GOOD MORNING EVERYONE. IT'S 902.
IF WE COULD HAVE INSURANCE
COMMITTEE MEMBERS, PLEASE COME
TO THE COMMITTEE AND OR AUTHORS
SO WE CAN GET STARTED. THANK YOU
.
GOOD MORNING. WELCOME TO THE
ASSEMBLY COMMITTEE ON INSURANCE.
TODAY, WE'RE GOING TO CONSIDER
NINE BILLS. THE FOLLOWING BILL
IS RECOMMENDED FOR CONSENT. FILE
ITEM NUMBER SEVEN, AB 2983.
RODRIGUEZ, WE'RE GOING TO BEGIN
AS A SUBCOMMITTEE UNTIL WE HAVE
MORE MEMBERS. REYES CAN GO. OH,
ACTUALLY, WE ACTUALLY HAVE ONE
AUTHOR HERE. EXCELLENT.
ASSEMBLYWOMAN REYES, WOULD YOU
LIKE TO PRESENT FOR
ASSEMBLYWOMAN CERVANTES? AB
2167? YES. THANK YOU SO MUCH.
GOOD MORNING, CHAIR AND MEMBERS.
THANK YOU FOR ALLOWING ME TO
PRESENT AB 2167 ON BEHALF OF
ASSEMBLY MEMBER SABRINA
CERVANTES. THIS BILL MAKES OUR
EXISTING SYSTEM OF PAID FAMILY
LEAVE MORE ACCESSIBLE TO ALL
ELIGIBLE CALIFORNIANS. CURRENT
LAW ALLOWS AN ESTIMATED 14.4
MILLION WORKERS WHO ARE COVERED
BY THE PAID FAMILY LEAVE PROGRAM
TO RECEIVE SUPPLEMENTAL WAGES OF
60 TO 70% FOR UP TO EIGHT WEEKS
TO BOND WITH A NEWBORN OR
ADOPTED CHILD. THE PROGRAM IS
FULLY FUNDED THROUGH EMPLOYEE
PAYROLL DEDUCTIONS AND CAN BE
TAKEN CONSECUTIVELY OR
THROUGHOUT A 12 MONTH PERIOD.
HOWEVER THERE IS ONLY A 41 DAY
WINDOW TO APPLY FOR BENEFITS
THROUGH THE PROGRAM. THIS SMALL
WINDOW, WHICH STARTS ON THE
FIRST DAY OF LEAVE, MAY RESTRICT
ELIGIBLE INDIVIDUALS. THEREFORE,
AB 2167 SEEKS TO FOSTER A MORE
SUPPORTIVE PROCESS BY OFFERING
MORE TIME FOR INDIVIDUALS AND
FAMILIES TO ACCESS PAID FAMILY
LEAVE. THE BILL WOULD ALLOW FOR
EARLY SUBMISSIONS OF UP TO 60
DAYS PRIOR TO THE FIRST DAY OF
LEAVE, AND WOULD ADJUST THE
DEADLINE AND APPEALS PROCESS. IT
WOULD EXTEND THE WINDOW TO APPLY
FOR BENEFITS FROM 41 TO 60 DAYS,
AND ADJUST THE DEADLINE FOR
APPEALS FROM 3030 DAYS TO 120
DAYS. THE BILL WILL ALSO IMPROVE
THE ONLINE AND PAPER APPLICATION
PROCESS. PAID FAMILY LEAVE
BENEFITS ARE AVAILABLE TO ALL
CALIFORNIANS, REGARDLESS OF
IMMIGRATION STATUS. AB 2167 WILL
ENSURE THAT ALL INDIVIDUALS WHO
WOULD LIKE TO USE THE ONLINE
APPLICATION PROCESS TO DO SO
WITH THEIR SOCIAL SECURITY
NUMBER OR WITH AN INDIVIDUAL
WITH AN ITIN NUMBER. FINALLY,
THE BILL WILL MAKE ALL RELEVANT
APPLICATION FORMS AVAILABLE TO
BE DOWNLOADED ONLINE AND
DESIGNED TO BE PDF FORMS.
ASSEMBLY BILL 2167 IS IN
RESPONSE TO A NUMBER OF STORIES
OF INDIVIDUALS WHO STRUGGLED
IMMENSELY TO APPLY FOR THE
BENEFITS THEY DESERVED. THANK
YOU. DO YOU HAVE A WITNESS IN
SUPPORT? MAY GO AHEAD. OKAY. DO
WE HAVE ANY OPPOSITION? OKAY.
ANY PUBLIC COMMENT? OKAY. WE'LL
BRING IT BACK TO THE COMMITTEE.
DO YOU HAVE ANY QUESTIONS FOR
THE ASSEMBLY MEMBER. NO OKAY.
WOULD YOU LIKE TO CLOSE? THANK
YOU, MADAM CHAIR AND COLLEAGUES,
I RESPECTFULLY ASK FOR YOUR.
AYE. VOTE ON AB 2167. THANK YOU.
DO WE HAVE A MOTION? OH WE
CAN'T, WE'RE A SUBCOMMITTEE.
OKAY. WE'LL TAKE IT UP AT THE
APPROPRIATE TIME. THANK YOU SO
MUCH. THANK YOU.
WHENEVER YOU'RE READY, MADAM
CHAIR. THANK YOU. MONNING VICE
CHAIR. OH, HE'S NOT HERE.
