20250SB__052397AMD INTRODUCED 2025-02-20 AMENDED_SENATE 2025-03-24 AMENDED_SENATE 2026-01-05 2025 SB AMD Introduced by Senator Seyarto LEAD_AUTHOR SENATE Seyarto

An act to add

Section to the Insurance Code, relating to insurance. insurance Fire insurance. Existing law generally regulates classes of insurance, including residential property insurance. Existing law prescribes the standard form for fire insurance policies covering property. This bill would, under a homeowners’ insurance policy, authorize an insurer to differentiate the risk of an internal fire from the risk of an external fire for the purposes of determining coverage. The bill would define terms for purposes of this provision.

Existing law establishes the California Earthquake Authority (CEA), administered under the authority of the Insurance Commissioner and governed by a 3-member governing board, to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. Under existing law, the CEA’s governing board is advised by an appointed advisory panel. </xhtml:p><xhtml:p>This bill would require the CEA to establish a commission, to convene no later than April 1, 2026, to consider expanding the authority.

The bill would require the commission to be composed of the board members or their designees. The bill would also require the commission to explore specified topics, including financial estimates for statewide earthquake threats. The bill would require the commission to conclude its work no later than April 1, 2027, and to submit a report to the Legislature no later than June 1, 2027, on the feasibility of creating a disaster insurance program in California.

The bill would repeal these provisions on June 1, 2031.</xhtml:p>"?> MAJORITY NO NO NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION 1.

Section is added to the Insurance Code , to read: 2059. (

a) Under a homeowners’ insurance policy, an insurer may differentiate the risk of an internal fire from the risk of an external fire for the purposes of determining coverage. (

b) For purposes of this section, the following

definitions apply: (1) “External fire” means a fire that started outside of the insured property. An external fire may include, but is not limited to, wildfires or fires that began on a neighboring property that then spread to the insured property. (2) “Internal fire” means a fire that started within the insured property.

An internal fire may include, but is not limited to, kitchen fires, electrical fires, or fires caused by negligence on the insured property. <caml:Num>SECTION 1.</caml:Num><caml:ActionLine action="IS_ADDED" xlink:href="urn:caml:codes:INS:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2F%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'10089.56'%5D)" xlink:label="fractionType: LAW_SECTION" xlink:type="locator">Section 10089.56 is added to the <caml:DocName>Insurance Code</caml:DocName>, <caml:Positioning>immediately following

Section 10089.55</caml:Positioning>, to read:</caml:ActionLine><caml:Fragment><caml:LawSection id="id_78E81EEE-5A44-4A88-BA1D-581934D877A1"><caml:Num>10089.56.</caml:Num><caml:LawSectionVersion id="id_C80797E5-AEDD-4AD5-B28B-1C6D65F20C71"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>The authority shall establish a commission, to convene no later than April 1, 2026, to consider expanding the authority.</xhtml:p><xhtml:p>(b)<xhtml:span class="EnSpace"/>The commission shall be composed of board members or their designees.</xhtml:p><xhtml:p>(c)<xhtml:span class="EnSpace"/>The commission shall explore both of the following:</xhtml:p><xhtml:p>(1)<xhtml:span class="EnSpace"/>Financial estimates for statewide earthquake threats.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>Potential financial support from federal authorities in a worst-case scenario.</xhtml:p><xhtml:p>(d)<xhtml:span class="EnSpace"/>The commission shall conclude its work no later than April 1, 2027, and shall provide a report to the Legislature no later than June 1, 2027, on the feasibility of creating a disaster insurance program in California.</xhtml:p><xhtml:p>(e)<xhtml:span class="EnSpace"/>The commission shall be supported by authority staff.

The department may provide additional staff if necessary.</xhtml:p><xhtml:p>(f)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/> A report to be submitted pursuant to this

section shall be submitted in compliance with

Section of the Government Code.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>Pursuant to

Section 10231.5 of the Government Code, this

section is repealed on June 1, 2031.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection></caml:Fragment></caml:BillSection>"?>