BILL ANALYSIS Ó
SB 1302
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1302
(McGuire) - As Amended April 19, 2016
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|Policy |Insurance |Vote:|13 - 0 |
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill, an urgency measure, increases the level of support
insurance agents and brokers must provide to homeowners who have
been denied homeowner's insurance coverage. Specifically, this
bill:
1)Requires, effective March 1, 2017, the California Fair Access
to Insurance Requirements Plan Association (FAIR Plan) to
maintain a website and include that website address on all
communications.
SB 1302
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2)Requires an agent, when requested by the consumer, to submit a
coverage application to the FAIR Plan.
3)Declares the bill to be an urgency statute and take effect
immediately, in order to expedite access to coverage for
homeowners in high-risk fire areas.
FISCAL EFFECT:
Negligible state fiscal effect.
COMMENTS:
1)Purpose. According to the author, there remains a big gap in
understanding of the FAIR Plan among many agents and brokers
who are currently only required by statute to provide
homeowners looking for insurance the FAIR Plan "800" toll-free
phone number. Agents are not required to actually help the
consumer apply for such coverage, and many do not understand
the options for coverage provided by the FAIR Plan. This bill
seeks to improve access to coverage under the FAIR Plan. The
bill is supported by the industry and has no opposition.
2)Background. Current law requires property insurers to
establish the FAIR Plan to be the insurer of last resort for
property insurance. The FAIR plan functions according to a
plan of operations approved by the Insurance Commissioner, and
the plan is required to issue basic property insurance to
property owners unable to obtain coverage after making a
diligent effort. It is a private association based in Los
Angeles comprised of all insurers admitted to write property
insurance in California. The FAIR Plan is not a state agency
and is not state-funded. FAIR Plan profits and losses are
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shared by its members in direct proportion to their market
share of property insurance written in California.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081