Assembly Insurance Committee

Vice Chair.

Yeah.

Well, thank you, first of all, for giving me this opportunity to present SB 1301. This bill is all about reforming the process by which residential property insurers choose not to renew someone's property insurance policy, which is a non-renewal. Folks here at this committee certainly know. I accept the committee's amendments. I thank the committee for its work. So this bill is proposed to be amended as three things. It requires insurers to be more transparent on the specific reasons that a policyholders policy is not being renewed. In case of wildfire risk, the notice must include specific information on the community specific reasons and that a good thing for reasons I can get into Number two it provides policyholders with the opportunity to mitigate the problems with their property identified by the insurer. If the policyholder conducts the mitigation and provides evidence and the insurer agrees that the mitigation work was done appropriately, then the policy would be renewed. And then finally, it prohibits some unreasonable bases for a non-renewal, including non-renewals based solely on claims that are made below the policyholder's deductible, claims made that the insurer didn't pay for, claims that weren't covered by the policy, to name a few. We know, unfortunately, that California policyholders receive a non-renewal notice from their insurers at the fourth highest rate in the nation. By the way, it's no surprise that the three highest are all states that are facing a lot of climate-related challenges, risk, Florida, Louisiana, North Carolina, with all the hurricanes and floods and issues that they've been facing. But we're fourth in the nation with regards to non-renewals. It's really becoming a major challenge for folks around the state, working people especially. Ahead of the fires in Los Angeles, we all experienced this phenomenon, particularly poignantly, as the three largest companies announced their plans to dump nearly 50,000 policies. And more than a fifth of those non-renewed policies took place in the areas that would soon burn. And then, of course, we've seen the insufficient coverage, and it's really harmed the rebuild and the recovery of those communities. And one of the problems we saw throughout this process with the non-renewal notices that people receive are often really opaque, and they don't sufficiently specify why a policyholder is being dropped. Today, policyholders receive non-renewal letters from their property insurer containing all sorts of meaningless phrases like, oh, the property doesn't meet underwriting standards. There's no documented issues, no proof, no criteria. I don't mean to say that's meaningless. I just mean that that's something that is so unactionable by a policyholder. There's nothing they can do with that to mitigate or fix their situation. It's very, very frustrating. So they don't right now, they very rarely have the opportunity to fix the problem with their property before being dropped in order to maintain the coverage. This opaqueness makes compliance impossible for policyholders. It allows insurers to drop policies for safe homes without accountability. And then it also, in so doing, makes it harder for us to push our broader risk reduction agenda that we know is at the heart of our battle to ensure a proper solvent and successful and affordable insurance system for the state. Just to give you one example, there's a constituent of mine who lives in Rancho Palos Verdes, shared with me recently that their insurer required them to trim their trees near the roofs overhang and address apparent mold growth on the roof. reasonable asks from a risk reduction perspective. But then despite complying with those requirements that cost thousands of dollars, by the way, and then providing proof, the insurer continued to make additional demands that they hadn't communicated before and made resolution impossible. And ultimately, the non-renewal proceeded despite the constituents' proactive actions to resolve the insurer's concerns. So this bill addresses these kinds of problems for consumers by ensuring that they receive more detailed and transparent notices. They have an opportunity to mitigate. They're treated appropriately by prohibiting unfair bases for non-renewals. It also balances the needs for insurers at the same time. Insurers only need to offer mitigation opportunity to policyholders whose homes can actually meet their underwriting guidelines. We don't want to send people down rabbit holes. So if they adjust their underwriting guidelines such that they will no longer offer policies in a specific neighborhood to balance their risk exposure or if they really displeased with the way that the community is handling its collective risk reduction the bill doesn't require them to offer policyholders a mitigation opportunity. But it's about transparency. At the end of the day, the policyholder can then go to the community leadership and say, hey, we need to get together because we're getting dropped in the communities that start to come together on risk reduction. Anyhow, with me to testify in support of the bill, we've got Magda Molina, who's a consumer speaking about her own experiences, and then Carmen Balber, who's an executive director of Consumer Watchdog.

