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<ns0:Id>20250SB__087898AMD</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-01-06</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-04-06</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Pérez</ns0:AuthorText>
<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_OPPOSITE">(Principal coauthor: Assembly Member Harabedian)</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Allen)</ns0:AuthorText>
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<ns0:Title> An act to add Article 15.6 (commencing with Section 1078) to Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to insurance. </ns0:Title>
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<ns0:Subject>Insurance business practices.</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 regulations prescribe specified deadlines by which an insurer is required to, among other things, respond to a notice of claim, accept or deny a claim, in whole or in part, and, upon acceptance of a claim in whole or in part, tender payment or otherwise take action to perform its obligation, as specified.</html:p>
<html:p>This bill, with respect to fire insurance claims arising after January 1, 2027, would codify specified provisions of the regulations prescribing the deadlines above. The bill would also make an insurer that does not comply with the deadlines liable to the insured for interest on the amount of the accepted claim, in whole or in part, at the rate of 20% per
year, together with reasonable and necessary attorney’s fees, in addition to the amount the insured is entitled to under the policy.</html:p>
<html:p>This bill would require, by January 2028, and quarterly thereafter, an insurer that offers or sells fire insurance in this state to provide a prompt-payment compliance data report in accordance with the above-described provisions to the department, as provided. The bill would require a corporate officer of the insurer to sign the report and would subject a corporate officer who knowingly provides false information in
the report to an administrative penalty, as specified. Commencing July 1, 2028, the bill would require the department to compile the information and publish a quarterly report on its internet website that details each insurer’s prompt-payment compliance data, as specified. </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 15.6 (commencing with Section 1078) is added to Chapter 1 of Part 2 of Division 1 of the
<ns0:DocName>Insurance Code</ns0:DocName>
, to read:
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<ns0:Num>15.6.</ns0:Num>
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<ns0:LawHeadingText>Prompt-Payment Compliance</ns0:LawHeadingText>
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<ns0:Num>1078.</ns0:Num>
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(a)
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(1)
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By January 2028, and quarterly thereafter, an insurer that offers or sells fire insurance in this state shall provide a prompt-payment compliance data report to the department, including all of the following:
</html:p>
<html:p>
(A)
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Total number of fire insurance claims received.
</html:p>
<html:p>
(B)
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The number of claims handled in compliance with the deadlines provided in Section 1078.1.
</html:p>
<html:p>
(C)
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The number of claims that were not handled in compliance with the deadlines provided in Section 1078.1.
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<html:p>
(D)
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The number of days late that the insurer responded to an individual claim pursuant to subdivisions (a), (b), and (c) of Section 1078.1.
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<html:p>
(E)
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Total dollar amount of late
payments pursuant to Section 1078.1.
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<html:p>
(F)
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Total dollar amount of interest paid pursuant to Section 1078.1.
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<html:p>
(2)
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Each quarterly report shall provide prompt-payment compliance data from the same quarter of the preceding year.
</html:p>
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(b)
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The report submitted to the department pursuant to subdivision (a) shall include all of the following:
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(1)
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The report shall be signed by a corporate officer. Any corporate officer who knowingly provides false information in the report
submitted to the department shall be subject to an administrative penalty in an amount up to one thousand five hundred dollars ($1,500) to be assessed by the commissioner, in addition to other remedies available to the department.
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(2)
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The name and title of the corporate officer signing the report.
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(3)
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Certification by the corporate officer signing the report that the report is accurate and complete.
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(c)
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The department shall compile the information received under subdivision (a) and publish a quarterly report on its internet website that details each insurer’s prompt-payment compliance data. The data shall be displayed in a manner that is specific to each insurer. The department shall publish the first quarterly report by July 1, 2028,
and shall publish an updated report every three months thereafter.
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<ns0:Num>1078.1.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Upon receiving notice of a fire insurance claim, every insurer shall immediately, but in no event more than 15 calendar days later, do the following unless the notice of claim received is a notice of legal action:
</html:p>
<html:p>
(1)
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Acknowledge receipt of the notice to the claimant unless payment is made within that period of time.
</html:p>
<html:p>
(2)
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Provide the claimant with the necessary forms, instructions, and reasonable assistance, including, but not limited to, specifying the information the claimant is required to provide for proof of claim.
</html:p>
<html:p>
(3)
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Begin any
necessary investigation of the claim.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
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Upon receiving proof of a fire insurance claim, an insurer shall immediately, but in no event more than 40 calendar days later, accept or deny the claim, in whole or in part. The amounts accepted, denied, and undetermined shall be clearly documented in writing to the claimant.
</html:p>
<html:p>
(2)
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If more than 40 days is required to determine whether a claim will be accepted or denied, in whole or in part, the insurer shall provide the claimant with written notice of the need for additional time within 40 days. The written notice shall specify any additional information the insurer requires in order to make a determination and state any continuing factual reasons for the insurer’s inability to make a determination. Thereafter, written notice
shall be provided every 30 calendar days until a determination is made or notice of legal action is served. If the determination cannot be made until some future event occurs, then the insurer may comply with this continuing notice requirement by advising the claimant of the situation and providing an estimate as to when the determination can be made.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Any amount not identified by the insurer as accepted, denied, or undetermined shall be deemed accepted. Payment deadlines shall apply and late payment interest shall accrue.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Upon acceptance of a fire insurance claim, in whole or in part, an insurer shall immediately, but in no event more than 30 calendar days later, tender payment or otherwise take action to perform its claim obligation. The amount of the claim to be tendered
is the amount that has been accepted by the insurer.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
An insurer that does not comply with subdivision (b) or (c) shall be liable to the insured for interest on the amount of the accepted claim, in whole or in part, at the rate of 20 percent per annum, together with reasonable and necessary attorney’s fees, in addition to the amount the insured is entitled to under the policy.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
This section does not prevent the award of prejudgment interest on the amount of the claim, as provided by law.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The obligations on fire insurers in
this section are in addition to the fair claims settlement regulations that apply to all insurers.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
If the commissioner promulgates regulations shortening the timelines in this section, the shorter timelines shall apply.
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<html:p>
(h)
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This section applies only to a claim that arises on or after January 1, 2027.
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