The Catastrophic Wildfire Insurance Act.

Existing law generally regulates classes of insurance, including residential and commercial property insurance. Existing law requires an admitted insurer with written California premiums totaling $10,000,000 or more, as specified, to submit a biennial report to the Insurance Commissioner on its residential property experience data for the previous 2 years for policies written in California and to include in the report information on fire- or wildfire-incurred losses, as specified. Existing law prohibits an insurer, for one year after the declaration of a state of emergency, from canceling or refusing to renew a residential property insurance policy solely because the property is in an area in which a wildfire occurred. This bill would create the California Wildfire Insurance Authority to serve as a marketplace for catastrophic wildfire insurance. The bill would require the authority to be formed as a nonprofit entity that is privately funded and publicly managed. Under the bill, the authority would be governed by a 3-member governing board consisting of the Governor, the Treasurer, and the Insurance Commissioner, or their designees. The bill would also require the Speaker of the Assembly and the Chairperson of the Senate Committee on Rules, or their designees, to serve as nonvoting, ex officio members of the board. The bill would require the authority to be advised by an advisory panel consisting of members appointed by the Governor, the commissioner, the Speaker of the Assembly, and the Chairperson of the Senate Committee on Rules, as specified. This bill would require the Department of Insurance to promulgate regulations to govern the approval and regulation of catastrophic wildfire insurance policies and would prohibit, on and after January 1, 2023, a policy of residential or commercial property insurance from being issued, amended, or renewed by an insurer unless the named insured is offered coverage for loss or damage caused by a catastrophic wildfire. The bill would require an insurer to provide a discount of up to 20% on catastrophic wildfire insurance policy premiums to a residential or commercial property owner who hardens their property and would authorize the policy to contain a deductible. The bill would require the commissioner to approve all catastrophic wildfire insurance policy rates, discounts, and deductibles. This bill would establish the Catastrophic Wildfire Insurance Fund to provide a stable and ongoing source of reimbursement to participating insurers for their catastrophic wildfire losses. Under the bill, the fund would be financed by state contributions, revenue bonds, assessments, and other investment strategies approved by the commissioner. This bill would establish the California Wildfire Protection Program to provide home inspections for residential property owners who own homes located in high fire risk areas, and to provide recommendations on how to harden those homes to protect against wildfires. Under the bill, the program would offer grants to residential property owners for costs associated with the recommended home hardening improvements.