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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          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