ASSEMBLYMEMBER LISA CALDERON INTRODUCES THE MAKE IT FAIR ACT

The following information was released by the California State Assembly, Democratic Caucus:

Assemblymember Lisa Calderon (D-Whitter), Chair of the Assembly Insurance Committee, introduced Assembly bill (AB) 1680, which seeks to reform the California Fair Access to Insurance Requirements (FAIR) Plan to expand coverage options.

"Property insurance isn't a luxury in California, it's a necessity. Californians needs a reliable and dependable source of insurance in good times and bad times. The California FAIR Plan is our property insurance safety net and we need this association to work for all Californians. As market conditions change, the FAIR Plan needs to evolve to meet these needs, which is why I've introduced AB 1680. Californians do not want to be non-renewed but if they are, we need to ensure comprehensive coverage is available.Providing more stability and options at a time when the voluntary insurance market is still playing tug-of-war is needed now, in this moment."

TheMake It FAIR Act would improve coverage and claims handling by the California FAIR Plan. The legislation would enact reforms outlined in a comprehensiveReport of Examination completed by the California Department of Insurance. The comprehensive examination evaluated the FAIR Plan's financial conditions, corporate governance, and controls to protect policyholders across 32 areas finding that in more than half of them, the FAIR Plan had not started or fully implemented the recommendations. The legislation would require the FAIR Plan to make significant operational and governance changes to meet Californians' needs, while market improvements take hold, such as:

Implementing a more comprehensive homeowners coverage option like other insurance companies. Current FAIR Plan residential policyholders must buy a separate insurance policy at an additional cost to have coverage for water damage, liability if someone is injured on their property, and other standard coverages.

Hiring more staff to manage its increasing operational needs and workload as well as expeditiously address consumer claims and complaints.

Expediting policyholders in returning to the regular market by improving clearinghouse programs.

Improving transparency by providing public access to meetings and documents of the FAIR Plan to enhance and improve policyholder service and related metrics.

Prioritizing policyholders' resilience from climate change by adopting a formal climate risk assessment, while reporting climate-related financial risks in line with how more than 85% of the national insurance markets report risks based on the standards established through the National Association of Insurance Commissioners.

Creating a formal capital and liquidity management plan like other insurance companies to protect from unexpected events such as major wildfires or storms.

Assemblymember Lisa Calderon has held numerous oversight hearings of the California FAIR Plan. This legislation is in direct response to testimony provided at these hearings. The Make It FAIR Act, additionally, builds on reforms the Assemblymember championed, including new wildfire-safety grants, expanded insurance discounts, stronger FAIR Plan financial safeguards, and modernized insurance laws to increase transparency and accountability.

For the latest updates on AB 1680, and to track other pieces of legislation, visitleginfo.legislature.ca.gov.

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