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Committee advances AB 226 to let FAIR Plan access bonds, loans to shore up homeowner coverage
Summary
AB 226, presented by Assemblyman Alvarez for Sen. Calderon, would authorize the FAIR Plan to obtain financing through bonds, loans or lines of credit to pay claims after catastrophes and build reserves; the committee advanced the bill to the Senate Insurance Committee.
Assemblyman Eduardo Alvarez presented AB 226 on June 9, a measure authored by Sen. Cal Calderon and Alvarez that would give the FAIR Access to Insurance Requirements (FAIR) Plan authority to obtain financing—such as bonds, loans or lines of credit—to pay claims and build cash reserves ahead of catastrophic loss.
Alvarez told the committee the bill is designed to protect homeowners and condominium owners by providing the FAIR Plan additional tools to manage major losses and to prevent a cascade of insurance failures that could follow disasters. He said the plan would still be required to assess member insurers to repay obligations and emphasized the proposal is a proactive financial backstop.
Steve Cruz of the California Building Industry Association testified in support, saying the bill helps stabilize the insurance market so housing production can continue. Josephine Figueroa, deputy commissioner and legislative director for the Department of Insurance speaking for Insurance Commissioner Ricardo Lara, said the commissioner co‑sponsors the bill and described it as providing tools to ensure the FAIR Plan can meet claim obligations timely during periods of extraordinary loss.
Senators moved the bill and the committee recorded a roll call. AB 226 was advanced out of committee with eight yes votes recorded and no recorded opposition.
The committee record shows broad industry and local‑government support and no lead opposition at the hearing.
