Plan sought approval in February 2025, to assess their member companies. The FAIR Plan previously requested to assess in 1994. The FAIR Plan requested $1 billion from member companies to ensure solvency and claim paying capacity.
FAIR Plan Residential and Commercial Clearinghouse Programs: A significant provision of the SIS is depopulating the FAIR Plan through the clearinghouse programs.
The FAIR Plan residential clearinghouse program was created in 2021. Statute places the responsibility on the FAIR Plan to develop the clearinghouse program with these goals: reduce the concentration of policies and push the use of the regular insurance market; lower the quantity of policies in the FAIR Plan; and provide the insurers the ability to take on additional business. The intent of the program is to get FAIR Plan policyholders back into the admitted market. The policies in the clearinghouse are initially limited to the admitted market for the first 30 days, at which point nonadmitted insurers may also participate by offering a homeowners policy to someone in the FAIR Plan. The commercial clearinghouse program was established via legislation (noted below) in 2023, which requires the FAIR Plan to develop and implement a commercial clearinghouse program on or before, July 1, 2024, identical to the residential clearinghouse program.
Although the programs are new, the purpose and success of them are now under a microscope. The question of whether the residential clearinghouse program is up and running as intended is challenging to gauge.
According to the Author
According to the author, "Depopulation of California's FAIR Plan is a top priority. As the insurance market begins to stabilize we need to ensure a clear path is accessible for those policyholders who are candidates for the voluntary market, where insurance is more affordable and polices cover more. This measure adds an additional forethought to a broker of record prior to renewing any policyholders in the FAIR Plan."
Arguments in Support
According to the Independent Insurance Agents and Brokers of California, "Insurance agents and brokers are anxious to transition their clients out of the FAIR Plan and into a private market property insurance company as soon as voluntary market carriers reopen throughout the state. AB 69 simply requires insurance agents and brokers to do what they are already doing, certainly what they should be doing, to better serve their clients. Unfortunately, the current property insurance market may not fully reopen until 2026. In addition, a number of insurers actively discourage agents and broker from submitting n more than a few new risks to underwrite per month."
Arguments in Opposition
None on file.
FISCAL COMMENTS
According the Assembly Appropriations Committee, costs of approximately $104,000 in fiscal year (FY) 2025-26, $197,000 in FY 2026-27, and $181,000 in FY 2027-28 and ongoing thereafter to the Department of Insurance (CDI) (Insurance Fund). Although CDI does not have a role in determining whether a FAIR Plan policy can move to the voluntary market, CDI anticipates consumer complaints related to this bill's review process and assumes a percentage of policyholders will contact CDI for assistance. Accordingly, CDI anticipates additional staff workload to read and respond to consumer complaints, communicate status updates to consumers, and prepare related documents.
VOTES
ASM INSURANCE: 17-0-0
YES: Calderon, Wallis, Addis, Alvarez, Ávila Farías, Berman, Chen, Ellis, Gipson, Hadwick, Harabedian, Krell, Nguyen, Ortega, Petrie-Norris, Michelle Rodriguez, Valencia
ASM APPROPRIATIONS: 14-0-1
YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa
ABS, ABST OR NV: Sanchez
UPDATED
VERSION: December 10, 2024
CONSULTANT: Kathleen O'Malley / INS. / (916) 319-2086 FN: 0000542
Date of Hearing: April 23, 2025
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
ABPCA Bill Id:AB 69
Author:(Calderon) – As Introduced Ver:December 10, 2024
Policy Committee: | Insurance | Vote: | 17 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill requires a broker of record of an insurance policy placed in the California FAIR Plan Association (FAIR Plan) to determine, before renewal of the policy, whether the policy can be moved to a voluntary market insurance company.
FISCAL EFFECT:
Costs of approximately $104,000 in fiscal year (FY) 2025-26, $197,000 in FY 2026-27, and $181,000 in FY 2027-28 and ongoing thereafter to the Department of Insurance (CDI) (Insurance Fund). Although CDI does not have a role in determining whether a FAIR Plan policy can move to the voluntary market, CDI anticipates consumer complaints related to this bill’s review process and assumes a percentage of policyholders will contact CDI for assistance. Accordingly, CDI anticipates additional staff workload to read and respond to consumer complaints, communicate status updates to consumers, and prepare related documents.
