California FAIR Plan Association: automatic payments.

Assembly Member Bauer-Kahan, along with coauthors Addis, Gipson, Hadwick, and Harabedian, advances a measure that would require the California FAIR Plan Association to create an automatic payment system and to accept automatic premium payments from policyholders. The core element of the proposal is to provide a formal auto-pay option for policyholders while prohibiting cancellation or nonrenewal solely because a policyholder is not enrolled in automatic payments.

The bill establishes a deadline for implementing the automatic payment system and affirms that nonenrollment in auto-pay cannot be the sole basis for cancellation or nonrenewal. If a policyholder fails to timely pay an outstanding installment, the policyholder would have a period to cure the payment under the existing framework that governs installment payments, and the current 10-calendar-day notice requirement before cancellation for nonpayment would continue to apply.

Operationally, the measure would add a new provision to the state Insurance Code governing how the California FAIR Plan Association processes premium payments and handles cancellations or nonrenewals related to payment status. Enforcement would follow the general Insurance Code framework, with oversight implied to be provided by the Department of Insurance. The bill does not include an explicit state appropriation, and a fiscal analysis is required, though specific funding details are not specified in the text.

Context and practical implications center on integrating automatic payments into the FAIR Plan’s premium collection, potentially affecting policyholders’ access to payment options and the association’s administrative workflows. The proposal preserves the existing nonpayment cancellation framework and notice timing, while removing auto-pay enrollment as an exclusive reason for cancellation or nonrenewal. Ambiguities noted in the bill include enrollment mechanics, supported payment methods, data privacy provisions, and how other grounds for cancellation or nonrenewal would interact with auto-pay status; regulatory guidance and implementation details would likely follow through implementing regulations and agency oversight.