Insurance Market & FAIR Plan Reform

Requires law enforcement officers to display agency identification and name or badge number by January 2026. Expands criminal penalties for impersonating law enforcement officers through any means including online. Prohibits bail recovery agents from assisting with immigration enforcement or sharing fugitive information. Mandates agencies post public policies on officer identification with limited exemptions for undercover work.

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.

Establishes a temporary study in the Insurance Code on affordable housing insurance. Requires insurers to provide data with trade-secret protections. Requires a report to lawmakers within one year of appropriation. Sunsets the chapter in 2031 and ties implementation to funding.

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. Protects apartment complexes, senior living facilities, and other commercial residential properties from coverage loss. Allows cancellation only if property owners are negligent or buildings become otherwise uninsurable.

Adds manufactured homes and mobile homes to basic property insurance. Implements parity in terms and conditions with other dwellings. Maintains the earthquake coverage framework and renewal notices. Declares no new appropriation is required and maintains oversight with the Insurance Commissioner.

Requires large insurers to submit annual reports on reinsurance programs and climate risk models starting March 2026. Extends deadlines for homeowners to collect full replacement costs to 36 months during state emergencies. Increases advance payments for personal property losses to 60% of policy limits during declared emergencies. Mandates insurers grant extensions for proof of loss submissions when policyholders face unavoidable delays.

Eliminates the 20-hour prelicensing study requirement for new insurance agent license applicants. Requires all new insurance agent applicants to complete a 12-hour ethics course including fraud prevention. Establishes new oversight standards for online insurance education courses and providers. Updates certification fees for insurance education providers ranging from $14 to $75 for two-year periods.

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 program to fund universities in developing public wildfire risk modeling tools. Requires the Department of Insurance to award competitive grants for wildfire safety research and education. Prioritizes projects that benefit disadvantaged communities facing wildfire insurance challenges. Creates a dedicated account to fund wildfire catastrophe modeling and research initiatives.

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 SEFBRP to include diapers and wipes. Authorizes use of SEFBRP funds to purchase, distribute, and reimburse diapers and wipes. Defines eligible food banks as EFAP/CSFP participants and CA Feeding America members. Grants procurement exemptions and allows informal implementation, pending appropriation.

Renames the pollution financing authority to Capital Programs and Climate Financing Authority. Establishes ADA, seismic, and CALReUSE loan funds with continuous appropriation. Expands rate reduction bonds with expedited review, fees, and annual reporting. Creates Employee Ownership Hub and expands organic waste rules with penalties and rural exemptions.

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.

Strengthens regulations for public insurance adjusters by requiring detailed service descriptions and fee restrictions in contracts. 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 and allows immediate cancellation for misrepresentation. Mandates clear fee disclosures and prevents charging fees on insurance payments made before contract signing.

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 hazard insurance proceeds held for property repairs. Prohibits banks from charging fees that would reduce insurance proceeds interest below 2% annually. Takes effect immediately to protect wildfire victims rebuilding their homes. Allows banks to deposit insurance proceeds in interest-bearing accounts at federal institutions.

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 the licensing framework by replacing 'agent' with 'stock agent'. Deletes fingerprint submission requirements for certain license applicants. Expands automatic denial to bail, insurance adjuster, and public adjuster licenses. Extends State Compensation Insurance Fund investment authority indefinitely.

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.