BILL ANALYSIS Ó SB 1302 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1302 (McGuire) - As Amended April 19, 2016 ----------------------------------------------------------------- |Policy |Insurance |Vote:|13 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- 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 Page 2 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 SB 1302 Page 3 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