Assembly panel: Fair Plan clearinghouse has not meaningfully depopulated residual market; members push for more data and statutory fixes

SACRAMENTO — The California State Assembly Insurance Committee held an outcomes review of AB 3012 on July 1 to examine whether the Fair Plan’s residential clearinghouse is helping policyholders return to the voluntary insurance market. Committee members, Department of Insurance officials and industry witnesses agreed the program has fallen short of expectations and proposed data, operational and statutory changes to improve results.

“Simply stated, the legislature created the clearinghouse program with the intent of depopulating the fair plan and providing a pathway for policyholders to return to the voluntary market,” the committee chair said in opening remarks. The committee focused on why the clearinghouse has not produced more transfers to private insurers and what fixes could help.

Josephine Figueroa, Deputy Commissioner and Legislative Director at the California Department of Insurance, told the committee the department’s oversight role is limited because the Fair Plan manages and operates the clearinghouse. The department has not received formal consumer complaints tied specifically to clearinghouse operations, Figueroa said, but it has identified structural barriers that limit effectiveness: low insurer…