BILL ANALYSIS Ó AB 2735 Page 1 Date of Hearing: April 9, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 2735 (Insurance Committee) - As Amended: March 27, 2014 Policy Committee: InsuranceVote:12-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill permits insurers to provide an alternate notice of a homeowner's right to purchase earthquake insurance, under specified circumstances and subject to approval by the Insurance Commissioner. FISCAL EFFECT Minor and absorbable costs to the California Department of Insurance (Insurance Fund). COMMENTS Purpose . Existing law requires insurers to provide specified notices about the availability of earthquake insurance. For example, it requires that individuals purchasing a homeowner's insurance policy be offered an earthquake insurance policy that meets minimum requirements, and requires that holders of a homeowner's insurance policy who do not have earthquake insurance be notified of their right to purchase earthquake insurance at least every other year. This bill addresses two issues related to earthquake insurance notices. First, the bill clarifies that a homeowner who has purchased an earthquake insurance policy that does not satisfy the standard coverage requirement is still entitled to be reminded every other year that it is their right to purchase a policy that meets the standard coverage requirements. Second, the bill clarifies that the insurer does not have to send a mandatory notice to a homeowner with below standard coverage that includes language saying that they do not have earthquake AB 2735 Page 2 insurance. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081