California FAIR Plan Association.

Assembly Members Calderon and Alvarez propose expanding the California FAIR Plan Association's financial capabilities to address the state's property insurance availability crisis. The legislation authorizes the association to access new funding mechanisms through the California Infrastructure and Economic Development Bank, enabling it to maintain adequate claims-paying capacity as its role in the market grows.

The bill establishes three primary financing options for the association, subject to Insurance Commissioner approval: bond issuance through the Infrastructure Bank, direct loan agreements with the bank, and lines of credit from institutional lenders or broker-dealers. These financial instruments can fund claim payments, enhance liquidity, and refinance existing obligations. The association may secure these arrangements using premiums, revenues, and receivables as collateral.

To ensure financial stability, the legislation requires association members to provide assessments sufficient to meet all payment obligations for approved bonds, loans, and credit lines. The bill protects these repayment commitments by preventing subsequent operational plan amendments from altering approved terms. While the Infrastructure Bank gains authority to enforce the association's financial obligations, it remains separate from matters under Insurance Commissioner oversight.

The measure includes specific provisions clarifying that bonds issued under this authority do not constitute state debt and are payable solely from designated funds and revenues. It takes effect immediately upon passage, reflecting the bill's findings about current strains on property insurance availability and the association's need for enhanced financial capacity to serve as a reliable market of last resort.