Property insurance: Seismic Safety Account.

Existing law provides for the Alfred E. Alquist Seismic Safety Commission in the State and Consumer Services Agency, which consists of 15 members appointed by the Governor and confirmed by the Senate. The commission is responsible for certain aspects of earthquake hazard mitigation, including, but not limited to, setting goals and priorities in the public and private sectors, encouraging research, and helping to coordinate the earthquake safety activities of government at all levels. This bill would create the Seismic Safety Account as a special account within the Insurance Fund with the funds to be distributed, upon appropriation, to the commission for the support of the commission and to the Department of Insurance for the actual administrative costs incurred in collecting the assessments. In order to fund the account, the bill would impose an assessment on each person who owns real property, commercial or residential, that is covered by a property insurance policy. The bill would require the department to calculate the annual assessment, as specified, not to exceed $0.15 per property exposure. The insurer, upon receipt of an invoice from the department, would be required to transmit payment to the department for deposit into the account, and to collect the assessment from the insured, unless the insurer elects to pay the assessment on the insured's behalf. The bill would also make the insurer responsible for any collected assessment that was not remitted to the department, and the department would be authorized to charge a late fee of 1.5%, per month, of the balance due compounded monthly, for any payment not paid within 45 days of the invoice date. The insurer would not be obligated to take legal action to enforce the collection of the assessment. The bill would require the department to report by December 1 of each year to the Legislature, the commission, and the Department of Finance on the assessment calculation methodology employed. This bill would declare that it is to take effect immediately as an urgency statute.