Governor signs landmark consumer protection package backed by Commissioner Lara

Governor Gavin Newsom has signed nine Department of Insurance-sponsored bills this year championed by Insurance Commissioner Ricardo Lara, delivering major new protections for wildfire survivors, increasing accountability for insurers, modernizing consumer safeguards, and expanding access to critical health care services for Californians.

Several of the new laws grew directly out of concerns raised by wildfire survivors, patients, policyholders, consumer advocates, and community leaders. Their experiences helped identify gaps in existing laws and informed the solutions reflected in this year's Department-sponsored legislative package.

"When Californians pay their premiums, they deserve more than a policy on paper. They deserve protection that shows up when disaster strikes," said Lara. "From wildfire survivors rebuilding their lives, to families dealing with smoke damage, to patients seeking access to critical health care, these laws turn real experiences into real protections. They reflect years of listening to consumers, identifying gaps in the system, and working with lawmakers to deliver practical solutions that will improve people's lives."

Improving disaster recovery

The devastating Los Angeles wildfires underscored the importance of ensuring survivors have the resources, protections, and support necessary to recover and rebuild.

SB 876 (Senator Steve Padilla) Disaster Recovery Reform Act — This comprehensive reform package will help homeowners and renters recover more quickly following disasters by:

* Doubling penalties during declared emergencies for violations of insurance claims settlement laws

* Requiring insurers to pay restitution directly to policyholders when violations occur

* Reducing delays caused by the assignment of multiple adjusters

* Requiring insurers to offer expanded policy limits so consumers have more time to recover and experience less instances of underinsurance

The law will be implemented in phases beginning January 1, 2027, with additional provisions taking effect January 1, 2028.

AB 1795 (Assembly Member Mike Gipson) Smoke Damage Recovery Act — AB 1795 establishes the nation's first science-based standards for investigating, testing, and restoring smoke-damaged homes following a wildfire.

The landmark legislation responds directly to concerns raised by wildfire survivors by establishing clear standards insurers must follow when evaluating smoke-damage claims and helping ensure families are not forced back into unsafe homes before contamination has been properly assessed and addressed.

The legislation also incorporates lessons learned from the Lineage Logistics warehouse fire in Boyle Heights by requiring studies by the Department of Insurance and CalOES to evaluate contamination-related insurance gaps and develop recommendations for the Governor and Legislature.

Certain provisions take effect January 1, 2027, with remaining provisions effective January 1, 2028, and July 1, 2029.

AB 1680 (Assembly Member Lisa Calderon) Make It FAIR Act — The privately run FAIR Plan provides last-resort coverage for Californians.

AB 1680 improves oversight of the FAIR Plan by requiring implementation of corrective actions identified through examinations, strengthening operations, improving claims-handling practices, enhancing financial accountability, and reinforcing protections for policyholders.

Improving insurance industry accountability and consumer protections

SB 354 (Senate President pro Tempore Monique Limón) Insurance Information and Privacy Protection Act — California's insurance privacy laws are more than 40 years old and have not kept pace with modern industry practices. SB 354 modernizes consumer privacy protections by increasing transparency and accountability regarding how insurers and third parties collect, use, and share consumers' personal information.

This new law, which takes effect beginning on July 1, 2028, including a five-year implementation date for licensees to implement their records retention and deletion policies, establishes comprehensive insurance privacy standards that Californians increasingly expect in today's data-driven economy. SB 354 also extends specified compliance provisions to California insurance producers, including insurance agents, brokers, and wholesale intermediaries starting on January 1, 2029.

SB 1209 (Senator Ben Allen) Insurance Examination Compliance and Accountability Act — SB 1209 closes a significant gap in existing law by providing the Department with stronger enforcement authority when insurers fail to implement corrective actions identified through financial and market conduct examinations.

The law establishes clear compliance timelines, authorizes penalties for noncompliance, creates a formal order-to-show-cause process for violations, and provides stronger tools to ensure corrective actions identified through examinations are fully implemented. SB 1209 also allows insurers to request additional time of at least 30 calendar days, or longer if approved by the Commissioner, to comply. This law will go into effect January 1, 2027.

SB 1206 (Senate Insurance Committee) Insurance Omnibus Bill — The Department's annual omnibus bill updates insurance law by:

* Expanding grounds for inactive licenses

* Adjusting insurer investment authority

* Strengthening licensing and disclosure requirements

* Updating public adjuster rules

* Improving workers' compensation fraud reporting requirements

* Modernizing a range of insurance regulatory provisions

This new law will go into effect January 1, 2027.

Expanding health care protections

AB 1798 (Assembly Member Lori Wilson) Safeguarding Genetic Information Act — Genetic testing should lead to better health outcomes, not discrimination. AB 1798 protects consumers by prohibiting life and disability insurers from using certain genetic test results of asymptomatic individuals for underwriting decisions.

The legislation helps ensure genetic testing remains a tool for early detection, prevention, and better health outcomes rather than a basis for discrimination. This law will be effective January 1, 2027.

AB 2011 (Assembly Member Gregg Hart and Senator Scott Wiener) Behavioral Health Parity Protection Act — AB 2011 codifies federal Mental Health Parity and Addiction Equity Act regulations into state law, preserving and strengthening protections that ensure consumers maintain access to mental health and substance use disorder treatment regardless of future federal actions. This law will go into effect January 1, 2027.

SB 1023 (Senator John Laird) — SB 1023 expands access to long-acting injectable HIV pre-exposure prophylaxis (PrEP) by requiring coverage through both medical and prescription drug benefits, helping make treatment more accessible through community clinics and smaller health care providers. This law will go into effect January 1, 2027.

A record of reform and results

Since taking office in 2019, Lara has pursued a strategy built on three core principles: Listen to consumers. Modernize regulation. Change the law when necessary.

Through hundreds of town halls, community meetings, workshops, and events in all 58 counties, Lara has engaged with more than 150,000 Californians and used those conversations to help shape public policy.

Through the Sustainable Insurance Strategy, the most significant regulatory reform of California's insurance market in decades, Lara updated regulations to better reflect modern catastrophe risk while requiring insurers to expand coverage commitments in high-risk communities.

At least 12 insurance groups have committed to writing more policies in wildfire-distressed areas, while major insurers including State Farm and Allstate have committed to opening new business in the state.

Where regulation reaches its limits, legislation closes the gap. Drawing on his experience as a former state legislator, Lara has sponsored 102 bills addressing consumer protection, disaster recovery, climate resilience, health care access, reproductive health care, fraud prevention, and public safety. With 69 bills signed into law, including the nine measures signed this legislative session, Lara has compiled one of the most productive legislative records of any California Insurance Commissioner since voters made the office elective in 1989.

A lasting foundation for consumers

"When I became Commissioner, I promised Californians that I would fight for consumers, modernize this Department, and prepare our insurance market for the challenges ahead," said Lara. "These laws demonstrate what is possible when government listens, acts, and remains focused on solving real problems facing the people it serves."

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