MEMBERS OF THE COMMITTEE. THIS
BILL WILL ESTABLISH A LIMITED
LINES INSURANCE AGENT LICENSE
FOR THE PURPOSE OF SELLING HOME
WARRANTY PRODUCTS. THIS BILL IS
PATTERNED AFTER THE SIX EXISTING
LIMITED LINES LICENSES IN
CALIFORNIA. THESE LICENSES ARE
DESIGNED TO MAKE IT EASIER FOR
BUSINESSES TO SELL THESE
PRODUCTS INCIDENTAL TO THEIR
MAIN BUSINESS, WHILE STILL
REQUIRING LICENSING, EDUCATION,
CONSUMER PROTECTIONS, AND
OVERSIGHT BY THE DEPARTMENT OF
INSURANCE. TRADITIONALLY, HOME
WARRANTIES HAVE BEEN SOLD AS
PART OF THE REAL ESTATE
TRANSACTION. HOWEVER, THE MARKET
HAS EVOLVED AND NOW MORE PEOPLE
ARE INTERESTED IN BUYING HOME
WARRANTY PRODUCTS. SUBSEQUENT TO
THE REAL ESTATE TRANSACTION,
PEOPLE NOW SEEK OUT A HOME
WARRANTY TO PROTECT THEMSELVES
AGAINST UNEXPECTED EXPENSES TO
REPAIR THEIR HEATING OR AIR
CONDITIONING IN A REFRIGERATOR,
DISHWASHER, WATER HEATER, OR
OTHER APPLIANCES. THESE REPAIRS
CAN COST HUNDREDS OF DOLLARS OR
MORE. AS WE KNOW, THERE IS A
SIGNIFICANT NUMBER OF OUR
CONSTITUENTS THAT ARE NOT IN A
POSITION FINANCIALLY TO HANDLE
SUCH UNEXPECTED EXPENSES. Ã
LIMITED LINES LICENSE FOR HOME
WARRANTY PRODUCTS WILL ENABLE
ADDITIONAL ENTITIES TO SELL
THESE PRODUCTS, HELPING TO MAKE
THEM MORE ACCESSIBLE TO ALL
CONSUMERS. I HAVE JOHN NORWOOD
WITH ME TO PROVIDE SOME MORE
BACKGROUND AND CONTEXT ON THIS
BILL. YES. MEMBERS JOHN NORWOOD,
ON BEHALF OF HOMESERVE USA,
UNDER THE NATIONAL ASSOCIATION
OF INSURANCE COMMISSIONERS,
MODEL HOME WARRANTY ACT, AND IN
ALMOST EVERY OTHER STATE,
THERE'S NO LICENSE REQUIRED TO
SELL HOME WARRANTIES.
ESSENTIALLY, THEIR HOME
WARRANTIES, THEY'RE NOT REALLY
INSURANCE. AND THAT'S WHY WHEN
CALIFORNIA ESTABLISHED ON THE
HOME WARRANTY LAW 40 SOME YEARS
AGO, THE PRIMARY MARKET WAS IN
THE REAL ESTATE TRANSACTION AND
IT BASICALLY SINCE IT WAS
TRANSACTING IT, THERE WAS A
LICENSE REQUIREMENT TO GET AN
INSURANCE AGENT'S LICENSE, BUT
IRONICALLY, REAL ESTATE AGENTS
AND DIRECT SELLERS, AS LONG AS
THEY WEREN'T PAID A COMMISSION,
WERE EXEMPTED FOR THAT FROM THAT
LAW. SO EFFECTIVELY, THERE WAS
NO LICENSING REQUIREMENT IN
CALIFORNIA, BECAUSE THE
EXCEPTIONS EIGHT OF THE RULE,
THE AS THE AUTHOR INDICATED, THE
HOME WARRANTY MARKET HAS
CHANGED. NOW IN ESPECIALLY IN
OTHER STATES, BUT PEOPLE ARE
INTERESTED IN BUYING THAT TYPE
OF PROTECTION OUTSIDE THE REAL
ESTATE TRANSACTION. AND SO
RATHER THAN FOLLOWING OTHER
STATES, WE, WE, HAVE CHOSEN TO
ADOPT THE LIMITED LINES MODEL
UNDER THAT MODEL, EVERYONE IN
THE TRANSACTION, THE INSURANCE
COMPANY, THE AGENT, THE BROKER
AGENT, THE LIMITED LICENSE
HOLDER, THE ENDORSEES ARE ALL
REGULATED BY THE DEPARTMENT OF
INSURANCE. COME UNDER ITS
ENFORCEMENT AND CONSUMER
PROTECTION PROVISIONS, AND SO,
THAT'S A VERY THAT'S A POSITIVE
THERE. AND THEN IN ADDITION,
WE'VE ADDED OTHER CONSUMER
PROTECTION LINES, SUCH AS A 30
DAY FREE, FREE LOOK, A
PROHIBITION ON ANY SOLICITATION
OR SALES IN HOME AND
REQUIREMENTS THAT THE INSURER
AND THE BROKER AGENT ESSENTIALLY
BE RESPONSIBLE FOR THE CONDUCT
OF THE LIMITED LINES HOLDER, AND
THEIR ENDORSEES AND ALSO
RESPONSIBLE FOR THE TRAINING
MATERIALS, ETC, THAT HAVE TO BE
DEVELOPED. SO WE THINK THAT, THE
LIMITED LINES MODEL, IS PERFECT
FOR THIS TYPE OF BUSINESS, THESE
PRODUCTS ARE, YOU KNOW, BEST
SOLD INCIDENTAL TO OTHER
BUSINESSES, ESSENTIALLY, JUST
LIKE THE OTHER SIX LIMITED LINES
LICENSES. SO WITH THAT, I
APPRECIATE YOUR I VOTE AND BE
HAPPY TO ANSWER ANY QUESTIONS.
THANK YOU SIR. OTHERS IN
SUPPORT, JUST YOUR NAME AND
ORGANIZATION. PLEASE LARA
CURTIS, ON BEHALF OF THE
AMERICAN PROPERTY CASUALTY
INSURANCE ASSOCIATION IN
SUPPORT. THANK YOU. THANK YOU,
RYAN FLANAGAN, ON BEHALF OF CNA
INSURANCE AND SUPPORT. THANK
YOU. IS THERE ANY OPPOSITION TO
THE BILL? GOOD MORNING.
