California FAIR Plan Association.

New Section 1.5 provides an alternative version of Section 10095 that merges changes from AB 1680 and AB 69. It becomes operative only if both bills are enacted and effective on or before January 1, 2027, each amends Section 10095, and AB 1680 is enacted after AB 69 (in which case the original Section 1 of this bill would not take effect).

In the alternative version (Section 1.5), subdivision (e)(2) requires the association to mandate that registered agents and brokers complete a department-approved 'Brokers and FAIR Plan course' training them on their responsibility to advise policyholders about voluntary market options.

In the alternative version, new subdivisions (i)(2) and (j)(2) allow the association, on and after January 1, 2028, to share relevant policyholder information (including agent or broker of record) with insurers participating in the homeowners and commercial clearinghouse programs so they can offer policies directly. If an agent or broker of record is listed, the insurer must make a simultaneous offer to both the agent/broker and the policyholder.

In the original Section 1 (subdivision g)(1), the phrase 'or other legally binding applicable rules and guidelines prescribed by the commissioner or their designee' was narrowed to 'or other legally binding applicable rules,' removing the reference to guidelines prescribed by the commissioner. This narrows the scope of what triggers corrective action obligations.

In the alternative version, new subdivision (l) requires every admitted and nonadmitted insurer participating in the clearinghouse programs to report quarterly, starting May 1, 2027, the number of policies issued to FAIR Plan policyholders as a result of participation. The association must report aggregated numbers within 30 days to the commissioner, both insurance committees, and post them on its public website.

In the alternative version, subdivision (g)(1) clarifies the commissioner's delegation authority by changing 'or their designee' to 'or any person designated by the commissioner, their designee.' Subdivision (h) changes 'association' to 'plan association' in two places.

The list of items whose violation can trigger mandatory corrective actions now explicitly includes 'the plan of operation,' meaning the association can be required to fix violations of its own approved operating plan, not just statutes, regulations, and accounting principles.

The phrase 'other applicable rules and guidelines' was changed to 'other legally binding applicable rules and guidelines,' narrowing the scope to only those rules that are legally enforceable rather than any guideline the commissioner might issue.

The penalty provision for failing to take corrective action was corrected from 'for each violation. failure to take corrective action' (which was redundant and grammatically broken) to 'for each failure to take corrective action,' clarifying that the up-to-$20,000 penalty applies per instance of non-compliance.

New subdivision (g)(2) allows the association to request extensions of 30 calendar days (or greater extensions approved by the commissioner) for good cause to comply with corrective actions. The commissioner may deny a request if it is not made in good faith or there has not been a good faith effort to comply. 'Good cause' includes circumstances beyond the association's control, a showing of good faith effort, or other factors agreed to by the commissioner.

New subdivision (g)(3) specifies that failure to take corrective action is determined per specific category of corrective action requested as described in the examination, meaning penalties are assessed individually for each category rather than as a single aggregate violation.

Removed the word 'statutory' before 'accounting principles' in the corrective action provision, broadening the range of accounting standards that can be cited as a basis for requiring corrective action beyond just statutory accounting principles.

Replaced references to 'fines' with 'penalties' throughout the bill and simplified 'a person designated by the commissioner' to 'their designee' in several places for consistency.

Changed the association's obligation from complying with recommendations identified in examination reports to taking corrective actions as specified by the commissioner or their designee to rectify violations. This gives the commissioner direct authority over what corrective steps must be taken rather than leaving it to the association to determine how to address findings.

Changed the penalty language from 'fined not more than twenty thousand dollars' to 'subject to a penalty of not more than twenty thousand dollars,' aligning the terminology with the broader civil penalty framework in Section 10100.5.

Broadened the scope of enforceable standards from 'other applicable rules' to 'other applicable rules and guidelines prescribed by the commissioner or their designee,' allowing the commissioner to create additional binding guidelines beyond existing statutes, regulations, and statutory accounting principles.

Added the word 'prior' before 'approval' in subdivision (g) regarding amendments to the plan of operation, clarifying that the association must obtain commissioner approval before making changes rather than after the fact.

Section 10095(g) now requires the association to 'take corrective actions to correct violations of applicable statutes, regulations, statutory accounting principles, or other applicable rules' rather than simply 'comply with the recommendations' of an examination report. This makes the compliance obligation more specific and tied to actual legal violations.

Section 10095(g) removes the phrase 'or otherwise violates this chapter' from the penalty trigger, so the $20,000 fine now applies only when the association fails to take corrective action within the agreed timeframe, rather than for any violation of the chapter.

Section 10100.4(b) no longer authorizes the commissioner to require the association to offer a comprehensive homeowners' insurance policy for persons with an insurable interest in real or tangible personal property. The provision is narrowed to only require fair rental value coverage under the renters' property insurance program.

Section 10095(g) now imposes a specific fine of not more than $20,000 for each violation when the association fails to adopt recommendations from an examination or operational report within a timeframe agreed upon by the commissioner. The fine may be in addition to any other penalties provided by law.

Section 10100.5(c)(1) was expanded so that the commissioner's order-to-show-cause enforcement procedure now explicitly applies when 'the association has violated subdivision (g) of Section 10095,' not just general chapter violations.

Terminology cleanups throughout: 'homeowners' changed to 'homeowners'' (possessive form), 'plan association' changed to 'association' in multiple places, and a clarifying line referencing fair rental value coverage was inserted in Section 10100.4(b).