Existing law generally regulates classes of insurance, including residential and commercial property insurance. The Insurance Rate Reduction and Reform Act of 1988, an initiative measure enacted by Proposition 103, as approved by the voters at the November 8, 1988, statewide general election, prohibits specified insurance rates from being approved or remaining in effect that are excessive, inadequate, unfairly discriminatory, or otherwise in violation of the act. The act requires an insurer that wishes to change a rate to file a complete rate application with the Insurance Commissioner, for which there may be a hearing, as prescribed. Existing law authorizes the provisions of Proposition 103 to be amended by a statute that furthers the purposes of the act and is enacted by the Legislature with a ²/₃ vote.

This bill would require a residential or commercial property insurance policy issued, amended, or renewed on or after January 1, 2022, to include a discount if a local government of the jurisdiction where the insured property is located funds a local wildfire protection or mitigation program. Because the bill would mandate discounts for specified residential property insurance policies, thus affecting the commissioner’s consideration of a rate, the bill would amend Proposition 103.