COMMITTEE CLAUDIA MILNER, I'M
SORRY, ASSISTANT CHIEF DEPUTY
DIRECTOR, ASSISTANT CHIEF DEPUTY
LEGISLATIVE DIRECTOR AT
CALIFORNIA DEPARTMENT OF
INSURANCE. WE HAVE NO FORMAL
OPPOSITION TO THIS BILL AT THIS
TIME. HOWEVER, WE HAVE EXPRESSED
OUR CONCERNS TO COMMITTEE AND TO
THE AUTHOR AND THE SPONSOR, AND
WE LOOK FORWARD TO CONTINUING
CONVERSATIONS TO MOVE FORWARD.
THANK YOU. THANK YOU. GOOD
MORNING, MR. CHAIR AND MEMBERS.
ROBERT HERRELL, EXECUTIVE
DIRECTOR OF THE CONSUMER
FEDERATION OF CALIFORNIA. WE DO
NOT HAVE AN OFFICIAL POSITION ON
THIS BILL. I'D LIKE TO MAKE THAT
CLEAR, I WOULD JUST NOTE FOR THE
COMMITTEE THAT HISTORICALLY,
THERE'S BEEN A LOT OF FRAUD IN
THIS AREA WHERE CONSUMERS DON'T
KNOW WHAT'S COVERED AND WHAT'S
NOT, YOU MAY COLLECTIVELY THINK
ABOUT A FULL LICENSING
REQUIREMENT HERE. GIVEN THE
HISTORIC NATURE OF FRAUD AND
WITHOUT, AS MR. NORWOOD
INDICATED, THE, YOU KNOW,
EXCEPTION THAT ATE UP THE RULE
GOING BACK DECADES, IF YOU DO GO
TO LICENSING OUR GENERAL VIEW ON
ALL LICENSING REGIMES IS THAT
THERE BE RIGOROUS PRE LICENSING
CHECKS. FOR EXAMPLE, IF YOU LOOK
INTO THE BACKGROUND OF SOME OF
THE COMPANIES INVOLVED, MANY
TIMES YOU'LL BE ABLE TO SEE SOME
PROBLEMS. AND IT'S SORT OF THE
8020 RULE, RIGHT. 20% OF THE
COMPANIES CREATE 80% OF THE
PROBLEMS. IT'S A GOOD WAY TO
KEEP FOLKS OUT OF THE REGIME IF
THERE'S GOING TO BE ENFORCEMENT
ISSUES. WE DO LIKE THE 30 DAY
FREE LOOK, AND THAT'S
FORESHADOWING FOR A COMMENT,
I'LL MAKE LATER ON. THANK YOU
VERY MUCH. ALL RIGHT. THANK YOU.
ANYONE ELSE IN OPPOSITION OR IN
BETWEEN SEEING NONE. WE'LL BRING
IT BACK TO THE COMMITTEE FOR
QUESTIONS OR COMMENTS FROM THE
COMMITTEE. OKAY. SEEING NONE,
MADAM CHAIR, WOULD YOU LIKE TO
CLOSE? YEAH. IF I MAY, FOR A
SECOND, I'VE THIS CLIENT,
HOMESERVE USA IS NEW, BUT FOR
SOME 25 YEARS, I'VE REPRESENTED
ANOTHER HOME WARRANTY COMPANY.
AND IN ALL THAT TIME, I'VE NEVER
SEEN ONE PIECE OF LEGISLATION.
SIGNIFICANT PIECE OF LEGISLATION
ON HOME WARRANTY PRODUCTS IN
CALIFORNIA, AT THE SAME TIME,
I'VE NOT SEEN ANY TYPE OF OUTCRY
OR ATTENTION FROM THE DEPARTMENT
OF INSURANCE ON THIS BUSINESS.
SO THAT WOULD LEAD ME TO
INDICATE THAT MOST OF THESE
COMPANIES ARE DOING A PRETTY
GOOD JOB. OKAY. THANK YOU. AND,
MADAM CHAIR, YES, THANK YOU. AND
AT THE APPROPRIATE TIME, I ASK
RESPECTFULLY ASK FOR I VOTE.
VERY WELL. THANK YOU. THANK YOU
VERY MUCH
.
OKAY. WE'RE LOOKING FOR AUTHORS.
IF YOU HAVE A BILL UP AND
ASSEMBLY INSURANCE COMMITTEE,
PLEASE COME TO THE COMMITTEE
ROOM.
WELCOME. ASSEMBLYWOMAN PACHECO,
A HAPPY BIRTHDAY, WHENEVER
YOU'RE READY, YOU CAN PRESENT.
BILL ARE. IT WAS A GOOD WORKOUT.