COMMENTS:
- Purpose. According to the author:
Depopulation of California’s FAIR Plan is a top priority. As the insurance market begins to stabilize we need to ensure a clear path is accessible for those policyholders who are candidates for the voluntary market, where insurance is more affordable and policies cover more. This measure adds an additional forethought to a broker of record prior to renewing any policyholders in the FAIR Plan.
This bill is supported by insurance and housing industry groups.
- Background.
Evolution of the FAIR Plan. The FAIR Plan is a private association of all licensed insurance companies created by the Legislature in 1968 to serve as the “insurer of last resort” for basic property insurance in the event of a market failure. Although originally envisioned to cover urban commercial property following the Watts Riots, the FAIR Plan expanded to include homeowners’ insurance across the state and, more recently, due to the continued risk of catastrophic wildfires and admitted market withdrawal, expanded to commercial coverage of farms, ranches, and other agricultural businesses. According to the FAIR Plan, as of December 2024, it has more than 516,000 policies in force, reflecting an 11.1% increase since September 2024, and a 115% increase since September 2021. As noted in the Assembly Insurance Committee’s analysis of this bill, “At origination, the FAIR Plan was not intended to compete with the admitted market, but that point is now debatable.”
FAIR Plan Clearinghouses. AB 3012 (Wood), Chapter 258, Statutes of 2020, created a homeowners’ insurance clearinghouse program with the goal of returning residential FAIR Plan policyholders to the regular voluntary market. Similarly, SB 505 (Rubio), Chapter 180, Statutes of 2023, required the FAIR Plan to establish a clearinghouse program for commercial insurance policies. Admitted insurers have the right of first refusal to offer coverage to a FAIR Plan policyholder, with non-admitted insurers allowed to participate after 30 days. This bill requires a broker of record of a policy placed in the FAIR Plan to determine, before renewal of the policy, whether the policy can be moved to an insurer in the voluntary market.
- Prior Legislation. AB 2260 (Calderon), of the 2023-24 Legislative Session, was similar to this bill, but contained an additional FAIR Plan reporting requirement. AB 2260 was referred to, but not heard by, the Senate Insurance Committee.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: April 2, 2025
ASSEMBLY COMMITTEE ON INSURANCE
Lisa Calderon, Chair
ABPCA Bill Id:AB 69 (
Author:Calderon) – As Introduced Ver:December 10, 2024
SUBJECT: FAIR Plan policy renewals
SUMMARY: Requires a broker of record to determine if a Fair Access to Insurance Requirements (FAIR) Plan policy can be moved to the voluntary market before the FAIR Plan policy is renewed.
EXISTING LAW:
- States that the FAIR Plan was established to assure stability, to assure the availability, to encourage maximum use, and to provide for equitable distribution among admitted insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the normal insurance market. (Insurance (Ins.) Code, Section 10090)
- Specifies that rates for the FAIR Plan shall not be excessive, inadequate, or unfairly discriminatory, shall be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and shall reflect investment income of the plan. (Ins. Code, Section 10100.2)
- Requires the FAIR Plan to develop and implement a residential clearinghouse program and a commercial clearinghouse program. (Ins. Code, Section 10095)
FISCAL EFFECT: Unknown
COMMENTS:
- Purpose: According to the author, “Depopulation of California’s FAIR Plan is a top priority. As the insurance market begins to stabilize we need to ensure a clear path is accessible for those policyholders who are candidates for the voluntary market, where insurance is more affordable and polices cover more. This measure adds an additional forethought to a broker of record prior to renewing any policyholders in the FAIR Plan.”
- Background: The California FAIR Plan – “Fair Access to Insurance Requirements” – is an “association” of all insurance companies licensed by the California Department of Insurance (CDI) that provides basic property and casualty insurance in California. It was created in 1968, following urban disturbances from the Watts Riots in Los Angeles.
Simply stated, the purpose of the FAIR Plan is to be the “insurer of last resort” for “basic” property insurance in the event of a market failure. At inception, that was essentially urban commercial property. Ultimately, it has expanded to include homeowners’ insurance anywhere in the state, provided that the insurance “cannot be obtained” in the normal manner in the market. At origination, the FAIR Plan was not intended to compete with the admitted market, but that point is now debatable.
