Today's Law As Amended

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AB-2167 Residential property insurance: high fire risk areas: study.(2019-2020)

As Amends the Law Today


 Chapter 12 (commencing with Section 10109) is added to Part 1 of Division 2 of the Insurance Code, to read:

CHAPTER  12. High Fire Risk Areas
 (a) The commissioner shall investigate, study, and prepare a report that addresses all of the following:
(1) The extent to which the commissioner may use its authority to create one or more market assistance plans to ensure that residential property insurance is fair, available, and affordable in high fire risk communities in the state, including assessing the need for market assistance plans and how the commissioner may implement those market assistance plans.
(2) The costs and benefits of authorizing insurers to include the cost of reinsurance as part of the rate for residential property insurance, including an analysis of the impact that reinsurance costs, or a portion thereof, would have on residential property insurance, consumers, and the marketplace if permitted within an approved insurance rate. The report shall also analyze the extent to which it is possible to separate out the risk of wildfires in California from the overall reinsurance premium price that reinsurers charge to admitted insurers for reinsurance, and the extent to which it is possible to separate out the reinsurance costs paid by insurers for insuring homes in high fire risk areas.
(3) The extent to which the establishment of a public wildfire catastrophe model would be appropriate for use in residential property insurance ratemaking. The report shall include an analysis regarding the best methodology that will support the use of probabilistic catastrophe loss modeling, subject to, and consistent with, the requirements of Proposition 103, approved by the voters at the November 8, 1988, general election, preserving public access and peer review of the public wildfire catastrophe model, and providing a means for public education on high priority actions that may be taken to reduce wildfire risks.
(b) For each aspect of the investigation, study, and report required by subdivision (a), the commissioner shall ensure public participation and conduct proceedings in accordance with Section 1861.10.
(c) On or before July 1, 2022, the commissioner shall submit the report required by subdivision (a) to the Chairpersons of the Assembly and Senate Committees on Insurance, the Speaker of the Assembly, the President pro Tempore of the Senate, and the Governor.
 This chapter shall remain in effect only until January 1, 2025, and as of that date is repealed.