Bill Text: CA AB2416 | 2023-2024 | Regular Session | Amended
Bill Title: Residential property insurance: wildfire risk.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-05-23 - In Senate. Read first time. To Com. on RLS. for assignment. [AB2416 Detail]
Download: California-2023-AB2416-Amended.html
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Amended
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Assembly
April 22, 2024 |
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Amended
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April 10, 2024 |
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Amended
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March 21, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2416
| Introduced by Assembly Member Connolly |
February 13, 2024 |
An act to add Article 5 (commencing with Section 2095) to Chapter 2 of Part 1 of Division 2 of the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2416, as amended, Connolly.
Residential property insurance: wildfire risk.
Existing law generally regulates classes of insurance, including property and fire insurance. Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the department’s powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitigation, including property-level building hardening measures.
This bill would require the department, on or before January 1, 2026, December 31, 2027, and every 3 years thereafter, to evaluate whether or not to update its regulations to include additional building hardening
measures for property-level mitigation efforts and communitywide wildfire mitigation programs. For its first evaluation, the bill would require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Article 5 (commencing with Section 2095) is added to Chapter 2 of Part 1 of Division 2 of the Insurance Code, to read:Article 5. Reduced Wildfire Risk
2095.
The Legislature finds and declares all of the following:(a) More than 2,000,000 California households, or approximately one in four residential structures in California, are located within or near “high” or “very high” fire hazard severity zones. These households are particularly vulnerable to increasingly catastrophic wildfires that pose urgent threats to lives, property, and resources in California.
(b) The state has invested nearly three billion dollars ($3,000,000,000) since the Budget Act of 2019 into programs and projects to improve forest health and resilience, create fuel breaks, harden homes and communities, and build
resilient lifeline infrastructure to withstand wildfire disasters when they do occur.
(c) Chapter 391 of the Statutes of 2019, which created the California Wildfire Mitigation Program jointly administered by the Office of Emergency Services and the Department of Forestry and Fire Protection, recognized that “California must develop statewide options to encourage cost-effective structure hardening to create fire-resistant homes, businesses, and public buildings within wildfire hazard areas and with a focus on vulnerable communities.”
(d) State support for home hardening incentive programs is especially critical now. California residents are finding homeowners’ insurance in very high risk fire areas to be increasingly difficult and costly to obtain, if coverage is even available.
The Department of Insurance determined that the majority of nonrenewals, refusals to insure, and increased premiums resulted from insurers’ use of wildfire risk models that do not account for wildfire risk reduction or home hardening measures completed by the homeowner or community.
(e) On September 21, 2023, Governor Newsom issued Executive Order No. N-13-23 asking the Insurance Commissioner to take “prompt regulatory action to strengthen and stabilize California’s marketplace for homeowners insurance and commercial property insurance,” including maintaining “the long-term availability of homeowners and commercial property insurance coverage.”
(f) Regular review of and updates to the Department of Insurance’s Safer from Wildfires regulations will advance these goals. The Safer
from Wildfires regulations incentivize homeowners to invest in specified wildfire risk reduction and home hardening measures by requiring admitted insurers to reflect and take into account these measures in their ratings plans. The voluntary home hardening measures included in the Safer from Wildfires regulations provide a higher level of fire protection than what is otherwise required by state law and help contain the spread of wildfires, reduce property damage, save lives, and encourage insurance companies to remain committed to the California insurance market.
(g) It is the intent of the Legislature to further incentivize homeowners to invest in demonstrably effective home hardening measures by requiring the Department of Insurance to periodically review its Safer from
Wildfires regulations and evaluate whether or not to amend the regulations to include additional communitywide mitigation programs and building hardening measures, including use of specified noncombustible construction materials that are included by the Office of the State Fire Marshal on the Building Materials Listing. Noncombustible construction materials, as defined by the California Building Standards Code (Title 24 of the California Code of Regulations), provide the highest level of fire safety among materials included on the Building Materials Listing because these materials do not ignite, even when exposed to high temperatures for extended periods of time. Use of noncombustible construction materials is an effective means of reducing fire-related property damage and the contribution of structures to the spread of wildfires.
(h) The Building Materials Listing includes construction materials that have been tested and analyzed by a laboratory accredited by the Office of the State Fire Marshal to confirm the materials meet established performance and reliability features. For example:
(1) Insulation products identified on the Building Materials Listing in SFM Listing Category 2440 have been tested in accordance with either ASTM International Standard (ASTM) E84 or Underwriters Laboratories, Inc. Standard 723 UL (Standard Test Methods for Surface Burning Characteristics of Building Materials) for flame spread and smoke development, and have a flame spread rating of 0–25 and a smoke developed index of 0–450, also defined as a Class A rating. In addition, select products identified in Category 2440 have been tested for noncombustibility in
accordance with ASTM E136 (Standard Test Method for Assessing Combustibility of Materials Using a Vertical Tube Furnace at 750 degrees Celsius) and have achieved a passing result.
(2) Exterior wall siding and sheathing for Wildland Urban Interface fire areas identified on the Building Materials Listing in SFM Listing Category 8140 comply with Chapter 7A of the California Building Standards Code and have been tested in accordance with State Fire Marshal Standard 12-7A-1, achieving a passing result. Standard 12-7A-1 evaluates the ability of an exterior wall assembly to resist fire penetration from an exterior fire exposure and consists of a 150-kilowatt intensity direct flame exposed to the exterior surface of the assembly for a 10-minute duration.
(3) Non-wood roof
covering/assemblies for wildland urban interface fire areas identified on the Building Materials Listing in SFM Listing Category 8180 comply with Chapter 7A of the California Building Standards Code and have been tested in accordance with ASTM E108. ASTM E108 is a fire-test-response standard used to measure the relative fire characteristics of roof coverings, as part of a complete roof assembly, when exposed to external fire sources. It evaluates the spread of flame across the roof covering when exposed to direct flame impingement and classifies the covering by class, with Class A being the highest achievable class.
2096.
For purposes of this article:(a) “Building Materials Listing” means the list of construction materials and equipment biennially prepared by the Office of the State Fire Marshal pursuant to Section 13144.1 of the Health and Safety Code as part of the Office of the State Fire Marshal’s Building Materials Listing Program.
(b) “Noncombustible” has the same meaning as set forth in Section 202 of Title 24 of the California Code of Regulations.
(c) “Safer from Wildfires regulations” means the regulations set forth in Section 2644.9 of Title 10 of California Code of
Regulations.
2097.
(a) (1) On or before(2) (A)The
department shall, as part of its first evaluation, evaluate whether to update the Safer from Wildfires regulations to include in the regulations the installation of noncombustible construction materials included by the Office of the State Fire Marshal on the Building Materials Listing in any of the following categories: Listing.
(i)Insulation (SFM Listing Category 2440).
(ii)Exterior Wall Siding and Sheathing for Wildland Urban Interface (SFM Listing Category 8140).
(iii)Non-Wood Roof Covering/Assemblies for Wildland Urban Interface (SFM Listing Category 8180).
(B)In its first evaluation, the department may, in its discretion, evaluate whether to include the installation of additional construction materials included by the Office of the State Fire Marshal on the Building Materials Listing that meet the requirements of paragraph (1) of subdivision (b).
(b) As part of its evaluation pursuant to subdivision (a), the department shall do both of the following:
(1) Consult with the Office of Emergency Services, the Department of Forestry and Fire Protection, the Public Utilities Commission, and the Office of Planning and Research to identify additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to consider as part of its evaluation.
(2) Consult with relevant stakeholders to consider as part of its evaluation any potential revisions to the Safer from Wildfires Regulations, including all of the following:
Regulations.
(A)The property insurance industry.
(B)Fire service professionals.
(C)Fire-resistant building material manufacturers.
(D)Organizations representing California property insurance policy holders.
(3) Develop and implement a
process that allows for meaningful public participation that includes, at a minimum, all of the following:
(A) Holding at least one public meeting to allow interested persons to submit suggestions for additional building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs for the department to consider as part of its evaluation.
(B) Making available for public review and comment, including during at least one public meeting, a preliminary list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs being considered by the department for inclusion in the Safer from Wildfires regulations.
(C) Making
available to the public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs the department proposes to include in the list of building hardening measures identified in the Safer from Wildfires regulations before amending the regulations pursuant to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(c) If the department makes public a final list of building hardening measures for property-level mitigation efforts and communitywide wildfire mitigation programs to be included in the list of building hardening measures identified in the Safer from Wildfires regulations pursuant to subparagraph (C) of paragraph (3) of subdivision (b), the department
shall initiate the Administrative Procedure Act rulemaking process to amend the Safer from Wildfires regulations within 30 days of publishing the final list.