The FAIR Plan was established to ensure that urban property owners, mostly businesses, would have “fair access” to the property insurance necessary to continue to operate in a market that insurers viewed as too risky to cover. That risk evaluation resulted in a substantial market withdrawal by insurers from the urban property market. Despite its initial creation as an urban/business “insurer of last resort,” the FAIR Plan expanded to provide coverage in “designated” brush fire regions of the state. It operated fairly well in this manner until the mid-1990’s, when, as a consequence of the genuine homeowners’ insurance crisis that followed the Northridge earthquake in 1994, the entire state was designated as the appropriate FAIR Plan coverage region. Today, the FAIR Plan covers all parts of California.
FAIR Plan policies are capped at $3.3 million for residential properties and $20 million per structure for commercial properties. These caps were increased by the Insurance Commissioner in 2020 for residential and 2023 for commercial. Commercial went from $8.4 million per location in 2021, to $20 million per location in 2023, to $20 million per structure subsequently in 2023.
By statute, the FAIR Plan policy is not as broad as traditional homeowners’ policies. It is, nonetheless, a fully sound and guaranteed policy that satisfies lenders’ security requirements and protects the property against the primary risk factor faced by homeowners, which is [wild]fire. Other coverages are readily available in the market (typically through the purchase of a “difference-in-conditions” or “DIC” policy), which provide wraparound coverage that, coupled with a FAIR Plan policy, results in the same protection provided by a standard homeowner’s policy. Because the FAIR Plan’s role is to provide coverage when the regular market won’t, it is not necessarily the role of the FAIR Plan to provide DIC policies when there is a healthy market for those policies.
According to the FAIR Plan, as of December 2024, the FAIR Plan’s total policies in force stands at 516,313, reflecting an 11.1% increase since September 2024 and a 115% increase since September 2021. The FAIR Plan’s total exposure is $529 billion, reflecting a 15.5% increase since September 2024 and a 217% increase since September 2021. Following the Palisades and Eaton fires, the FAIR Plan sought approval in February 2025, to assess their member companies. The FAIR Plan previously requested to assess in 1994. The FAIR Plan requested $1 billion from member companies to ensure solvency and claim paying capacity.
- The Sustainable Insurance Strategy (SIS) and the FAIR Plan: On September 21, 2023, Governor Newsom issued an Executive Order that directed the Insurance Commissioner to “take prompt regulatory action to strengthen and stabilize California’s marketplace for homeowners insurance and commercial property insurance, and to consider whether the recent sudden deterioration of the private insurance market presents facts that support emergency regulatory action.”
A part of the executive order included: to maintain the solvency of the FAIR Plan to protect its policyholders and promote long-term resiliency in the face of climate change, including identifying mechanisms to reduce its share of the overall market in underserved areas and move its customers into the admitted insurance market. The Insurance Commissioner responded promptly by announcing the SIS. Provisions of the SIS specific to the FAIR Plan include:
- Transitioning homeowners and businesses from the FAIR Plan back into the normal insurance market with commitments from insurance companies to cover all parts of California by writing no less than 85% of their statewide market share in high wildfire risk communities;
- Giving FAIR Plan policyholders who comply with the new Safer from Wildfires regulation first priority for transition to the normal market;
- Directing the FAIR Plan to further expand commercial coverage to $20 million per building to close insurance gaps for homeowners associations and condominium developments in order to help meet the state’s housing goals, and to provide required coverage to other large businesses in the state;
- Increasing data reporting by the FAIR Plan to the Department, Legislature, and Governor to monitor progress toward reducing its policyholders; and,
- Ordering changes to the FAIR Plan to prevent it from going bankrupt in the case of an extraordinary catastrophic event, including building its reserves and financial safeguards.
- FAIR Plan Residential and Commercial Clearinghouse Programs: A significant provision of the SIS is depopulating the FAIR Plan through the clearinghouse programs.
