AMENDED IN SENATE AUGUST 19, 2026

AMENDED IN SENATE JUNE 22, 2026

AMENDED IN SENATE JUNE 15, 2026

AMENDED IN SENATE JUNE 4, 2026

AMENDED IN ASSEMBLY APRIL 13, 2026

AMENDED IN ASSEMBLY MARCH 25, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

93

Introduced by Assembly Member Calderon

(Coauthors: Assembly Members Addis, Alvarez, Bauer-Kahan, Berman, Gipson, Harabedian, Ortega, Petrie-Norris, Michelle Rodriguez, and Zbur)

February 2, 2026

An act to amend Section 10095 of, and to add Sections 10100.4 and 10100.5 to, the Insurance Code, relating to insurance.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the Insurance Commissioner to approve the association’s plan of operation and authorizes the commissioner to examine the association’s books, records, files, papers, and documents that relate to its operation. Existing law authorizes the commissioner to impose civil penalties for various violations of the Insurance Code.

This bill would require the association to take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in a report of examination or other operational report. The bill would subject the association to a penalty of not more than $20,000 for failing to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee. The bill would set other civil penalty amounts for violations of provisions relative to the association as not to exceed $10,000 for each act in violation or not to exceed $20,000 if the act was willful, and would require the commissioner to impose those penalties, as specified.

The bill would also authorize the commissioner to require the association to both adjust the policy limits available under programs underwritten by the association and make additional coverage offerings available for fair rental value coverage under the association’s renters’ property insurance program.

The people of the State of California do enact as follows:

SECTION 1.

Section 10095 of the Insurance Code is amended to read:

10095.

(a) Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioner’s review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners’ or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.

(b) The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.

(c) Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.

(d) The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurer’s premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.

(e) The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.

(f) The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.

(g) (1) The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to prior approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or their designee, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. The association shall take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in the report of examination or any other operational report conducted pursuant to this section. If the association fails to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee, the association shall be subject to a penalty of not more than twenty thousand dollars ($20,000) for each failure to take corrective action. These penalties may be in addition to any other penalties provided by law.

(2) The association may request additional extensions of 30 calendar days or other greater extensions approved by the commissioner, for good cause, in order to comply. The commissioner or their designee may deny a request for an extension of time if it is determined the request is not made in good faith or there has not been a good faith effort to comply. For purposes of this subdivision, “good cause” shall include circumstances beyond the association’s control, a showing that the association has made a good faith effort to comply, or other factors agreed to by the commissioner.

(3) For purposes of this subdivision, a failure to take corrective action shall be determined per specific category of corrective action requested as described in the examination.

(h) An insurer member of the association shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the association established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.

(i) To reduce the association’s concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners’ insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners’ insurance through the policy’s listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.

(j) To reduce the association’s concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policy’s listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.

(k) (1) With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).

(2) The association shall provide all policyholders with notice of each of the following:

(A) The manner in which the association shall share policyholders’ personal information to facilitate offers of private insurance through the clearinghouse programs.

(B) A method to opt out of the sharing of policyholders’ personal information in connection with the clearinghouse programs.

SEC. 1.5.

Section 10095 of the Insurance Code is amended to read:

10095.

(a) Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for the commissioner’s review, a proposed plan of operation, consistent with this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component of basic property insurance in homeowners homeowners’ or other dwelling multiperil policies. An insurer described in this subdivision shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state.

(b) The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program.

(c) Under the plan, an insurer shall participate in the writings, expenses, profits, and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance.

(d) The plan shall provide for administration by a governing committee under rules to be adopted by the governing committee with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurer’s premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner.

(e) (1) The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels.

(f) The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw tentative approval or the commissioner may, at any time after giving final approval, revoke that approval if the commissioner feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed before the date of the withdrawal. If the commissioner disapproves or withdraws or revokes their approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part of a revised plan, and, if the association fails to do so, or if the revised plan is unacceptable, the commissioner shall promulgate a plan of operation or part of a plan as the commissioner may deem necessary to carry out this chapter.

(g) (1) The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to prior approval by the commissioner, who shall have supervision of the inspection bureau, the facility, and the association. The commissioner, or any person designated by the commissioner, their designee, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. The association shall take corrective actions, as specified by the commissioner or their designee, to rectify violations of applicable statutes, regulations, accounting principles, the plan of operation, or other legally binding applicable rules identified in the report of examination or any other operational report conducted pursuant to this section. If the association fails to take the specified corrective action within a timeframe agreed upon by the commissioner or their designee, the association shall be subject to a penalty of not more than twenty thousand dollars ($20,000) for each failure to take corrective action. These penalties may be in addition to any other penalties provided by law.

(h) An insurer member of the plan association shall provide to an applicant who is denied coverage, or a policyholder whose policy is canceled or not renewed, the internet website address and statewide toll-free telephone number for the plan association established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance.

(i) (1) To reduce the association’s concentration and number of policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a clearinghouse program on or before July 1, 2021, to help reduce the number of existing FAIR Plan policies and provide the opportunity for admitted insurers to offer homeowners’ insurance policies to FAIR Plan policyholders. An insurer that participates in the clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer homeowners homeowners’ insurance through the policy’s listed agent or broker of record, if any. The clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.

(j) (1) To reduce the association’s concentration and number of commercial policies, and to encourage maximum use of the normal insurance market consistent with subdivision (c) of Section 10090, the association shall develop and implement a commercial insurance policy clearinghouse program on or before July 1, 2024, to help reduce the number of existing FAIR Plan commercial policies and provide the opportunity for admitted insurers to offer commercial insurance policies to FAIR Plan policyholders. An insurer that participates in the commercial policy clearinghouse program shall sign an agreement with the association that sets forth the terms and conditions for the insurer to offer commercial insurance through the policy’s listed agent or broker of record, if any. The commercial policy clearinghouse program may include a provision to include nonadmitted insurers if admitted insurers have the first option.

(k) (1) With respect to the clearinghouse programs referenced in subdivisions (i) and (j), the association shall comply with the Insurance Information and Privacy Protection Act (Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1) and regulations on the Privacy of Nonpublic Personal Information (Subchapter 5.9 (commencing with Section 2689.1) of Chapter 5 of Title 10 of the California Code of Regulations).

(2) The association shall provide all policyholders with notice of each of the following:

(A) The manner in which the association shall share policyholders’ personal information to facilitate offers of private insurance through the clearinghouse programs.

(B) A method to opt out of the sharing of policyholders’ personal information in connection with the clearinghouse programs.

SEC. 2.

Section 10100.4 is added to the Insurance Code, immediately following Section 10100.3, to read:

10100.4.

To meet the needs of policyholders, the commissioner may require the association to do both of the following:

(a) Adjust the policy limits available under programs underwritten by the association.

(b) Make additional coverage offerings available for fair rental value coverage under the association’s renters’ property insurance program.

SEC. 3.

Section 10100.5 is added to the Insurance Code, to read:

10100.5.

(a) A person who violates this chapter is liable to the state for a civil penalty not to exceed ten thousand dollars ($10,000) for each act, or, if the act was willful, a civil penalty not to exceed twenty thousand dollars ($20,000) for each act in violation. The commissioner shall have the discretion to establish what constitutes an act.

(b) A penalty imposed pursuant to this section shall be imposed by and determined by the commissioner. The penalty imposed by this section is appealable by means of any remedy provided by Section 12940 or by the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code).

(c) (1) If the commissioner has reason to believe that a person has violated this chapter, or that the association has violated subdivision (g) of Section 10095, and that a proceeding by the commissioner regarding that violation would be in the public interest, the commissioner shall issue and serve upon the person an order to show cause for the purpose of determining if the commissioner should order that person to pay a penalty imposed pursuant to this section and to cease and desist in the violation. The order to show cause shall include a statement of the charges, a statement of the person’s potential liability under this section, and a notice of a hearing to be held at a time and place fixed in the notice, which shall not be less than 30 days after the service of the notice.

(2) If the charges are found to be justified, the commissioner shall issue and serve upon the person an order requiring the person to pay a penalty imposed pursuant to this section and to cease and desist in the violation. The hearing shall be conducted in accordance with the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), except that the hearings may be conducted by an administrative law judge in the administrative law bureau if the proceedings involve a common question of law or fact with another proceeding arising under other provisions of the Insurance Code that may be conducted by administrative law judges in the administrative law bureau. The commissioner and the appointed administrative law judge shall have all the powers granted under the Administrative Procedure Act. The person shall be entitled to have the proceedings and the order reviewed by means of any remedy provided by Section 12940 of this code or by the Administrative Procedure Act.

(d) The powers granted to the commissioner by this section are in addition to any other powers to enforce penalties, fines, or forfeitures, or denials, suspensions, or revocations of licenses or certificates.

SEC. 4.