Under the provisions of AB 69, brokers will be required to assess whether a policy under the FAIR Plan can be transitioned to a more traditional voluntary market insurance company before its renewal. This mandate is intended to encourage the movement of policies back into the voluntary market, which is often seen as preferable due to wider coverage options and competitive pricing.
Summary
Assembly Bill No. 69, introduced by Assembly Member Calderon, aims to amend the California Insurance Code by adding Section 10095.3. This section outlines new requirements for brokers of record regarding the renewal of insurance policies that have been placed in the California FAIR Plan. The FAIR Plan is designed to provide basic property insurance to individuals who are unable to obtain coverage through traditional avenues, and this bill is part of ongoing efforts to enhance its effectiveness and reduce the number of existing FAIR Plan policies.
Contention
The bill reflects an important shift in how brokers will manage these policy renewals. While proponents argue that this will create a more robust insurance market and provide better options for consumers, concerns may arise around the adequacy of support for individuals currently relying on the FAIR Plan, particularly if not enough voluntary market options are available. Critics might contend that the bill could pressure brokers into potentially inappropriate assessments based solely on market availability rather than the individual needs of their clients.