ALL RIGHT. THIS IS AB 2735. NO
WRONG BILL, 2743. YES. FOR GOOD
MORNING, EVERYONE, MADAM CHAIR
AND MEMBERS OF THE COMMITTEE, I
AM HERE TO PRESENT ASSEMBLY BILL
2743. I WANT TO START BY
THANKING THE COMMITTEE STAFF FOR
ALL THEIR HARD WORK ON THIS BILL
. I ALSO WANT TO THANK THE
INSURANCE COMMISSIONER AND THE
DEPARTMENT OF INSURANCE
DEPARTMENT INSURANCE STAFF FOR
THEIR EXTENSIVE FEEDBACK AND
TIME SPENT ON THIS BILL. AB 2743
PROVIDES AN APPROPRIATE
ADJUSTMENT IN FINANCIAL
RESPONSIBILITY FOR PEER TO PEER
CAR SHARING. THE BILL REFLECTS
MONTHS OF CONVERSATIONS WITH THE
OPPOSITION AND GOOD FAITH
ATTEMPTS TO MITIGATE THEIR
CONCERNS, AND PROVIDES IMPORTANT
CLARITY ON THE BILL'S INTENT,
WHICH IS TO ONE SET FINANCIAL
RESPONSIBILITY LIMITS IN 2025 TO
45 K, 90 K FOR BODILY INJURY AND
15 K 15,000 FOR PROPERTY DAMAGE.
INCREASE THE FINANCIAL
RESPONSIBILITY LIMIT THREE TIMES
FOR 2035 REQUIRES A NEW, ROBUST
CONSUMER DISCLOSURES, CREATE NEW
PENALTY PROVISIONS INCLUDE
SAVINGS CLAUSE LANGUAGE
REQUESTED BY THE CONSUMER
ATTORNEYS OF CALIFORNIA, AB 2743
STRIKES A BALANCE BETWEEN
REGULATION AND GROWTH, ENSURING
THAT PEER TO PEER SHARING
REMAINS VIABLE AND BENEFICIAL
FOR USERS AND PROVIDERS. WITH ME
TODAY TO TESTIFY IN SUPPORT OF
AB 2743 ARE LARISSA CESPEDES ON
BEHALF OF TURO, AND ANDREA
DEVAULT ON BEHALF OF TECHNET.
AND I'LL HAND IT OVER TO MY
WITNESS IS. GOOD MORNING, CHAIR
AND MEMBERS. LARISSA CESPEDES
HERE ON BEHALF OF TURO, THE
SPONSOR OF THIS LEGISLATION. I
WANT TO EXPRESS OUR SINCERE
GRATITUDE TO THE COMMITTEE
STAFF, TO THE DEPARTMENT OF
INSURANCE STAFF AND TO ALL THE
STAKEHOLDERS THAT HAVE BEEN
INVOLVED OVER THE YEAR AND A
HALF LONG CONVERSATIONS ON THIS
ISSUE, TURO IS HEADQUARTERED IN
CALIFORNIA, BASED IN IN SAN
FRANCISCO, AND WE HAVE OVER
19,000 HOSTS THAT HAVE THEIR
VEHICLES ON THEIR PLATFORM. THE
INSURANCE THIRD PARTY INSURANCE
LIABILITY MANDATE IS UNIQUE FOR
PEER TO PEER CAR SHARING, AND
THIS BILL ENSURES THAT OUR
HOSTS, OUR GUESTS AND ALL THE
MOBILITY OPTIONS THAT ARE
AVAILABLE TO CALIFORNIA WILL
CONTINUE THROUGH 2025. WE
UNDERSTAND THAT THIS DOES NOT
ADDRESS ALL OF THE CONCERNS
RAISED BY THE OPPONENTS, AND WE
SINCERELY APPRECIATE THEIR
FEEDBACK AS WELL, AND BECAUSE OF
THAT, 2030 53X REQUIREMENT, WE
WILL BE BACK AGAIN TO ENSURE
THAT THERE IS DATA AND
INFORMATION THAT IS PROVIDED TO
THE DEPARTMENT TO ENSURE THAT
THE WHATEVER RATES WE HAVE IN
THE FUTURE REFLECT THAT
INFORMATION. THANK YOU, GOOD
MORNING, MADAM CHAIR AND
MEMBERS. MY NAME IS ANDREA
DEVAULT. I'M HERE TODAY
REPRESENTING TECHNET TECHNET'S
DIVERSE MEMBERSHIP INCLUDES
DYNAMIC AMERICAN BUSINESSES
RANGING FROM STARTUPS TO THE
MOST ICONIC COMPANIES ON THE
PLANET, REPRESENTING OVER 5
MILLION EMPLOYEES AND COUNTLESS
CUSTOMERS. AND WE'RE HERE TODAY
PROUDLY IN SUPPORT OF AB 2743,
THANK THE AUTHOR FOR HER WORK.
HAPPY BIRTHDAY, AND LIKEWISE AS
LARA SAYS, DESCRIBED WITH THE
EFFORTS OF TURO TECHNET ALSO HAS
BEEN EQUALLY INVOLVED AND THANK
THE AUTHOR AND THE COMMITTEE.
MOST IMPORTANTLY FOR ALL THE
INCREDIBLE WORK AB 2743 INCLUDES
ROBUST CONSUMER NOTICES, PENALTY
PROVISIONS THAT ENSURE AND
PENALTY PROVISIONS, ENSURING
THAT CALIFORNIANS WHO TAKE
ADVANTAGE OF THESE SERVICES AND
INNOVATIONS REMAIN PROTECTED AND
WELL INFORMED WHEN DRIVING IN
CALIFORNIA. WE RESPECTFULLY ASK
FOR YOUR AYE VOTE. THANK YOU,
THANK YOU. DO WE HAVE ANY
WITNESSES IN OPPOSITION? GOOD
MORNING, I'M NANCY PAVARINI WITH
THE CONSUMER ATTORNEYS OF
CALIFORNIA. WE DO HAVE AN
OPPOSED UNLESS AMENDED POSITION.
WE APPRECIATE ALL THE WORK OF
STAFF AND THE SPONSORS AND THE
AUTHOR'S OFFICE. THE HEART OF
THE ISSUE IS WHAT SHOULD THE
LIMITS BE TO PROTECT PEOPLE WHO
ARE INJURED OR KILLED IN THESE
TYPES OF ACCIDENTS? AND THE
CURRENT LAW IS THREE TIMES THE
MINIMUM. FINANCIAL
RESPONSIBILITY LIMITS. AND TO BE
FRANK, THERE'S NOT A LOT OF
LEGISLATIVE HISTORY ON WHY THAT
WAS CHOSEN. THAT BEING SAID, WE
HAVE VARYING INFORMATION. WHAT
WE HAVE FROM CONSUMER ATTORNEYS
IS WHAT I CALL THE BOOTS ON THE
GROUND. YOU KNOW WHAT OUR
MEMBERS ARE SEEING IN THESE
COLLISIONS, WHETHER OR NOT
THERE'S ADEQUATE INSURANCE, THEY
DON'T THINK THERE IS. WE DON'T
HAVE THE DEPARTMENT OF INSURANCE
INFORMATION. AND TURO GET
AROUND. THEY HAVE THEIR
INFORMATION, BUT IT'S NOT PUBLIC
. AND SO REALLY, FOR YOU AS
POLICY DECISION MAKERS, YOU NEED
TO HAVE THE INFORMATION ON WHAT
THE LIMITS SHOULD BE BASED ON
DATA. AND WE JUST DON'T HAVE
THAT YET. SO WE DO UNDERSTAND
THERE THERE WILL HAVE TO BE SOME
TYPE OF DATA GIVEN, BECAUSE
BECAUSE OTHERWISE YOU CAN'T MAKE
INFORMED DECISIONS ON WHAT THE
LIMITS SHOULD BE. SO OUR
OPPOSITION IS BASED ON TWO
THINGS. ONE, THE CURRENT, THE
CURRENT LIMITS ARE THREE TIMES
THE BILL HAS ONE AND A HALF. WE
OFFERED TWO. SO WE WERE TRYING
TO FIND A MIDDLE GROUND THAT WAS
NOT ACCEPTED. THE SECOND THING
THAT WE'VE ASKED FOR IS SOME
TYPE OF INFORMATION FROM THE
DEPARTMENT. FOR YOU AS POLICY
MAKERS, SO YOU CAN ACTUALLY
DETERMINE WHAT THE LIMITS SHOULD
BE. AND THAT'S NOT INCLUDED IN
THE BILL. WE DO UNDERSTAND, YOU
KNOW, 20, 35, IF ANY OF US ARE
STILL HERE, IT'S GOING TO HAVE
TO BE DEALT WITH. BUT, UNTIL
THEN, WE DO HAVE AN OPPOSING,
LESS AMENDED POSITION BECAUSE WE
JUST DON'T HAVE THE DATA. SO
THAT'S THAT'S THE BASIS OF OUR
OPPOSITION. THANK YOU. DO WE
HAVE ANY PUBLIC COMMENT? THANK
YOU, MADAM CHAIR. ROBERT CARROLL
WITH THE CONSUMER. ROBERT
CARROLL WITH THE CONSUMER
FEDERATION OF CALIFORNIA. WE
HAVE NO OFFICIAL POSITION ON THE
BILL, AND WE ALSO HAVE NO
POSITION, PARTICULARLY ON THE
LIMITS, ALTHOUGH IT'S
INTERESTING TO HEAR THE BACK AND
FORTH, WHAT WE DO THINK IS
SOMETHING THAT HARKENS TO WHAT
MISS PAVARINI JUST SAID A MOMENT
AGO, INDEPENDENTLY LOOKING AT
THIS, WE THINK YOU NEED THE
DATA. SO OUR OUR BELIEF IS THAT
THIS BILL OUGHT TO BE AMENDED TO
INCLUDE AN OBLIGATION ON CDI TO
COLLECT THAT DATA. I KNOW THAT
THEY HAVE THE GENERAL AUTHORITY
TO DO DATA CALLS, BUT I THINK IN
AN AREA LIKE THIS, IT PROBABLY
WOULD BE VERY HELPFUL BECAUSE
YOU AS POLICYMAKERS CAN'T MAKE
THE DECISION WITHOUT GOOD DATA.
YOU NEED TO KNOW THE INCIDENCE
INFORMATION WE WOULD ASSERT THAT
THAT OUGHT TO BE AMENDED INTO
THIS BILL. THANK YOU. GOOD
MORNING. JAMIE HUFF WITH THE
CIVIL JUSTICE ASSOCIATION OF
CALIFORNIA AND STRONG SUPPORT OF
THE BILL. THANK YOU. GOOD
MORNING, TAMMY BUI, ON BEHALF OF
THE MORE THAN 2000 TURO
COMMUNITY MEMBERS WHO, SUBMITTED
A LETTER OF TESTIMONY IN SUPPORT
. THANK YOU. OKAY, I'LL BRING IT
BACK TO THE COMMITTEE. IF YOU
HAVE ANY QUESTIONS FOR THE
AUTHOR. SO I HEART DATA, WHICH
IS NO NEWS, I THINK, TO ANYBODY
IN THE ROOM. AND AND SO I GUESS
MY QUESTION SORT OF FOLLOWS UP,
AND I DON'T KNOW IF YOU WANT TO
COME BACK UP FOR THIS
CONVERSATION, BUT, WITH IF WE
DON'T HAVE THE DATA YET, WHY ARE
WE ACTING NOW? AND I GUESS
THAT'S WHERE I'LL START. THANK
YOU FOR THE QUESTION. ASSEMBLY
MEMBER THROUGH THE CHAIR, I
THINK THE QUESTION IS, THE
FULLNESS OF THE DATA THAT WE
HAVE, WE SPENT AGAIN THE LAST
YEAR PROVIDING DATA TO THE
DEPARTMENT OF INSURANCE AND
WORKED WITH TRAVELERS. OUR
INSURANCE, THIRD PARTY INSURANCE
PROVIDER, TO GIVE DATA THAT
ACTUALLY JUSTIFY EVEN A LOWER
RATE THAN 1.5 X ON THE ON THE
BODILY DAMAGE. BUT THERE WAS
THIS QUESTION OF A OF A SCOPE OF
DATA THAT WAS NOT CAPTURED BY US
OF POTENTIALLY, INDIVIDUALS WHO
WERE IN ACCIDENTS WHERE THE
THIRD PARTY LIABILITY INSURANCE
DIDN'T COME INTO PLAY. AND SO I
THINK THERE IS A SMALL DATA GAP
THERE. AND THE ISSUE WE HAVE IS
HOW DO WE COMPEL THE DEPARTMENT
TO COLLECT THAT DATA? HOW
CURRENTLY INSURERS ARE NOT
COLLECTING DATA WHEN YOU'RE IN
AN ACCIDENT THAT'S IN A VEHICLE
THAT'S NOT YOUR OWN? AND I WON'T
SPEAK FOR THE INSURERS, BUT THIS
IS THEIR FEEDBACK. THEY ARE NOT
CURRENTLY ASKING, WERE YOU
DRIVING A HERTZ RENTAL CAR? WERE
YOU DRIVING A TURO? WERE YOU
DRIVING YOUR MOTHER'S CAR? SO
THERE'S SOME GRANULAR, MORE
GRANULAR DATA THAT WE NEED TO
PROVE, TO RECEIVE IN ORDER TO
PROVIDE, I THINK, THE FULL SCOPE
OF WHAT THE CONSUMER ATTORNEYS
WERE ASKING FOR IN THEIR
TESTIMONY. NOW, TO WHY WE NEED
THIS FIXED BY 2025. THAT'S
BECAUSE IS, THAT THREE X LIMIT
THAT WAS PUT INTO LAW THAT MISS
PAVARINI REFERENCED BACK IN 2010
WAS A NUMBER PULLED OUT OF THIN
AIR. AND WITH THE SENATOR DODD'S
BILL THAT PASSED TWO YEARS AGO,
OUR RATES WOULD GO EXPONENTIALLY
HIGHER, WHICH WOULD DRIVE THE
COST OF OPERATING FOR TURO, FOR
GET AROUND AND OTHERS OPERATING
IN CALIFORNIA. SO SIGNIFICANTLY
HIGH THAT WOULD THREATEN OUR
ABILITY TO EXIST IN CALIFORNIA
AND PROVIDE SERVICES IN
CALIFORNIA. AND SO WHAT THIS
BILL REPRESENTS IS A AN
ADJUSTMENT FOR 2025 SO THAT WE
DON'T HAVE THIS FATAL UNINTENDED
IMPACT AND A COMMITMENT TO COME
BACK AND MAKE SURE THAT WHEN WE
DO ADJUST RATES FOR 2035 OR EVEN
PRIOR TO THEN, THAT WE HAVE THE
DATA THAT WE NEED AND WE HAVE
MORE TIME, TO ENSURE THAT IT'S
ACTUALLY BEING COLLECTED. I HOPE
THAT ANSWERS YOUR QUESTION.
YEAH. THANK YOU. AND THEN I,
JUST ONE FOLLOW UP QUESTION
BECAUSE I RECALL THE DODD BILL,
AND THE DISCUSSIONS AROUND THE
DODD BILL AND I GUESS WHAT I
STRUGGLE WITH ON THIS IS WHAT IS
THE DIFFERENCE, RIGHT? I MEAN,
IF I'M DRIVING A RENTAL CAR
VERSUS A TURO, THE RISK IS NOT
NOT DISTINGUISHABLE. RIGHT? SO I
GUESS HELP ME UNDERSTAND THE
LOGIC. THAT'S OKAY. YEAH,
EXCELLENT QUESTION, OUR POSITION
IS THAT THERE IS NO
DISTINGUISHABLE DIFFERENCE IN
RISK WHEN YOU'RE DRIVING A
RENTAL CAR, A TURO, OR YOUR
FAMILY MEMBER'S CAR, AND IF YOU
WERE TO LOOK AT THE RENTAL CAR
STATUTE RIGHT NOW, THERE IS
CURRENTLY NO MANDATE FOR THEM TO
PROVIDE THIRD PARTY LIABILITY
INSURANCE. AND SO YOU KNOW, IF
THIS WAS EVERYTHING THAT TURO,
IF THIS BILL REFLECTED
EVERYTHING WHICH TURO ASKED FOR,
WE WOULD BE STRIKING THE THIRD
PARTY LIABILITY INSURANCE
MANDATE. SO GOOD POINT. BUT YOU
KNOW, WE DO NEED TO GET THE DATA
TO, TO INFORM AND ENSURE THAT
WHAT WE ASSUME THAT THERE IS NO
DIFFERENCE IN RISK IS ACTUALLY
THERE. WE ALL LOVE DATA. I WOULD
JUST SAY, AND AGAIN, I'M NOT AN
EXPERT IN IN THE DIFFERENCES.
HOWEVER, I WOULD JUST POINT OUT
THAT THERE ARE DIFFERENCES
RENTAL CAR COMPANIES HAVE. THEY
HAVE INSPECTIONS EVERY TIME A
CAR GOES OUT. THAT DOESN'T
HAPPEN WITH A PEER TO PEER. MOST
RENTAL CAR COMPANIES DON'T RENT
TO SOMEBODY UNDER 25. THAT
DOESN'T OCCUR. AND THEN AGAIN,
WITH THE LACK OF DATA, WHAT OUR
FOLKS TELL US IS THAT THESE ARE
BEING USED MORE BY YOUNGER
DRIVERS AND INEXPERIENCED
DRIVERS. AND INSURED DRIVERS SO
THAT, YOU KNOW, I, I WOULD BE
MORE LIKELY TO GET A RENTAL CAR
IF MY SON OR DAUGHTER WOULD
PROBABLY BE MORE LIKELY WITH
VERY LITTLE EXPERIENCE TO GET A
PEER TO PEER. AGAIN, WE JUST
DON'T HAVE THE DATA. AND SO ONE
OF OUR PROPOSALS IN OUR LETTER
WAS TO REQUIRE THE DEPARTMENT TO
COLLECT THAT DATA, AND SO WE'D
LIKE TO, YOU KNOW, SEE THAT AS
WE MOVE FORWARD. BECAUSE TO YOUR
POINT EXACTLY. YOU KNOW, WHAT
SHOULD THE LIMITS BE? AND I
TOTALLY AGREE THAT THE THREE
TIMES THERE'S NO LEDGE HISTORY
ON IT, IT IS A DAVE JONES BILL,
AND THERE'S NO LEDGE HISTORY,
BUT, WITH THE INCREASED COSTS OF
MEDICAL CARE AND EVERYTHING
ELSE, THAT'S WHY THE LEGISLATURE
CHOSE TO INCREASE THE MINIMUM
FINANCIAL RESPONSIBILITY LIMITS.
LAST YEAR OR TWO YEARS AGO, AT
THE DODD BILL. SO WE REALLY DO
NEED THE DATA. AND WE'VE WE'VE
BEEN TALKING A LOT ABOUT HOW TO
GET THAT DATA. WE DON'T THINK IT
COULD JUST BE THE COMPANIES
THEMSELVES SAYING, HERE'S OUR
DATA. IT HAS TO BE THROUGH THE
DEPARTMENT. GOT IT. NOW I AS AND
I APOLOGIZE. THIS IS PROBABLY IN
THE ANALYSIS. I HAD A VERY LONG
DAY YESTERDAY FOR ANYBODY
WATCHING ON TV. I ASSUME ALL OF
YOUR CARS ARE INSURED, THAT YOU
HAVE TO BE INSURED TO RENT ON
TURO AND GET AROUND. SO, YES.
OKAY. AND IF YOU WANT TO CHIME
IN AND JUST A DIFFERENCE HERE IS
THAT, TURO IS A THIRD PARTY, SO
WE DON'T OWN OUR VEHICLES,
RIGHT? IT'S UP, WHEREAS. RIGHT.
BUT YOU WOULD REQUIRE YOUR
RENTERS TO HAVE INSURANCE.
THAT'S WHAT I'M ASKING. YES. THE
PEOPLE WHO USE YOUR PLATFORM, IF
YOU WILL. YES. OKAY THAT'S
HELPFUL INFORMATION. AND THEN SO
I WILL SAY I HAVE USED TURO, AS
A COST SAVINGS TECHNIQUE AND I
AM WELL ABOVE THE AGE OF 25,
SADLY. SO AND CONSIDER MYSELF A
PRETTY RESPONSIBLE DRIVER, BUT.
SO I DON'T KNOW THE ANSWER TO
WHO USES THIS, AND I ACTUALLY
DIDN'T KNOW YOU COULD RENT THESE
WHEN YOU CAN'T RENT A RENTAL
CAR. BUT, YOU KNOW, I APPRECIATE
WHAT YOU'RE TRYING TO DO HERE. I
DO THINK IT HAS, YOU KNOW, WHEN
THERE WAS AN ABSENCE OF RENTAL
CARS, THIS REALLY DID ALLOW THE
MARKET TO BECOME HEALTHIER AND,
ALLOW PEOPLE TO MAKE SOME EXTRA
MONEY WHEN THEY NEED IT OFF OF
AN ASSET. THEY HAVE THAT HAS
BEEN BENEFICIAL, I THINK, TO THE
USERS. SO I DO THINK WE NEED TO
GET IT RIGHT. I APPRECIATE THE
DATA. I THINK THAT I HOPE THE
CONVERSATION WILL CONTINUE ABOUT
WHAT ROBUST DATA WE WILL GET AS
WE FACE 2035 SO THAT WE CAN
MAKE, NOT ME, I DON'T THINK, BUT
OTHERS CAN MAKE, A GOOD
DECISION. THANK YOU. SO WE'RE
GOING TO TAKE A PAUSE HERE AND
ESTABLISH A QUORUM. COMMITTEE
SECRETARY, PLEASE CALL THE ROLL.
CALDERON PRESIDENT CALDERON
HERE. CHEN ALVAREZ, BAUER-KAHAN.
BAUER-KAHAN HERE. BERMAN. GIBSON
JONES-SAWYER. LOWENTHAL.
LOWENTHAL HERE. ORTEGA. ORTEGA.
HERE. JOE. PATTERSON
PETRIE-NORRIS. HERE.
PETRIE-NORRIS. HERE. RUBIO
RUBIO. HERE. VALENCIA VALENCIA.
HERE. WILLIS. WALLACE. WALLACE.
HERE WOOD. WOOD. HERE. OKAY
CONSENT CALENDAR. DO I HAVE A
MOTION? THANK YOU. PLEASE CALL
THE ROLL FILE. ITEM NUMBER
SEVEN, AB 2983. RODRIGUEZ
CALDERON. ACTION IS Dð. PASS TO
APPROPRIATIONS RECOMMEND
CONSENT. CALDERON CALDERON. AYE.
CHEN. ALVAREZ. BAUER-KAHAN
BAUER-KAHAN I BERMAN. GIBSON.
JONES-SAWYER LOWENTHAL.
LOWENTHAL. I. ORTEGA ORTEGA I
JO. PATTERSON. PETRIE-NORRIS
PETRIE-NORRIS I. RUBIO I. RUBIO
I VALENCIA. VALENCIA I WALLACE.
WALLACE I WOOD. WOOD. I THANK
YOU. OKAY. DO WE HAVE ANY OTHER
QUESTIONS FOR THE AUTHOR. DO WE
HAVE A SECOND SECOND. THANK YOU.
WOULD YOU LIKE TO CLOSE? YES, SO
THIS BILL, WE'VE BEEN WORKING
HARD ON THIS BILL, MONTHS OF
CONVERSATIONS. AND SO I
RESPECTFULLY ASK FOR YOUR. AYE,
VOTE. THANK YOU, SECRETARY,
PLEASE CALL THE ROLL. FILE ITEM
NUMBER SIX, AB 2743. PACHECO.