I respectfully urge you to support SB 1301. Thank you so much. Thank you, Chair and members. We want to thank the chair and your staff and the opposition and the senator's staff for the lengthy conversations about this bill. We are co-sponsors of SB 1301 with Every Fire Survivors Network, and it grew out of the complaints both of our organizations were receiving from consumers across the state about fears of non-renewal. SB 1301 will help Californians stay insured by giving families a better chance to act to prevent a non-renewal. While wildfire risk is the headline reason for non-renewals, they're frequently happening because of things the senator listed. Short notice consumers receive vague and even contradictory instructions from the insurance company and the lack of guidance about what the path might be to retain your coverage. Consumers can't prevent those non-renewals if they don't know the rules and if they and the insurance company and the broker are not on the same page. So SB 1301 cuts through that confusion. It would give consumers better notice, better disclosure of the reasons and evidence for a non-renewal and clear instructions if there's a fix to help people stay insured. Insurance companies will still set the rules for who's eligible and disclose those rules to the Department of Insurance publicly, and this bill does not change that. But consumers have to know their insurance company's criteria for renewal to stay insured, and SB 1301 gives them that path where it's possible. As the senator said, we've accepted amendments in the committee. One of those is to significantly shorten the timelines in the bill. However, we're still talking about 120 days notice for consumers if they're being non-renewed and there's a path to fixing it. And we think that's a really important consumer protection. So I would just end with the fact that fire survivors and everyone across the state is really concerned about access to coverage, both in the wake of the fires as they're rebuilding and also just is my home going to be insured next year's. That's why this bill gains 90% popularity when you poll it with the voters and why we urge your aye vote. Thank you. Thank you. Thank you for coming up today and sharing your experience. Do we have any additional support in the room? Please come forward and state your name and affiliation. Good morning, Chair. This is Mari Lopez with the California Nurses Association in support. Peter Hansel here on behalf of AARP. AARP, AARP, and some support. Hi, Brooke Benetti with Kaiser Advocacy and support on behalf of the California Low Income Consumer Coalition. Sarah Brennan with the Weidemann Group and enthusiastic support on behalf of extreme weather survivors, Shelltown Resilience, and San Diego flood survivors. Thank you. My name is Darlene Green from the Altadena Town Council. I'm a fire survivor. I'm also here in supporter, Dena Rise Up, Pasadena Organizing for Progress, Altadena CoLab, Eden Fire Renters Coalition, and EFRU. I wanted to make a statement and say that I've gotten a chance to see firsthand how people in our community are devastated by cancellations by insurance companies. On a daily basis, we're getting letters from people and emails that are panicked because they don't know what they're going to do. They're going to have to leave the homes that they've lived in for a long time because this bill is the answer to that problem. Thank you so much. Thank you. And it's just name and affiliation, please. Thank you so much. Madam Chair, Julianna Voris on behalf of the League of California Cities and strong support. Good morning. Chloe Shan on behalf of California Environmental Voters and strong support. Thank you. Elaine Lee from San Diego. I support this bill along with the American Policy Holder Association, Americans for Financial Reform, Consumer Attorneys of California Consumer Federation of America, Affordable Homeownership Foundation, Incorporated. Thank you. Hello, my name is Kaye Stein-Tapierre. Thank you for having us here today. I am here representing Every Fire Survivor's Network, a proud co-sponsor of SB 1301, in strong support of the bill, alongside various community organizations. I'm not here just for myself. I'm here on behalf of thousands of Palisadians and California residents. That includes the Molly Stein-Sapir Foundation, which is the organization that I founded and lead, Team Palisades, the Palisades Recovery Coalition, and the Pacific Palisades Community Council, where I sit as a member. Thank you for your time. Hi my name is Eliana Bernstein I am here in support of SB 1301 I represent Courage California Climate Hawks Vote Center for Biological Diversity Sunflower Alliance 350 Southland Legislative Alliance, and the Palisades Recovery Coalition. I work there. I also represent the thousands of young voters who are relying on you because we want to build a family in the Palisades, and we want to feel good in doing