BILL NUMBER: AB 866	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Niello

                        FEBRUARY 26, 2009

   An act to amend Section 10089.26 of the Insurance Code, relating
to the California Earthquake Authority.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 866, as introduced, Niello. California Earthquake Authority.
   Existing law requires the California Earthquake Authority to issue
policies of basic residential earthquake insurance to any owner of a
qualifying residential property, as specified.
   This bill would state, instead, that the authority is required to
issue a policy of basic residential earthquake insurance to any owner
of a qualifying residential property, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10089.26 of the Insurance Code is amended to
read:
   10089.26.  (a) The authority shall issue  policies
  a policy  of basic residential earthquake
insurance, including earthquake loss assessment policies for
individual condominium unit properties, to any owner of a qualifying
residential property, as long as the owner has secured a policy of
residential property insurance from a participating insurer.
   (1) For purposes of this section, earthquake loss assessment
coverage shall be issued in a minimum amount of fifty thousand
dollars ($50,000) for individual condominium units valued at more
than one hundred thirty-five thousand dollars ($135,000). Earthquake
loss assessment coverage shall be issued in a minimum amount of
twenty-five thousand dollars ($25,000) for individual condominium
units of one hundred thirty-five thousand dollars ($135,000) in value
or less. The value of the land shall be excluded when determining
the value of the condominium, as it relates to the earthquake loss
assessment coverage offered by the authority.
   (2) The panel shall submit to the board, and the board shall
approve, rates for earthquake loss assessment coverage that
reasonably balance the earthquake loss assessment coverages offered
and the potential exposure to earthquake loss resulting from an
earthquake loss assessment policy as compared to the coverages
offered and the potential exposure to earthquake loss resulting from
residential property other than individual condominium policies.
   It is the intent of the Legislature, to the extent practicable,
that rates charged by the authority to condominium loss assessment
policyholders and residential property owner policyholders are
treated equitably, and that a proportionate share of premiums is paid
for potential exposure to loss, to the authority.
   (b) Nothing in this section shall prohibit a participating or
nonparticipating insurer from offering a condominium earthquake loss
assessment policy for different amounts of coverage other than those
offered by the authority.