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.

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.

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.