AB-2724 • 2026

Catastrophe modeling: distressed areas.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Bauer-Kahan
Last action: 2026-05-27
Official status: Referred to Com. on INS.
Effective date: Not listed

Plain English Breakdown

The official source does not provide information on what happens if a ZIP Code is no longer considered undermarketed or how public suggestions will be used in determining distressed areas.

Catastrophe Modeling for Distressed Areas

This law changes how California defines 'distressed areas' for insurance purposes, focusing on ZIP Codes where at least 10% of homes are covered by the FAIR Plan and requires yearly updates with public input.

What This Bill Does

Changes the definition of a distressed area to only include undermarketed ZIP Codes.
Defines an undermarketed ZIP Code as one where at least 10% of residential properties are insured by the FAIR Plan.
Requires the Department of Insurance to review and update regulations yearly starting July 1, 2027.
Holds public meetings for people to suggest distressed areas during the yearly reviews.

Who It Names or Affects

Insurance companies that write basic property insurance.
People living in undermarketed ZIP Codes who need insurance coverage.
The Department of Insurance and the FAIR Plan Association.

Terms To Know

FAIR Plan: A program where all insurers work together to provide basic property insurance for people who can't get it elsewhere.
Catastrophe modeling: Using computer programs to predict the impact of disasters on insurance claims and costs.

Limits and Unknowns

The bill does not specify what happens if a ZIP Code is no longer considered undermarketed.
It's unclear how public suggestions will be used in determining distressed areas.

Bill History

2026-05-27 California Legislative Information
Referred to Com. on INS.
2026-05-14 California Legislative Information
In Senate. Read first time. To Com. on RLS. for assignment.
2026-05-14 California Legislative Information
Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0.)
2026-05-07 California Legislative Information
Read second time. Ordered to Consent Calendar.
2026-05-06 California Legislative Information
From committee: Do pass. To Consent Calendar. (Ayes 14. Noes 0.) (May 6).
2026-04-22 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 16. Noes 0.) (April 22). Re-referred to Com. on APPR.
2026-04-20 California Legislative Information
Re-referred to Com. on INS.
2026-04-16 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.
2026-03-16 California Legislative Information
Referred to Com. on INS.
2026-02-21 California Legislative Information
From printer. May be heard in committee March 23.
2026-02-20 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2724, as amended, Bauer-Kahan.
Catastrophe modeling: distressed areas.
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.
For purposes of using catastrophe modeling in insurer commitments, this bill would
state that a distressed area includes only undermarketed ZIP Codes. The bill would provide that an undermarketed ZIP Code is a ZIP Code, as determined by the commissioner, that, among other things, has at least 10% of the sum of residential properties in the ZIP Code that are insured by the FAIR Plan, as specified. The bill would require the department to review and revise any regulations as necessary to implement these provisions.
This bill, on or before July 1, 2027, and yearly thereafter, would require the department to review and update distressed areas. As part of the review and update, the bill would require the department, among other things, to hold at least one public meeting to allow interested persons to submit suggestions for distressed areas, as specified. The bill, on or before January 1, 2028, and yearly thereafter, would require the department to
publish a bulletin with a list of ZIP Codes in distressed areas on its internet website and to provide this information to certain committees in the Legislature.

Current Bill Text

Read the full stored bill text

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