Assembly Insurance Committee advances AB 226 to let FAIR Plan seek bonds through I‑Bank

The California State Assembly Insurance Committee on Wednesday voted to send AB 226 to the Appropriations Committee, advancing a bill that would allow the Fair Access to Insurance Requirements (FAIR) Plan to request that the California Infrastructure and Economic Development Bank (I‑Bank) issue bonds when the FAIR Plan faces severe financial strain after catastrophic events.

AB 226, authored in part by Assemblymembers Selma and Alvarez, is intended to give the FAIR Plan an additional financing tool so assessments on insurers — which are passed on to consumers — can be spread over a longer period rather than due immediately after a disaster.

The bill’s supporters told the committee the measure aims to stabilize a public safety‑net insurer and reduce sudden, large assessments that can raise costs for homeowners and owners of condominium units. Dan Dunmoyer, president and CEO of the California Building Industry Association, told the committee: “it’s harder and harder to find insurance in this great state.” He said the industry has faced large assessments and noted, “insurers have been assessed a billion dollars since this horrific fires in Los Angeles,” which he said forced carriers to pay sums they had not collected premiums to cover.

Andrew Deller, deputy legislative director for the California Department of Insurance, testified the FAIR Plan was created in 1968 “as a last resort for homeowners unable to find coverage in the private market,” and said AB 226 would give the FAIR Plan access to “bonds, loans, and lines of credit subject to insurance commissioner approval” so it can “continue operating and timely pay consumer claims” following major disasters.

Some public witnesses urged the Legislature to link the bill to broader accountability for utilities and other entities they said influence catastrophic wildfire risk. Will Abrams, a wildfire survivor, told the committee he was “concerned that we’re not connecting some dots between the various pieces of legislation that are moving right now,” and urged lawmakers to consider how utilities’ roles in causing fires affect the insurance market.

Assemblymember Dawn Ates said counties on the Central Coast have seen rapid growth in FAIR Plan enrollment: “Monterey County has seen a 300% growth from 2020 to 2024 in enrollment in the fair plan. Santa Cruz County has seen a 530% growth of enrollment in the fair plan, and San Luis Obispo has seen a 560% growth in enrollment in the fair plan in 4 years.” She said that rapid growth makes FAIR Plan solvency a statewide concern.

Industry groups and public‑housing representatives also spoke in support. Speakers included representatives for the Independent Insurance Agents and Brokers of California, the California Business Roundtable, California Farm Bureau, California Business Properties Association, Zurich Insurance, the California FAIR Plan, the California Association of Realtors, the San Diego Housing Commission and several other industry and housing organizations.

Committee members asked procedural and operational questions about how bond proceeds would be accessed and repaid. The Department of Insurance witness said the insurance commissioner would retain approval authority and offered to follow up with committee staff on technical details.

After the hearing, the committee secretary called the roll and recorded 13 yes votes; the measure was moved to the Assembly Appropriations Committee. Committee staff and bill proponents said the bill has an urgency component and, if enacted, is intended to take effect as soon as it reaches the governor’s desk.

Votes at a glance

AB 226 — Do pass to Appropriations (vote recorded in committee) Outcome: Passed to Appropriations Tally: 13 yes, 0 no, 0 abstain Notes: Committee testimony and roll call indicate insurance commissioner approval would be required before FAIR Plan access to bonds, loans or lines of credit.

Background and context

The FAIR Plan is a state‑mandated insurance option designed as a market of last resort for property owners who cannot secure coverage in the admitted market. Supporters of AB 226 framed the measure as a way to reduce immediate post‑disaster assessments on insurers — assessments that are passed through to policyholders — by allowing the FAIR Plan to seek capital and spread repayment. Supporters also said the bill complements other ongoing regulatory reforms led by the insurance commissioner intended to stabilize California’s insurance market.

What the bill does not do (as discussed in testimony)

- AB 226 does not itself raise or lower insurance rates; witnesses and the author said the tool is intended to spread assessments over time rather than change underwriting or rate authority. - The Department of Insurance would retain oversight and approval authority before any bond or loan access could occur.

Next steps

With the committee vote, AB 226 advances to the Appropriations Committee for further consideration.