PIFC Victories

AB 2367 

Early this year, PIFC opposed AB 2367. AB 2367 (Gonzalez) died in the Assembly Insurance Committee in early May. 

AB 2367 would have established a task force to develop community and home hardening standards – and would have required an admitted insurer to write or renew a policy for an existing property that is certified by the Task Force. We know you don’t want to nonrenew your policyholders. But is forcing you to take on unreasonable risk – indefinitely – really the way to go? 

Insurance coverage mandates, such as the one proposed by this measure, threaten insurance availability for all Californians. History has demonstrated that when states try to force companies to sell insurance at an inadequate price, with uncontrollable
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Business Interruption Insurance Coverage

While Californians stay home to reduce the risk of transmission of COVID-19, businesses are starting to grapple with income loss. In commercial insurance, a policy with business interruption (BI) can cover lost profits, rent, utilities and clean-up costs. It less often provides transition expenses and payroll. About 30% of small businesses (less than 50 employees) have BI coverage. 

Understandably business owners are asking questions about business interruption insurance, particularly if they are covered during the stay at home order. However, typical BI coverage is only triggered by physical damage to a property and covers the period to repair the damage.   

BI covers physical damage because it is temporary and repairable. Viruses, such as COVID-19, are not insurable because they are enduring and incurable.
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PIFPAC Webinars

As PIFC staff transitioned to telework, we were able to host three webinars in April and May for PIFPAC members. We took advantage of the opportunity to connect with PIFPAC members and share what was happening here in Sacramento.  

Our PIFC lobbyists gave an in-depth update as to what is happening in the legislature and our PIFC Political Director let us know what happened in the March primary as well as what to expect in November. Tracey Rivera (former PIFPAC Board Member and current Membership Committee member), Kelly Lux (PIFPAC Board Member), and Matt Rinn (Membership Committee member) were each able to join a webinar and speak to the importance of being a contributor – especially now! Since State Farm was not
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Defensible (Policy) Space

PIFC also supported two bills by Assemblymember Laura Friedman: AB 3074 and AB 3164. AB 3074 enhances existing defensible space protections through the creation of an ember-resistant zone (0-5 feet from the structure) for homes in very high fire hazard areas. AB 3164 require CAL FIRE to develop a wildland-urban interface wildfire risk model to determine the risk for a community or parcel within certain areas of the state. The bill will also establish an advisory workgroup that includes, among others, representatives from insurers and insurance research organizations. 

PIFC is committed to supporting new policies that help reduce the risks associated with devastating wildfires that have become part of California’s “new normal”. 

AB 2167 + SB 292 – Insurance Market Action Plan

PIFC supported AB 2167 (Daly), which passed to the Senate, and SB 292 (Rubio), which is pending in Assembly Governmental Organization Committee. These bills must be enacted jointly to become operative. Together they provide a comprehensive framework to increase the availability of admitted market insurance in high fire-threat areas and help reduce risk and loss through individual home hardening and community-wide wildfire mitigation.  

Major provisions of these bills:  

Establish the Insurance Market Action Plan (IMAP) program and authorize an insurer to submit an IMAP filing, which would be subject to approval by the Department of Insurance.  
Require, as part of an IMAP filing, an insurer to commit to offer new and renewal residential property insurance
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COVID-19 and CA Department of Insurance – Public Notices

Essential Service Guidance

The United States Department of Homeland Security released guidance on essential critical infrastructure workers March 19th.  Insurance services are listed as essential within the section on financial services.  For more information, the guide is available here: https://www.cisa.gov/identifying-critical-infrastructure-during-covid-19.  California Insurance Commissioner Ricardo Lara issued further guidance on March 20th, that insurance services are included as essential services.  We know many of you are taking important precautions like working remotely, or closing your insurance offices to the public, while still continuing to provide great service to your clients, Commissioner Lara’s bulletin is available here: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/CDI-Essential-Services-Notice-Final.pdf.

Commissioner Lara did reiterate the importance of timely processing of payments as people shelter
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March 3rd Primary Results

Politically speaking, PIFC saw a strong showing in the March primary. This primary was unprecedented; the Legislature moved the primary to March 2020, in order to position California to impact the presidential election. That meant early candidate interviews and early funding decisions. Effective campaign activism aids in helping reasonable people get elected. If we leave elections to others, they will control election outcomes, and it is important we do not allow that to happen.

PIFPAC Board Members, staff, and member company representatives conducted several all-day candidate interview sessions in November 2019.  PIFC staff is extraordinarily grateful for the support of, and engagement in, this process by the member companies and PIFPAC
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On the Defense

The legislative bill introduction deadline was February 21, 2020, which means we now have an initial understanding of the “bad bills” related to wildfires and homeowners insurance the industry will face this year. However, there are also many placeholder bills (i.e., spot bills) that do not yet have substantive language, which may be amended in a manner that negatively affects the insurance industry. PIFC staff will monitor these spot bills to see what emerges.

In particular, PIFC has opposed AB 2367, authored by Assemblymember Lorena Gonzalez. Last year, she authored AB 5, which fundamentally changed the way independent contractors operate in California, but our advocates were able to communicate the
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Towing and the Gig Economy

PIFC staff is working on a bill that regulates towers and helps weed out bad actors by creating a licensing requirement.  We are also working with tech companies to make sure that bills impacting the mobility economy, like food-delivery apps, include a perspective from auto insurers.

Last, but certainly not least on the offensive side, PIFC staff continues to submit comments to the California Department of Justice as they create rules surrounding the California Consumer Privacy Act (CCPA) of 2018. Read our latest comments here.

Taking the Heat – Wildfires and Homeowner’s Insurance

On February 12th, Rex and our Senior Legislative Advocate Seren Taylor testified at an informational hearing for the Senate Insurance Committee, titled Wildfires and Homeowners Insurance: Availability in High Risk Communities. Testifying alongside Rex and Seren were representatives from the California Department of Insurance (CDI). While representatives from CDI tried to focus on the Insurance Commissioner’s town halls and people’s emotions regarding non-renewals, they did not have strong arguments, data, or any concrete solutions to offer.  Committee members seemed unimpressed with CDI and asked them a lot of questions focused on the lack of any meaningful statewide mitigation standards or data to support their effectiveness in reducing property damage
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