Plain English Breakdown
The official text confirms the removal of 'distressed counties' from the definition but notes that other unspecified criteria ('among other things') apply to undermarketed ZIP Codes.
Changing Rules for Distressed Areas in Insurance
This law changes how California defines distressed areas for insurance purposes by limiting them to undermarketed ZIP Codes and sets new rules for reviewing those areas.
What This Bill Does
- Changes the definition of a distressed area to include only undermarketed ZIP Codes, removing distressed counties from the list.
- Defines an undermarketed ZIP Code as one where at least 10% of residential properties are insured by the FAIR Plan, among other criteria determined by the commissioner.
- Requires the Department of Insurance to update its rules so they match this new definition.
- Orders the department to review and update distressed areas every year starting July 1, 2027.
- Mandates at least one public meeting during each yearly review for people to suggest changes to distressed area lists.
- Requires a list of ZIP Codes in distressed areas to be posted online by January 1, 2028, and sent to legislative committees.
Who It Names or Affects
- The Department of Insurance
- Insurance companies using catastrophe modeling for wildfire risk
- Residents living in undermarketed ZIP Codes insured by the FAIR Plan
Terms To Know
- Catastrophe Modeling
- A method insurers use to predict losses from major events like wildfires.
- FAIR Plan Association
- A program that provides basic property insurance for people who cannot get it through normal channels.
- Undermarketed ZIP Code
- An area determined by the Insurance Commissioner where at least 10% of residential properties are insured by the FAIR Plan, among other criteria.
Limits and Unknowns
- The bill does not state when it officially becomes effective law.
- The text says 'among other things' regarding ZIP Code criteria but does not list all specific requirements for a distressed area.
- The source material does not explain how the public meeting suggestions will be used in final decisions.