Insurance Market & FAIR Plan Reform

Requires law enforcement personnel to visibly display name or badge number identification while on duty. Expands criminal penalties for impersonating public officials through any means including online. Prohibits bail recovery agents from conducting immigration enforcement or sharing immigration status. Authorizes officers to request ID when suspecting impersonation or having safety concerns.

Exempts homeowners from tree removal regulations when insurers and state fire officials identify trees as fire hazards. Requires both insurance companies and the Department of Forestry to confirm a tree poses a fire risk. Waives all state and local fees and fines associated with removing dangerous trees from residential properties.

Requires the Department of Insurance to study insurance coverage challenges facing affordable housing providers. Mandates insurers to provide confidential data about coverage and rates for affordable housing properties. Requires recommendations to address insurance cost and access issues by December 31, 2026. Expires automatically on January 1, 2027 after the study is completed.

Establishes a state grant program to develop innovative climate-related insurance solutions through 2035. Requires testing of community-purchased insurance models to reduce costs in high-risk climate areas. Mandates progress reports to legislative insurance committees every three years starting January 2029. Prioritizes expanding insurance access for vulnerable communities most exposed to climate disasters.

Increases late filing penalties for insurance companies that fail to submit required financial statements on time. Sets an initial late fee of $800 for missed financial statement deadlines. Imposes an additional monthly penalty of $900 for continued non-compliance.

Prohibits insurers from canceling commercial property insurance in wildfire-affected areas for one year after emergencies. Requires state agencies to identify and notify insurers of protected ZIP codes within wildfire perimeters. Allows insurance cancellation if property owners are grossly negligent or if unrelated losses make risks uninsurable.

Expands California FAIR Plan insurance coverage to include manufactured homes and mobile homes. Requires insurers to offer manufactured home coverage under the same terms as traditional homes. Broadens access to basic property insurance for previously excluded residential properties.

Requires large insurers to submit annual reports on reinsurance data and catastrophic risk models starting March 2026. Extends deadlines to 180 days for filing insurance claims during state emergencies. Mandates 100% payment of personal property coverage limits during state emergencies without itemized claims. Imposes penalties up to $100,000 on insurers who fail to submit required reports.

Eliminates the 20-hour prelicensing study requirement for new insurance agent license applicants. Maintains the mandatory 12-hour ethics course requirement with one hour focused on insurance fraud. Establishes new certification fees for ethics and continuing education course providers. Requires insurance curriculum to include training on commercial earthquake risk management.

Establishes a grant program to fund wildfire safety improvements for homes and communities in high-risk areas. Prioritizes roof replacements and creation of fire-resistant zones around homes to reduce wildfire damage. Requires recipients to be low-income homeowners in high fire risk zones or local governments. Mandates biennial performance reports tracking grant distribution and effectiveness starting January 2027.

Establishes a new state program to develop public wildfire catastrophe modeling tools for emergency planning. Provides university grants to create research centers focused on wildfire risk prediction and mitigation. Requires the Department of Insurance to publish implementation milestones and budget recommendations by 2026. Prioritizes funding for projects that benefit disadvantaged communities and vulnerable areas with insurance challenges.

Establishes new requirements for bonds given to public entities in property-related contracts. Requires public entities to agree to make direct payments to contractors or their sureties. Mandates public entities to fulfill all contractual obligations before a bond becomes effective.

Expands the State Emergency Food Bank Reserve Program to provide diapers and wipes during disasters. Authorizes food banks to receive reimbursement for purchasing and distributing diapers to eligible communities. Streamlines emergency distribution by exempting diaper purchases from standard procurement requirements. Addresses diaper costs that burden low-income families, averaging $100 per month per child.

Renames the California Pollution Control Financing Authority to the Capital Programs and Climate Financing Authority. Expands the authority's scope to include climate financing, small business support, and sustainable development. Establishes new loan programs for ADA compliance and seismic retrofitting projects up to $250,000. Creates an Employee Ownership Hub to help businesses transition to employee-owned models.

Requires annual reporting on how wildfire-related insurance cancellation bans affect California homeowners. Prohibits insurers from canceling fire insurance policies in wildfire-affected areas for one year after emergencies. Mandates insurers to adjust coverage limits when homes are being rebuilt after total losses. Requires the state to track how many affected homeowners switch to last-resort FAIR Plan coverage.

Increases penalties by up to $2,500 for deceptive insurance advertising during declared disasters. Applies enhanced penalties to commercial communications targeting disaster victims for up to 180 days. Targets for-profit companies that advertise disaster-related services using misleading government references. Protects disaster survivors from scams during the 60-day recovery period after emergencies end.

Caps public insurance adjuster fees at 15% of insurance payouts during disasters and emergencies. Prohibits adjusters from soliciting clients during active disasters or between 6 PM and 8 AM. Extends contract cancellation period to 5 days for disaster victims. Requires detailed written contracts specifying services and fees for property insurance claims.

Establishes new privacy standards requiring insurance companies to protect and limit use of consumer data. Requires insurers to obtain consumer consent before sharing personal data for non-insurance purposes. Mandates clear privacy notices explaining how consumer data is collected, used and shared. Authorizes penalties up to $1 million for privacy violations and creates criminal penalties for data theft.

Reduces the time insurers must provide fire insurance policy copies after a loss from 30 to 15 days. Requires insurers to provide one free policy copy annually to customers who have not filed claims. Allows electronic delivery of policy documents during declared states of emergency.

Requires California to cover residential property insurance rate increases above 7% through 2030. Eliminates state tax on residential property insurance premiums starting January 2026. Mandates a $1 billion annual investment in fire risk reduction over four years. Requires the Department of Insurance to propose regulatory reforms by March 2026.

Requires financial institutions to pay 2% annual interest on insurance payouts held during home repairs. Prohibits banks from charging fees that would reduce insurance payout interest below 2% annually. Takes effect immediately to protect wildfire victims receiving insurance payments.

Modernizes the California FAIR Plan by requiring both a website and toll-free number for insurance assistance. Removes the requirement to publish the FAIR Plan's toll-free number in telephone directories. Eliminates the mandate for the FAIR Plan to file new rate applications with the Insurance Commissioner.

Updates insurance terminology by replacing 'agent' with 'stock agent' across multiple code sections. Expands background check requirements to include unlicensed professional conduct and regulatory actions. Removes fingerprinting requirements for certain insurance license applicants including surplus line brokers. Increases penalties for insurance fraud and strengthens claims processing timelines with higher interest rates.

Expands the Capital Access Loan Program to accept new funding sources for small business assistance. Creates dedicated funds for ADA compliance and seismic retrofitting projects. Authorizes multiple forms of financial assistance including loans, grants, and credit enhancements. Limits administrative costs to 5 percent of appropriations to maximize program benefits.

Expands the California FAIR Plan Association's governing committee to include the Assembly Speaker and Senate Rules Committee Chair as nonvoting members to increase oversight of last-resort property insurance. Takes effect immediately as an urgency measure to address the growing unavailability of property insurance coverage due to catastrophic wildfires. Maintains the FAIR Plan's authority to assess member insurance companies for operational costs and set coverage limits to ensure financial stability.