A bill that aims to enable the California FAIR Plan to seek additional claims paying capacity is making its way through state Legislature.
Assembly Bill 226, the FAIR Plan Stabilization Act, passed out of the Assembly 72-0.
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This bill, authored by Assemblymembers Lisa Calderon (D-Whittier) and David Alvarez (D-San Diego), would allow the FAIR Plan to seek additional claims paying capacity, either through the issuance of bonds or a line of credit.
Advocates of the bill say these financial tools are a resource to request to avoid potential future assessments. Following the devastating wildfires in Los Angeles, the FAIR Plan requested to assess member insurance $1 billion.
Related: Insurer Payouts Now at $12B for LA Wildfires, Report Shows
California Insurance Commissioner Ricardo Lara in February approved the assessment on admitted market insurers to cover claims from the L.A. wildfires. The FAIR Plan reported it has paid more than $914 million to policyholders, including advance payments, to cover claims related to the Palisades and Eaton fires.
Since its introduction, the bill has added 15 Assembly Co-Authors. AB 226 is also supported by Lara and consumer advocates.
The bill is now headed to the Senate for consideration.
Topics California