Lara advances major consumer protection package to governor's desk

Californians could soon benefit from one of the most significant consumer protection packages advanced by the California Department of Insurance in recent years.

A package of 10 commissioner-sponsored bills now awaiting the governor's signature would strengthen disaster recovery protections, increase insurance company accountability and transparency, safeguard consumer privacy, and expand access to health care.

"Californians deserve an insurance system that works for them before, during, and after life's most difficult moments," said Insurance Commissioner Ricardo Lara. "Consumers play by the rules, and insurance companies should too. These reforms strengthen accountability, speed disaster recovery, protect privacy, and expand access to health care. They reflect years of working with consumers, lawmakers and the governor to turn real challenges into lasting protections."

Strengthening disaster recovery

SB 876 (Senator Steve Padilla) Disaster Recovery Reform Act and SB 878 (Senator Sasha Renée Pérez)

This comprehensive reform package would help homeowners and renters recover more quickly following disasters.

SB 876 would

Double penalties during declared emergencies for violations of insurance claims settlement laws.

Require insurers to pay restitution directly to policyholders when violations occur.

Reduce delays caused by the assignment of multiple adjusters.

Expand policy limits so consumers have more time to recover.

SB 878 would accelerate claims payments by requiring insurers to pay the actual cash value of a total loss within 30 days, with interest due when payments are delayed.

AB 1795 (Assembly Member Mike Gipson) Smoke Damage Recovery Act

Establishes clear guidelines and standards that insurance companies must follow when investigating and settling smoke damage claims involving standing homes after a wildfire.

AB 1795 would establish the nation's first enforceable, science-based standards for inspecting, testing, and restoring smoke-damaged homes and hold insurers accountable for meeting those standards. The bill also would require specialized training and certification for insurance adjusters handling smoke damage claims. The legislation responds directly to concerns raised by wildfire survivors statewide by ensuring families are not forced back into unsafe homes. Insurers would be prohibited from terminating Additional Living Expense coverage for properties within a wildfire impact zone until the home has been restored to pre-loss condition and cleared for human occupancy.

The Lineage Logistics warehouse fire in Boyle Heights demonstrated that large-scale contamination events are not limited to wildfires and exposed important questions about insurance coverage and consumer protections. AB 1795 would require studies by the Department of Insurance and CalOES to evaluate contamination-related insurance gaps and develop recommendations for the governor and legislature.

AB 1680 (Assembly Member Lisa Calderon) Make It FAIR Act

The privately run FAIR Plan provides last-resort coverage for Californians. The Make It FAIR Act would strengthen oversight to protect consumers and preserve the FAIR Plan's financial stability. AB 1680 would require the FAIR Plan's insurance company-run governing board to implement recommendations issued by the Insurance Commissioner to strengthen operations, improve policyholder claims handling, and enhance financial oversight.

Strengthening insurance company 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 would modernize consumer privacy protections by increasing transparency and accountability regarding how insurers and third parties collect, use, and share personal information. This bill would establish comprehensive privacy standards that Californians increasingly expect in today's data-driven economy.

SB 1209 (Senator Ben Allen) Insurance Examination Compliance and Accountability Act

SB 1209 closes a major gap in existing law by providing the Department of Insurance with stronger enforcement authority when insurers fail to comply with corrective actions identified through financial and market conduct examinations. The bill would establish clear compliance timelines, create a formal order-to-show-cause process, authorize penalties for failure to complete corrective actions, and allow insurers to request additional time when appropriate.

SB 1206 (Senate Insurance Committee) Insurance Omnibus Bill

The Department's annual omnibus bill updates California 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 other insurance regulatory provisions.

Expanding health care protections

AB 1798 (Assembly Member Lori Wilson)

Genetic testing should lead to better health outcomes, not discrimination. AB 1798 would protect asymptomatic consumers by prohibiting life and disability insurers from using certain genetic test results for underwriting purposes.

AB 2011 (Assembly Member Gregg Hart and Senator Scott Wiener) Behavioral Health Parity Protection Act

AB 2011 would codify federal Mental Health Parity and Addiction Equity Act regulations into California law, preserving and strengthening protections that ensure Californians maintain access to mental health and substance use disorder treatment regardless of future federal actions.

SB 1023 (Senator John Laird)

SB 1023 would expand access to long-acting injectable HIV pre-exposure prophylaxis by requiring health insurers and health plans to cover the medication under both medical and prescription drug benefits, making treatment more accessible through community clinics and smaller health care providers.

Since taking office in 2019, Lara has sponsored 104 bills to strengthen consumer protections, improve insurance affordability and availability, combat fraud, increase public safety, and protect access to health care. Amid climate-driven disasters, market disruption, and growing consumer challenges, Lara has built one of the most ambitious legislative and consumer protection records in the history of the elected Insurance Commissioner's office.

"California faces real challenges, but resignation is not a strategy," Lara said. "I believe in a stubborn optimism grounded in action. These reforms prove that progress is possible when we meet challenges with determination and purpose."

The governor has until Sept. 30, 2026, to sign or veto legislation passed by the legislature. Lara is urging the Governor to sign all 10 measures and deliver stronger protections that Californians can count on when they need them most.

About the California Department of Insurance

Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state's consumers by fairly regulating the insurance industry. Under the commissioner's direction, the department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud.

Consumers are urged to call (800) 927-4357 with any questions or contact them at insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at (800) 927-4357. Teletypewriter, dial (800) 482-4833.