The FAIR Plan residential clearinghouse program was created in 2021. Statute places the responsibility on the FAIR Plan to develop the clearinghouse program with these goals: reduce the concentration of policies and push the use of the regular insurance market; lower the quantity of policies in the FAIR Plan; and provide the insurers the ability to take on additional business. The intent of the program is to get FAIR Plan policyholders back into the admitted market. The policies in the clearinghouse are initially limited to the admitted market for the first 30 days, at which point nonadmitted insurers may also participate by offering a homeowners policy to someone in the FAIR Plan. The commercial clearinghouse program was established via legislation (noted below) in 2023, which requires the FAIR Plan to develop and implement a commercial clearinghouse program on or before, July 1, 2024, identical to the residential clearinghouse program.
Although the programs are new, the purpose and success of them are now under a microscope. The question of whether the residential clearinghouse program is up and running as intended is challenging to gauge.
- FAIR Plan Transformation: In the last five years, primarily in response to catastrophic wildfires and admitted market withdrawal, legislation and actions taken by CDI has resulted in the FAIR Plan going through a complete transformation. To summarize, these actions include:
- Increasing FAIR Plan residential limits to $3.3 million;
- Increasing FAIR Plan commercial limits to $8.4 million per location to $20 million per structure;
- Potential expansion and requirement to offer homeowners a more comprehensive coverage aka HO-3 light policy (pending litigation);
- Expanding commercial coverage to farms, ranches and other agricultural businesses;
- Developing residential and commercial clearinghouse programs; and,
- Implementing “Safer from Wildfire” discounts to FAIR Plan policyholders.
- Related Legislation: AB 226 (Calderon & Alvarez) establishes the FAIR Plan Stabilization Act, which authorizes the California Infrastructure and Economic Development Bank (IBank), upon the request of the FAIR Plan, to issue bonds to finance the costs of claims, to increase liquidity and claims-paying capacity of the FAIR Plan, and to refund bonds previously issued for that purpose. Pending on the Assembly Floor.
AB 234 (Calderon) requires the Speaker of the Assembly and the Chairperson of the Senate Committee on Rules to serve as nonvoting, ex officio members of the governing committee of the FAIR Plan, and would authorize each to name a designee to serve in their place. Pending before the Assembly Insurance Committee.
SB 525 (Jones) expands “basic property insurance” offered through the FAIR Plan to include manufactured homes insurance that is comparable to basic property insurance sold for residential dwellings. Pending before the Senate Insurance Committee.
- Previous Legislation: AB 1844 ((Calderon) 2024 Legislative Year) would have required the Speaker of the Assembly and the Chairperson of the Senate Committee on Rules to serve as nonvoting, ex officio members of the governing committee, and would authorize each to name a designee to serve in their place. (Pulled from committee hearing by the Senate Insurance Committee)
AB 2260 ((Calderon) 2024 Legislative Year) would have required the FAIR Plan, until December 31, 2027, to quarterly provide specified information about policies and clearinghouse program progress to the Insurance Commissioner, the Assembly Committee on Insurance, and the Senate Committee on Insurance, and to post the information on the association’s public internet website. The bill would have also required the broker of record of an insurance policy that has been placed in the FAIR Plan to determine, prior to the renewal of the policy, whether the policy can be moved to a voluntary market insurance company. (Did not receive a hearing in the Senate Insurance Committee)
AB 3012 (Daly & Wood) Chapter 258, Statutes of 2020, directs the Fair Plan to implement a clearinghouse program whereby property insurers will be provided information about FAIR Plan policies, for the purpose of encouraging those insurers to offer regular private insurance to FAIR Plan policyholders.
SB 505 (Rubio) Chapter 180, Statutes of 2023, requires, by July 1, 2024, FAIR Plan to establish a clearinghouse program for commercial insurance policies.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Realtors
California Building Industry Association
Community Associations Institute - California Legislative Action Committee
Independent Insurance Agents & Brokers of California, INC.
Surplus Line Association of California; The
Opposition
None on file.
Analysis Prepared by: Kathleen O'Malley / INS. / (916) 319-2086
Discussed in Hearing
57SEC
Assembly Floor
4MIN
Senate Standing Committee on Insurance
2MIN
Assembly Floor
Bill Author
Bill Co-Author(s):
