BILL ANALYSIS �
SJR 28
Page 1
SENATE THIRD READING
SJR 28 (Monning)
As Introduced May 28, 2014
Majority vote
SENATE VOTE :31-0
INSURANCE 11-0
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|Ayes:|Perea, Hagman, Bradford, | | |
| |Ian Calderon, Cooley, | | |
| |Dababneh, Frazier, | | |
| |Gonzalez, Olsen, | | |
| |V. Manuel P�rez, | | |
| |Wieckowski | | |
| | | | |
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SUMMARY : Memorializes the President of the United States and
the Congress of the United States 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 : Unknown. The bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS :
1)Purpose. According to the author, the EIAA would lower the
cost of earthquake insurance for homeowners who buy coverage
from nonprofit, state earthquake insurance programs and direct
funding to effective seismic-mitigation measures. It would
SJR 28
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allow the CEA 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.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
FN: 0004112