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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Bauer-Kahan</ns0:AuthorText>
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<ns0:Name>Bauer-Kahan</ns0:Name>
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<ns0:Title> An act to add Article 12.5 (commencing with Section 979) to Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to insurance. </ns0:Title>
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<ns0:Subject>Catastrophe modeling: distressed areas.</ns0:Subject>
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<html:p>Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and generally regulates the business of insurance in the state. Existing law establishes the California FAIR Plan Association, a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing regulations authorize insurers, in distressed areas and for properties insured by the FAIR Plan that are exposed to wildfire risk, to use catastrophe modeling, as specified. Under existing regulations, a distressed area includes undermarketed ZIP Codes and distressed counties.</html:p>
<html:p>For purposes of using catastrophe modeling in insurer commitments, this bill would state
that a distressed area includes only undermarketed ZIP Codes. The bill would provide that an undermarketed ZIP Code is a ZIP Code, as determined by the commissioner, that, among other things, has at least 10% of the sum of residential properties in the ZIP Code that are insured by the FAIR Plan, as specified. The bill would require the department to review and revise any regulations as necessary to implement these provisions.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Article 12.5 (commencing with Section 979) is added to Chapter 1 of Part 2 of Division 1 of the
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, to read:
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<ns0:Num>12.5.</ns0:Num>
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<ns0:LawHeadingText>Catastrophe Modeling</ns0:LawHeadingText>
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<ns0:Num>979.</ns0:Num>
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(a)
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For purposes of using catastrophe modeling in insurer commitments pursuant to Section 2644.4.8 of Title 10 of the California Code of Regulations, a distressed area shall include only undermarketed ZIP Codes.
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(b)
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For purposes of this section, “undermarketed ZIP Code” means a ZIP Code, as determined by the commissioner, that at least partially overlaps a high or very high fire hazard severity zone as shown on current maps published by the Department of Forestry and Fire Protection and in which the ZIP Code has at least 10 percent of the sum of the following that are insured by the FAIR Plan:
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(1)
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The number of residential properties in the ZIP Code that are insured by the FAIR
Plan.
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(2)
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The number of residential properties in the ZIP Code that are insured in the voluntary market by admitted insurers under a policy of qualifying residential property insurance.
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(c)
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The commissioner shall publish an initial bulletin containing a list of the undermarketed ZIP Codes determined under this section. The commissioner shall, by subsequent bulletins, update the list of undermarketed ZIP Codes as conditions warrant, but in any event no less frequently than once per year.
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(d)
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The department shall review and revise regulations as necessary to implement this section.
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