so. So thank you. Hello, Joel Loucher on behalf of United policyholders. We strongly support this bill. Thank you. Thank you very much. Kim Stone representing interests and support for the Alliance of Californians for Community Empowerment and 350 South Bay, Los Angeles. Thank you. Hi, I'm Nathan Prevost. I strongly support the bill. I also am in support for Green America, Climate Defenders, Rise Economy, consumer action, and public citizen. Thank you. I'm Barry Zetlin, a 40-year resident of the Palisades, lost our home in the fire. I'm here in support of Leap of Faith, family-to-family support, food and water watch, Bay Area system change, not climate change. And I hope I will be able to afford to have insurance on our home, which is almost rebuilt. Thank you. Good morning. Danny Kando-Kaiser on behalf of the California Low-Income Consumer Coalition in support. Good morning. I'm a policy intern with Mesa Berta Group here on behalf of Consumer Federation of California in support. Thank you. We're going to take a brief moment to establish a quorum. Secretary, please call the roll. Calderon? Here. Calderon here. Wallace. Wallace here. Addis. Alvarez. Avila-Ferries. Berman. Chen. Chen here. Ellis. Gibson. Here. Gibson here. Hadwick. Hadwick here. Herbedian. Krell. Here. Krell here. Nguyen. Here. Nguyen here. Ortega. Here. Ortega here. Petrie-Norris. Rodriguez. Rodriguez here. Valencia. Okay, we're also going to take up the consent calendar. Do we have a motion? Thank you. Please call the roll. This is on the consent calendar, which includes item number one, SB 536 by Senator Archuleta. The motion is due passed to the Committee on Appropriations. Calderon? Aye. Calderon, aye. Wallace? Aye. Wallace, aye. Addis? Alvarez? Avila-Ferrias? Berman? Chen? Aye. Chen, aye. Ellis? Gibson? Aye. Gibson, aye. Hadwick, aye. Hadwick, aye. Harabedian, Krell, aye. Krell, aye. Nguyen, aye. Nguyen, aye. Ortega, aye. Ortega, aye. Petrie-Norris, Rodriguez, aye. Rodriguez, aye. Valencia. Okay, do we have any lead opposition in the room on this bill? Please come forward. You each have two minutes. Good morning. Mark segment with the American property casualty insurance association. Before I start, I do want to correct the perception. There seems to be a perception that insurance companies non renew policies just because insurance companies are in the business of selling policies. Non renewing policies is not good for business. Remember, California, even with the latest rate increases, has had inadequate rates for over 20 years. We still rank 23rd in the country, even though the risk in California is the fourth largest. In a state where rates have to be approved, it can take years to get approved. The only option many companies have to meet their legal requirements in terms of capacity and reserves is to non-renew policies. So I want to be very clear that companies do not non policies because they want to They want to stay in California We also need to remember the words of Commissioner Lahr when he came here and spoke saying you need to look at all of these bills in total to see what the impact is going to be on the insurance industry Right now we're kind of facing kind of a thousand cuts with each of these bills, and I think we need to start looking at big picture where they all fit in. Having said that, we've worked very well with the staff and the author's office and the sponsor, and we are neutral on the bill. We still have a couple of issues we need to deal with. We're still trying to make sure that we protect proprietary information, that the information that consumers get is useful and not just a data dump, and that companies can still continue to participate in this market. Thank you. Thank you, Madam Chair and members. Paul Ramey with the Personal Insurance Federation of California. This is a really big and complicated bill. We've come a very long way over the last four months of negotiation. As my colleague mentioned, there are still some significant implementation language to sort out over the summer break. but with the author's commitment that those concerns will continue to be addressed. We are moving to a neutral position. I close with a big thank you to the chair and the committee and the author for all the hard work and progress to this point. I'm looking forward to continuing the work going forward. Thank you. Any additional opposition in the room, please come forward. Good morning. Sherry McHugh representing the Pacific Association of Domestic Insurance Companies. I would like to echo the comments of my colleagues, And we do look forward to working with the author and the staff and all of you on a few additional tweaks to help protect the small to medium-sized domestic California insurers. There aren't many of them left, and we really want to do our best to make sure we keep our employers in California and our insurers in California. And so we look forward to continuing to work on these