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Committee advances measure to expand financing tools for California FAIR Plan
Summary
AB 226 would allow the California Infrastructure and Economic Development Bank (IBank) to accept FAIR Plan bond proceeds and streamline the FAIR Plan's access to liquidity; supporters said it would strengthen insurer-of-last-resort capacity amid wildfire risks and the bill was placed on the suspense file and later recorded as due pass.
Assemblymember Alvarez presented AB 226, which would expand the California Infrastructure and Economic Development Banks (IBank) ability to receive bond proceeds and related revenues and would streamline access to liquidity for the California FAIR Plan. Alvarez said the bills fiscal impact is "negligible" to taxpayers because issuance costs would be borne by the bonds and reimbursed. He said the bill would help stabilize the property-insurance market amid wildfire losses and avoid disaster-related fiscal risk.
Andrew Deller of the Department of Insurance, speaking for Insurance Commissioner Ricardo Lara, said the measure would give the FAIR Plan another financial tool to ensure timely claim payments after disasters and aligned with the commissioners sustainable insurance strategy. Industry groups including the California Building Industry Association, Home Building Alliance, SPUR and Habitat for Humanity California voiced support.
Assemblymember Calderon, a coauthor, said the FAIR Plan had become overexposed in specific areas and that AB 226 would add tools to preserve solvency. The committee placed AB 226 on the suspense file for consideration later in the hearing; at the suspense hearing the committee substituted a motion and returned a due-pass recommendation on the roll call.
