(Sacramento, CA)— Assembly Bill (AB) 226, the FAIR Plan Stabilization Act, authored by Assemblymembers Lisa Calderon (D-Whittier) and David Alvarez (D-San Diego), passed out of the Assembly 72-0 and is now headed to the Senate for consideration.
This urgent measure would allow the FAIR Plan to seek additional claims paying capacity, either through the issuance of bonds or a line of credit. These financial tools are a resource to request in order to avoid potential future assessments.
Following the devastating LA Wildfires, the FAIR Plan requested to assess their member companies for $1 billion—the first time in 30 years. AB 226 reaffirms California’s commitment to helping those most impacted by the recent disasters, as the FAIR Plan supports a large number of policyholders in the areas in and surrounding the Palisades and Eaton fires.
Since its introduction, the bill has garnered broad support, including 15 Assembly Co-Authors, and is one of Assembly Speaker Rivas’ priority bills in the Legislature. AB 226 is also supported by Insurance Commissioner Ricardo Lara, consumer advocates and industry stakeholders who recognize the urgent need for a more resilient insurance framework in California.
Assembly Speaker Robert Rivas stated, “In January, I stood united with many of my Assembly colleagues and pledged to do everything in our power to support Los Angeles’ recovery after the devastating firestorms. This bill and the others recently passed by our Assembly will provide critical assistance, both to Angelenos and all residents of California, so that people have a path to quick recovery after disasters.”
"AB 226 stabilizes the FAIR Plan by allowing bonds to spread costs over time, preventing sudden insurer assessments that could spike premiums or bankrupt small companies,” said Assemblymember Lisa Calderon, Chair of the Assembly Insurance Committee. “This urgent fix protects homeowners and safeguards our insurance market from catastrophic failure. I look forward to seeing this critical bill make its way through the Senate."
“I am pleased to see AB 226 pass off the Assembly Floor with strong bipartisan support. This bill ensures the FAIR Plan has the financial tools it needs to meet growing demand and avoid abrupt assessments that drive up premiums for working families,” said Assemblymember David Alvarez. “AB 226 is a responsible and timely solution that puts stability and affordability at the forefront.”
As AB 226 continues to move through the Legislative process, visit leginfo.legislature.ca.gov for the latest updates and to track other pieces of legislation
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Contact: Lucia Saldivar, lucia.saldivar@asm.ca.gov