AB 2724: Insurance: distressed areas.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and generally regulates the business of insurance in the state. Existing law establishes the California FAIR Plan Association, a joint reinsurance association in which all insurers licensed to write basic property insurance participate to administer a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing regulations authorize insurers, in distressed areas and for properties insured by the FAIR Plan that are exposed to wildfire risk, to use catastrophe modeling, as specified. Under existing regulations, a distressed area includes undermarketed ZIP Codes and distressed counties.

Existing law requires the State Fire Marshal to classify lands into fire hazard severity zones in accordance with state responsibility areas and local responsibility areas, as specified. Existing regulations establish and record wildland-urban interface (WUI) areas in accordance with these classifications.

This bill would require the department, on or before July 1, 2027, and yearly thereafter, to conduct a review and update distressed areas based on updates to the WUI designated areas. As part of the review, the bill would require the department, among other things, to hold at least one public meeting to allow interested persons to submit suggestions for additional factors to consider when evaluating FAIR Plan percentages in WUI areas. The bill would require the department, on or before January 1, 2028, to publish a list of ZIP Codes in WUI areas on its internet website and to provide this information to certain committees in the Legislature.

Existing law requires an admitted insurer with written California premiums totaling $10,000,000 or more to submit a report with specified fire risk information on its residential property policies to the commissioner on or before April 1, 2020, and every 2 years thereafter. Existing law subjects an admitted insurer that fails to submit a report to a civil penalty to be fixed by the commissioner, not to exceed $5,000, or $10,000 if the act was willful.

This bill would instead subject an admitted insurer that fails to submit a report to a civil penalty to be fixed by the commissioner, not to exceed $5,000 for each 30-day period that the insurer is not in compliance, or $10,000 for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of $100,000 if the act was willful. The bill would authorize the commissioner to consider an insurer’s violation of these provisions as the basis for other enforcement action against an insurer.

Sponsors

Sponsors by party (alphabetical): Democratic 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. September 30, 2026Chaptered by Secretary of State - Chapter 961, Statutes of 2026.
2. September 30, 2026Approved by the Governor.
3. September 10, 2026Enrolled and presented to the Governor at 3 p.m.
4. August 30, 2026Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 64. Noes 2. Page 6926.).
5. August 30, 2026In Assembly. Concurrence in Senate amendments pending.
6. August 30, 2026Read third time. Passed. Ordered to the Assembly. (Ayes 38. Noes 0.).
7. August 24, 2026Read second time. Ordered to third reading.
8. August 20, 2026Read third time and amended. Ordered to second reading.
9. August 13, 2026Read second time. Ordered to third reading.
10. August 13, 2026From committee: Do pass. (Ayes 7. Noes 0.) (August 13).
11. August 3, 2026In committee: Referred to APPR. suspense file.
12. June 25, 2026From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 24). Re-referred to Com. on APPR.