BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  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
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          insurance.  

           
          Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081