Bill > AB226

This bill addresses the California FAIR Plan Association's financial capabilities by authorizing it to request the California Infrastructure and Economic Development Bank (I-Bank) to issue bonds to finance claims and increase its liquidity and claims-paying capacity. The bill allows the FAIR Plan, with prior approval from the Insurance Commissioner, to request bond issuance, enter into loan and line of credit agreements, and secure these financial instruments through pledges of its assets. If the association cannot meet its repayment obligations, it will be required to assess its members to ensure full payment of all financial commitments. The bill specifically states that these bonds will not be considered a state debt and will be payable solely from the association's revenues and assets. The legislation is motivated by California's current property insurance availability crisis, where consumers are increasingly relying on the FAIR Plan for property insurance due to limited options in the normal insurance market. The bill is deemed an urgency statute, meaning it will take effect immediately to help the FAIR Plan access financial tools quickly and provide more insurance coverage options for California residents facing challenges in obtaining property insurance.

Budget and Finance, Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB226