AMENDED IN SENATE AUGUST 20, 2026

AMENDED IN ASSEMBLY APRIL 16, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

97

Introduced by Assembly Member Bauer-Kahan

February 20, 2026

An act to add Article 12.5 (commencing with Section 979) to Chapter 1 of Part 2 of Division 1 of amend Section 929.3 of, and to add Section 929.4 to, the Insurance Code, relating to insurance.

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

LEGISLATIVE COUNSEL’S DIGEST

Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and generally regulates the business of insurance in the state. Existing law establishes the California FAIR Plan Association, 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 regulations authorize insurers, in distressed areas and for properties insured by the FAIR Plan that are exposed to wildfire risk, to use catastrophe modeling, as specified. Under existing regulations, a distressed area includes undermarketed ZIP Codes and distressed counties.

This bill, bill would require the department, on or before July 1, 2027, and yearly thereafter, would require the department to conduct a review and update distressed areas based on updates to the WUI designated areas. As part of the review and update, review, the bill would require the department, among other things, to hold at least one public meeting to allow interested persons to submit suggestions for distressed areas, as specified. The bill, additional factors to consider when evaluating FAIR Plan percentages in WUI areas. The bill would require the department, on or before January 1, 2028, and yearly thereafter, would require the department to publish a bulletin with a list of ZIP Codes in distressed WUI areas on its internet website and to provide this information to certain committees in the Legislature.

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

SECTION 1.

The Legislature finds and declares the following:

(a) The Sustainable Insurance Strategy (SIS) regulations issued distressed areas researched and identified by the Department of Insurance mark meaningful progress toward improving insurance availability and market stability across California.

(b) Building In continuing to build on this foundation, there is an opportunity, however, to further enhance these regulations to opportunity to further ensure that all communities—especially those facing elevated wildfire risk—are fully supported.

(c) Reviewing and refining the use of Regularly reviewing percentage-based ZIP Code thresholds could help better capture the unique challenges experienced by wildland-urban interface (WUI) communities. By more directly addressing the realities these areas face, the SIS department can more effectively respond to the impacts of the current insurance landscape.

(d) WUI communities have shown resilience despite experiencing a high number of insurance policy nonrenewals, cancellations, and limitations in wildfire coverage. Aligning the definition of distressed areas with Recognizing the challenges of WUI areas and the on-the-ground realities can ensure that homes currently on the FAIR Plan are appropriately accounted for. This would help close existing gaps and improve coverage in some of California’s most wildfire-prone communities.

(e) By building on the progress already made, these targeted enhancements analyses of WUI areas and FAIR Plan data can help further understanding of wildfire risk and insurance, and create a more inclusive, resilient, and effective insurance framework for all Californians.

SEC. 2.

Section 929.3 of the Insurance Code is amended to read:

929.3.

(a) Failure to submit a report pursuant to Section 929 shall subject an admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000) or, if the act for each 30-day period that the insurer is not in compliance, unless the failure to comply was willful, a civil penalty not to exceed ten thousand dollars ($10,000). ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000). The commissioner shall collect the amount payable and may bring an action in the name of the people of the State of California to enforce collection. These penalties shall be in addition to other penalties provided by law.

(b) An insurer may request, and the commissioner may grant, a 30-day extension, if needed due to unintended or unforeseen delays, to submit the report. If the insurer fails to submit the report within 30 days of a written notice by the commissioner regarding the failure to submit the report, the commissioner may find that the failure to submit the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000). ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000).

(c) The penalty imposed by this section shall be enforced by the commissioner and may be appealed by means of a remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section.

SEC. 3.

Section 929.4 is added to the Insurance Code, immediately following Section 929.3, to read: