An act to amend Section 10095 of, and to add Sections 10100.4 and 10100.5 to, the Insurance Code, relating to insurance.
Summary
AB 1680 would revise the California FAIR Plan Association’s governing statute to give the Insurance Commissioner stronger oversight and enforcement tools. The bill requires the FAIR Plan to carry out corrective actions identified by the commissioner or the commissioner’s designee in examination or operational reports, and it creates new civil penalties if the association fails to comply. It also establishes broader penalty authority for violations of the chapter, with fines up to $10,000 per act and up to $20,000 per willful act, administered by the commissioner through an administrative process.
The bill also expands the commissioner’s authority over the coverage the FAIR Plan may offer. It would allow the commissioner to require the association to adjust policy limits under its programs and to add coverage options for fair rental value under the renters property insurance program. In addition, the bill preserves and reinforces the FAIR Plan’s clearinghouse programs for homeowners and commercial policies, which are intended to move policyholders back into the admitted market when possible, while requiring privacy notices and opt-out rights for sharing personal information in those programs.
Impact
AB 1680 would amend Insurance Code Section 10095 and add new Sections 10100.4 and 10100.5, increasing the Insurance Commissioner’s supervisory and enforcement authority over the California FAIR Plan Association. It would create explicit statutory duties for the association to implement corrective actions after examinations, authorize monetary penalties for noncompliance, and establish a commissioner-run process for assessing and appealing penalties. The bill would also authorize the commissioner to direct changes in policy limits and renters fair rental value coverage, affecting the scope of coverage available through the FAIR Plan and potentially the options available to homeowners and renters who rely on it.
Sentiment
The available vote history suggests the bill has generally been viewed favorably by legislators, with a strong committee vote of 14-1 and a later committee action of 6-0 to do pass and re-refer to Appropriations. That pattern indicates broad support for stronger oversight of the FAIR Plan and for measures aimed at improving consumer protection and market stability. No committee transcript was provided, so there is no recorded debate in the materials about specific arguments for or against the bill.
Contention
The main points of contention appear to be the bill’s expanded regulatory and penalty authority over the FAIR Plan Association. Supporters likely view the new corrective-action requirements, civil penalties, and commissioner authority to adjust coverage as necessary to address compliance issues and improve policyholder protections. Potential concerns would come from the FAIR Plan, participating insurers, or other stakeholders worried about increased administrative burden, enforcement exposure, or commissioner control over coverage terms. The privacy provisions for clearinghouse programs may also be sensitive because they require sharing policyholder information to facilitate private-market offers, even though the bill includes notice and opt-out protections.
Article V Convention; process for appointing commissioners and alternate commissioners to represent the State of Alabama at Article V Convention established