BILL ANALYSIS �
SJR 28
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
SJR 28 (Monning) - As Amended: May 28, 2014
SENATE VOTE : 31-0
SUBJECT : Earthquake Insurance
SUMMARY : Memorializes the President and the Congress to enact
the Earthquake Insurance Affordability Act (EIAA).
EXISTING LAW :
1)Requires insurers issuing residential property insurance
policies to offer the policy owner earthquake insurance with
specified minimum coverages.
2)Establishes the California Earthquake Authority (CEA) as a
public insurer offering residential earthquake insurance
through participating private insurers.
3)Requires participating private insurers to provide financial
support to the CEA.
FISCAL EFFECT : Undetermined
COMMENTS :
1)Purpose . According to the author, the EIAA would lower the
cost of earthquake insurance for homeowners who buy coverage
from non-profit, state earthquake insurance programs and
direct funding to effective seismic-mitigation measures. It
would allow the California Earthquake Authority to sell
post-event bonds in the private capital market, reducing the
need to purchase reinsurance pre-event and result in rate
reductions and lower deductibles. The Congressional Budget
Office determined that a similar bill introduced in 2007 would
result in no cost to the federal government for loan
guarantees and that post-disaster loans would be negligible.
With more Californians insured, post event disaster assistance
would cost less to both the state and the federal government,
and communities could recover more quickly.
SJR 28
Page 2
REGISTERED SUPPORT / OPPOSITION :
Support
None received
Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086