bills. Thank you. Thank you. Okay, now I'll bring it back to the committee. Do you have any questions for Senator Allen? Thank you. We have a second. Okay. Great. Secretary, please call the roll. Oh, Senator, would you like to close? I'm so sorry. Thank you. Thank you. Thank you, everybody, for coming up, especially the folks that came all the way from Los Angeles. I know how these are folks that lost their homes. Their lives are in disarray, and to have them here and the voices that they represent is really meaningful and powerful. And just appreciate all the hard work that's gone into getting this bill to this point. I appreciate, I know this has not been easy for the opponents and really appreciate you working with us and getting us to a place where we have a very meaningful bill that you're not opposed to. So thank you to our advocates and to the chair and I respect you yesterday's vote. Thank you. And I also want to thank the victims for coming forward and for sharing your story and for everybody that came up to make sure your voices are heard. And I know you've had such a horrific tragedy and this, you'll live with this forever. And so I really appreciate, you know, Senator Allen for bringing this bill forward and all the work that you've, you've done on behalf of your constituents and Californians. At this time, we'll call the roll. This is, excuse me, this is item number five, SB 1301 by Senator Allen. The motion is due pass as amended to the Committee on Appropriations. Calderon? Aye. Calderon, aye. Wallace? Wallace not voting. Addis, Alvarez, Avila-Fediz, Berman, Chen. Chen not voting. Ellis? Ellis no. Gibson? Hadwick? Hadwick no. Harabedian? Krell? Aye. Krell, aye. Nguyen? Aye. Nguyen, aye. Ortega? Aye. Ortega, aye. Petrie-Norris? Rodriguez? Aye. Rodriguez, aye. Valencia? Okay, that bill's on call. We'll leave the roll open. Thank you, Senator. Perfect timing Welcome Senator Padilla whenever you ready sir Good morning. Good morning, Madam Chair. Thanks for your indulgence and members. I'm pleased to present SB 876 and start by accepting the committee amends and thanking you and your staff for your incredible work with our office and many stakeholders on this bill. As many of you know, this bill represents a broad measure that really seeks to take lessons learned from the challenges we experienced last year. More than 14 destructive fires that burned from January 7th through 31st of last year and wrought unparalleled destruction in our state. Out of that pain and suffering, thousands of people and the increasing propensity of severe wildfires, one thing's become clear. Decades-old insurance laws and practices that govern our claims process have not kept pace. A year later, wildfire survivors have continued to report ongoing problems with accessing their health insurance benefits with delays, denials, and miscommunication from insurance companies at the top of the list of consumers' complaints filed with the department since that period of time. SB-876 takes lease lessons and experiences to reform the claims process by cutting red tape, improving payouts, and ending delays. It requires the creation of a disaster recovery plan, doubles penalties during a declared emergency for violations of insurance fair claims practices, requires insurance policies to pay restitution of policyholders, mandates offers of extended replacement costs and additional living expenses, among other provisions. As the chair of the Senate Insurance Committee, I'm committed, and I know you are as well, Madam Chair, to balancing the need for affordability and availability to ensure that policies keep pace with the needs of Californians while remaining accessible. This is why I've engaged a broad group of stakeholders and was sensitive to cost implications throughout the process to Californians. Along with amending the bill in the Senate, to address a number of concerns from trades, we've most recently amended the bill further to address the following. It strikes language requiring building code upgrade coverage at 20% during a state of emergency. Added language to address insurer trade concerns that restitution be connected to direct financial loss. amended the five-day time limit to provide a status report to the claimant when a new adjuster is assigned to the claim to 15 calendar days. Addresses insurer concerns that in cases where the home is not rebuilt for several years, the insurer will have no clear-cut office to what building codes would apply to the claim by allowing a three-year cutoff in their policy. As a comprehensive piece of legislation, this bill fills critical gaps at the 2025 LA wildfires, disaster exposed, protects homeowners at their most valuable moment, and I remain committed to addressing these gaps while protecting policyholders from increasing costs. Obviously, today I'm joined by Josephine Figueroa with the Department of Insurance and Joel Lauter with United Policyholders. Good morning, Chair Calderon and members of the committee. Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance under the leadership of Insurance Commissioner Ricardo Lara. I want to thank Senator Padilla for authoring this important measure which directly addresses spread underinsurance, delays, and inconsistent claims handling that have harmed wildfire survivors and slowed community recovery across California. I also want to thank the chair and the committee staff for their time and effort working with the Office of the Department and all stakeholders. California is experiencing disasters of a scale and frequency we have never seen before. Wildfire seasons are longer, more destructive, and more expensive, and each year thousands of families are forced from their homes. Too many of them have learned after losing everything that their insurance coverage is nowhere near enough to rebuild. Construction costs have surged, building codes have been walled, and the gap between policy limits and actual rebuilding costs have grown wider and more painful. At the same time, survivors routinely face delays, inconsistent communications, and fragmented claim payments that prolong displacement and slow community recovery. Last year's fires in the Los Angeles, San Diego counties illustrate the magnitude of the problem. Fourteen major fires swept through the region, with the Eaton Fire in Altadena and the Palisade Fire in Pacific Palisades, causing the most severe destruction. More than 12,000 homes were damaged or destroyed. Over a year later, many survivors are still struggling to access the benefits they paid for, reporting delays, denials, and persistent miscommunications from insurers. These experiences make clear that our current laws, many written decades ago, are no longer adequate for the realities of today's climate-driven disasters. SB 876 directly confronts these failures and is designed to break the cycle and restore confidence in the system that families depend on, on their worst moments in their lives. SB 876 does this by establishing the following. Accurate real-world replacement cost estimates. Families should not discover after a total loss that they were massively underinsured. SB 876 requires insurers to provide updated estimates that reflect actual construction costs, not outdated numbers. Strong coverage option. SB 876 requires insurers to offer sufficient extended replacement costs. It does not force anyone to buy this coverage. It simply ensures families have the option to protect themselves. Building code upgrade coverage. When building homeowners must meet current safety codes, SB876 strengthens coverage so families are not blindsided by out-of-pocket costs for mandatory upgrades. Ending adjuster roulette. SB876 requires the status report within 15 days of an adjuster change so survivors don't have to start over. These reforms work together to reduce underinsurers, speed up recovery, and help communities rebuild with greater stability and resilience. Californians deserve insurance coverage that functions when they need it most, not a system that leaves them underprotected, delayed, and unable to return home. On behalf of Insurance Commissioner Ricardo Lara, I ask for your aye vote. With me today to help provide any technical assistance is Tony Signorelli, Deputy Commissioner for the Consumer and Services and Market Conduct Division. Thank you. Thank you. My name is Joel Loucher. I here on behalf of United Policyholders We keep it short but basically we have an insurance system where often the amount of coverage on the dwelling would be inadequate to rebuild even in a single loss When there is a catastrophic event and there is demand surge, those prices increase dramatically to build for labor, for materials. Just a lot of components of this bill help people when they need help the most in the rebuild process, the building code upgrades, and for that reason, we strongly support this bill. Thank you. Do we have any additional support in the room? Please come forward and state your name and affiliation. Thank you, Kim Stone. on behalf of Consumer Watchdog in support. Thank you. Peter Hansel on behalf of AARP California. AARP supports the bill. Madam Chair, members, Andrew Antwi, with Shalya, Antwi, Schmelzer, and Lange here today on behalf of Los Angeles Mayor Karen Bass, on behalf of the residents of the Palisades and all residents in the state, we'd thank the author for the bill and we support. Closet with California Environmental Voters in strong support. Thank you. Do we have any lead opposition on this bill? Please come forward. Madam Chair, Armand Feliciano on behalf of the California Fair Plan. We want to thank Senator Padilla and the CDI for working with us on the bill. At the moment, the Fair Plan is reviewing the recent amendments, so they remain respectfully opposed at the moment. But we'd like to continue to work with Senator Patia and CDI on the issue. Thank you. Thank