New Bill Aims to Revolutionize the California FAIR Plan

A bill aimed at reforming the California FAIR Plan was introduced on Monday, focusing on enhancing customer service, claims processes, and transparency.

Assembly Bill 1680, known as the Make It FAIR Act, is authored by Assemblymember Lisa Calderon and sponsored by California Insurance Commissioner Ricardo Lara. This legislation seeks to strengthen claims handling, broaden coverage options, and improve transparency for survivors of wildfires.

Related: California Bill Would Require Insurer Claims Handling Plans, and Double Penalties

The act implements reforms identified in a recent Report of Examination by the California Department of Insurance (CDI). This report highlighted that the FAIR Plan had not complied with 17 recommendations concerning financial stability, corporate governance, and consumer protections.

According to the CDI, the examination uncovered systemic issues that left wildfire survivors facing delays, denials, and inconsistent claims decisions, particularly following the devastating 2025 Los Angeles wildfires. The total insurance claims paid from these wildfires reached an astonishing $22.4 billion. Despite Commissioner Lara’s efforts to enhance the FAIR Plan’s performance and accountability, many wildfire survivors continue to report significant challenges in accessing their benefits. Delays, denials, and miscommunication have been the most common complaints lodged with the CDI since the wildfires.

Related: The Return Period for An LA Wildfire-Scale Event May Be Shorter Than You Think

AB 1680 mandates that the FAIR Plan undertake substantial operational and governance changes to better serve Californians while market improvements are being implemented. Key provisions of the bill include:

• Introducing a more comprehensive homeowners coverage option, similar to what other insurance companies offer. Currently, FAIR Plan residential policyholders must purchase separate policies for water damage, liability for injuries on their property, and other standard coverages.
• Increasing staffing levels to manage the growing operational demands.
• Streamlining the process for policyholders to transition back to the regular market by enhancing clearinghouse programs established by the state Legislature.
• Developing a three-to-five-year strategic plan to anticipate market changes, improve policy handling, and assist individuals in exiting the FAIR Plan.
• Enhancing transparency by allowing public access to meetings and documents from the FAIR Plan’s Governing Committee and Subcommittees.
• Implementing a formal climate risk assessment and reporting on climate-related financial risks.
• Establishing a formal capital and liquidity management strategy to safeguard against unexpected events, such as major wildfires or storms.

Topics
California

A bill aimed at reforming the California FAIR Plan was introduced on Monday, focusing on enhancing customer service, claims processes, and transparency.

Assembly Bill 1680, known as the Make It FAIR Act, is authored by Assemblymember Lisa Calderon and sponsored by California Insurance Commissioner Ricardo Lara. This legislation seeks to strengthen claims handling, broaden coverage options, and improve transparency for survivors of wildfires.

Related: California Bill Would Require Insurer Claims Handling Plans, and Double Penalties

The act implements reforms identified in a recent Report of Examination by the California Department of Insurance (CDI). This report highlighted that the FAIR Plan had not complied with 17 recommendations concerning financial stability, corporate governance, and consumer protections.

According to the CDI, the examination uncovered systemic issues that left wildfire survivors facing delays, denials, and inconsistent claims decisions, particularly following the devastating 2025 Los Angeles wildfires. The total insurance claims paid from these wildfires reached an astonishing $22.4 billion. Despite Commissioner Lara’s efforts to enhance the FAIR Plan’s performance and accountability, many wildfire survivors continue to report significant challenges in accessing their benefits. Delays, denials, and miscommunication have been the most common complaints lodged with the CDI since the wildfires.

Related: The Return Period for An LA Wildfire-Scale Event May Be Shorter Than You Think

AB 1680 mandates that the FAIR Plan undertake substantial operational and governance changes to better serve Californians while market improvements are being implemented. Key provisions of the bill include:

• Introducing a more comprehensive homeowners coverage option, similar to what other insurance companies offer. Currently, FAIR Plan residential policyholders must purchase separate policies for water damage, liability for injuries on their property, and other standard coverages.
• Increasing staffing levels to manage the growing operational demands.
• Streamlining the process for policyholders to transition back to the regular market by enhancing clearinghouse programs established by the state Legislature.
• Developing a three-to-five-year strategic plan to anticipate market changes, improve policy handling, and assist individuals in exiting the FAIR Plan.
• Enhancing transparency by allowing public access to meetings and documents from the FAIR Plan’s Governing Committee and Subcommittees.
• Implementing a formal climate risk assessment and reporting on climate-related financial risks.
• Establishing a formal capital and liquidity management strategy to safeguard against unexpected events, such as major wildfires or storms.

Topics
California