you, Madam Chair and members. Sarah and Taylor on behalf of the Personal Insurance Federation of California. And we are very appreciative of the author's amendments and the willingness to take the committee amendments, which do address several significant concerns that you just heard about. The changes to the bill throughout this process are indicative of the hard work by all stakeholders, including the committee and the team at CDI. We appreciate everyone's time and energy in this. At this time, we think it's appropriate. The amendments are sufficient for us to remove our opposition, and we look forward to building on the early success of the sustainable insurance strategy. So thank you. Thank you. Good morning, Audrey Ritajek on behalf of the California Building Industry Association. With the most recent amendments, we are now neutral as well and removed our opposition. Thank you. Madam Chair, members, Denny Ritter with the American Property Casualty Insurance Association. I would like to echo the comments made by my colleague. We greatly appreciate all of the work from the author, your staff, the sponsors, and the committee in addressing several of our major concerns with the piece of legislation. And so with those most recent amendments, we will be going neutral. Thank you. Good morning. Sherry McHugh representing the Pacific Association of Domestic Insurance Companies. I would like to echo the comments of my colleagues as well. Thank you to the author committee staff, the sponsor of the bill. We are happy to go neutral today, but look forward to working on additional workability issues to help protect the small to medium sized domestics in California. Thank you. Good morning, Jasmine Valle on behalf of Civil Justice Association of California and respectful opposition Sorry to the current language in print but we appreciate the amendments and look forward to re our position Thank you Thank you Okay I going to bring it back to the committee Do you have any questions for Senator Padilla Thank you. Okay, Senator, would you like to close? As you are well aware, Madam Chair, first of all, thank you for your indulgence and a minor apology to Mr. Signor Ali today for filling the note that he was here to answer tech questions. This would mean to be rude, but we rushed over. This has been a complex process, and the leadership from the CDI and the commissioners very much appreciated. Your collaboration, your amazing staff's collaboration is appreciated. I think this has, as you can see, been a hard endeavor, will continue to be. I'm very happy that we're able to present to your committee a bill that is reaching a high degree of consensus, and I would respectfully ask for an aye vote. Thank you. Secretary, please call the roll. This is item number four, SB 876 by Senator Padilla. The motion is due pass as amended to the Committee on Judiciary. Calderon? Aye. Calderon, aye. Wallace? No. Wallace, no. Addis? Alvarez? Aye. Alvarez, aye. Avila Farias? Aye. Avila Farias, aye. Berman? Aye. Berman, aye. Chen? Chen, no. Ellis? No. Ellis, no. Gibson? Hadwick? No. Hadwick, no. Harabedian? Aye. Harabedian, aye. Krell? Aye. Krell, aye. Nguyen? Aye. Nguyen, aye. Ortega? Aye. Ortega, aye. Petrie Norris. Petrie Norris. I Rodriguez Rodriguez. I Valencia. Okay, that bill is out and we'll leave the roll open. Thank you, Senator. Thank you, Madam Chair. Okay, we're going to let members add on right now. Secretary, please call the roll on the consent calendar. On the consent calendar, Addis? Addis, aye. Alvarez? Aye. Alvarez, aye. Avila-Fedias? Aye. Avila-Fedias, aye. Berman? Aye. Berman, aye. Ellis? Aye. Ellis, aye. Harabedian? Aye. Harabedian, aye. Petrie-Norris? Aye. Petrie-Norris, aye. Valencia? Let's call the roll on SB 876. Item number 4, SB 876, Addis? Aye. Addis, aye. Gibson? Is it the Allen bill? You're fine. That was the deal. Time out. It's not a long morning. It's only two bills today. That was the deal. That was the deal. Time out. It's not a long morning. Okay, please call the roll on SB 1301. Item number five, SB 1301 by Senator Allen Addis. Aye. Addis, aye. Alvarez, Alvarez, aye. Avila-Fedias, aye. Avila-Fedias, aye. Berman, aye. Berman, aye. Gibson, Herbedian, aye. Herbedian, aye. Petrie-Norris, aye. Petrie aye Petrie aye Valencia Okay we to leave the roll open for five minutes for missing committee members. Then we're going to close down. Okay. Secretary, please call the roll. This is item number four SB 876 by Senator Padilla Gibson. Aye. Gibson, aye. Valencia. It says item number five, SB 13-1 by Senator Allen. Gibson? Aye. Gibson, aye. Valencia. Aye. Secretary, please call the roll. On the consent calendar, Valencia? Yes. Valencia, aye. That bill is out. Item number four, SB876, Valencia? Yes. Valencia, aye. That bill is out. Item number five, SB131 by Senator Allen. Valencia? Yes. Valencia, aye. That bill is out. This concludes the Assembly Insurance Committee. Thank you. Thank you.