MOTION IS DUE PASSED TO
APPROPRIATE ÓRDENES. CALDERON.
AYE. CALDERON. AYE. CHEN.
ALVAREZ BAUER-KAHAN. AYE.
BAUER-KAHAN I BERMAN. GIBSON.
JONES-SAWYER LOWENTHAL.
LOWENTHAL AYE. ORTEGA. ORTEGA
AYE. JO. PATTERSON.
PETRIE-NORRIS. AYE.
PETRIE-NORRIS AYE. RUBIO. RUBIO.
AYE. VALENCIA VALENCIA. AYE.
WALLACE. WALLACE I WOULD. WOOD I
. OKAY. THANK YOU. I GET THAT
BILL GETS OUT. THANK YOU VERY
MUCH. THANK YOU A MOTION MOTION
TO PASS FOR SECOND. THANK YOU
1880 18 AB 1883. YES THANK YOU.
THANK YOU. BIÂU 1863. PLEASE
CALL THE ROLL. OKAY. GREAT FILE
ITEM NUMBER ONE AB 1883.
CALDERON MOTION IS DUE. PASS TO
APPROPRIATIONS. CALDERON AYE.
CALDERON. AYE. CHEN. ALVAREZ.
BAUER-KAHAN BAUER-KAHAN. AYE.
BERMAN. GIBSON. JONES-SAWYER
LOWENTHAL. LOWENTHAL. AYE.
ORTEGA ORTEGA. AYE. JO.
PATTERSON. PETRIE-NORRIS
PETRIE-NORRIS. AYE. RUBIO. AYE.
RUBIO. AYE. VALENCIA DE
VALENCIA. AYE. WALLACE. WALLACE.
AYE. WOOD WOOD. AYE. MOTION FOR
ITEM NUMBER TWO. AB 2167.
CERVANTES. SECOND, PLEASE CALL
THE ROLL FILE. ITEM NUMBER TWO,
AB 2167. CERVANTES. MOTION IS
DUE. PASS TO APPROPRIATIONS.
CALDERON. AYE. CALDERON AYE.
CHEN. ALVAREZ BAUER-KAHAN. WHICH
ONE IS NUMBER TWO? OKAY
BAUER-KAHAN. AYE. BERMAN.
GIBSON. JONES-SAWYER. LOWENTHAL
LOWENTHAL. AYE. ORTEGA. ORTEGA
AYE. JO. PATTERSON.
PETRIE-NORRIS PETRIE-NORRIS.
AYE. RUBIO. RUBIO. AYE. VALENCIA
VALENCIA. AYE. WALLACE. WALLACE.
AYE. WOOD WOOD. AYE THANK YOU,
ASSEMBLYMAN CONNELLY, WOULD YOU
LIKE TO PRESENT AB 2416? COME ON
UP
.
THANK YOU, MADAM CHAIR AND
MEMBERS. GOOD MORNING, WE'D LIKE
TO BEGIN BY THANKING THE
COMMITTEE STAFF FOR THEIR
TIRELESS WORK ON THIS BILL. AND
I WILL BE ACCEPTING THE
COMMITTEE AMENDMENTS. I'M PROUD
TODAY TO PRESENT AB 2416, A BILL
THAT WOULD REQUIRE THE
CALIFORNIA DEPARTMENT OF
INSURANCE TO REVIEW THE SAFER
FROM WILDFIRE REGULATIONS EVERY
THREE YEARS, STARTING ON OR
BEFORE DECEMBER 31ST, 2027. CDI,
IN CONSULTATION WITH CAL OES,
THE OFFICE OF PLANNING AND
RESEARCH AND CAL FIRE, WOULD
EVALUATE IF ADDITIONAL BUILDING
HARDENING MEASURES AND COMMUNITY
LEVEL WILDFIRE MITIGATION
PROGRAMS SHOULD BE INCLUDED IN
THE SAFER FROM WILDFIRES
PROGRAM. THIS IS AN ISSUE THAT
IS NEAR AND DEAR TO COMMUNITIES
THROUGHOUT THE STATE, WHERE
WILDFIRE RISKS ARE HIGH. I DON'T
NEED TO TELL YOU THAT AN
INSURANCE IS INCREASINGLY
UNAFFORDABLE AND ABSENT. MY
DISTRICT SPECIFICALLY HAS
EXPERIENCED SOME OF THE WORST
WILDFIRES IN RECENT HISTORY AND
I LOOK TO MY GOOD FRIEND FROM
HEALDSBURG REPRESENTING THE
ADJACENT DISTRICT THAT HAS
SUFFERED IMMENSELY, AND I'M
CONSTANTLY TALKING TO FOLKS WHO
ARE DOING EVERYTHING THEY CAN
WITH THEIR OWN MONEY TO PROTECT
THEIR HOMES AND COMMUNITIES FROM
THE NEXT DISASTER. THE SAFER
FROM WILDFIRES PROGRAM IS THE
ONLY AVENUE OPEN TO CONSUMERS TO
RECEIVE DIRECT DISCOUNTS FOR
HARDENING THEIR HOMES AND
NEIGHBORHOODS. THESE INSURANCE
DISCOUNTS ARE A GREAT INCENTIVE,
AND IT COSTS THE STATE NOTHING
TO OFFER IT. IT'S PRECISELY WHAT
WE WANT FOLKS TO BE DOING WITH
THEIR OWN HOMES AND THEIR OWN
COMMUNITIES, RIGHT NOW, THERE IS
NO REQUIREMENT FOR CDI TO OPEN
UP THE REGULATIONS FOR
EVALUATION AS NEW AND SAFER
BUILDING MATERIALS COME TO
MARKET AND WILDFIRE PREVENTION
METHODS EVOLVE, IT IS IMPORTANT
THAT WE PERIODICALLY REVISIT THE
REGULATIONS AND EVALUATE IT. IF
THEY CAPTURE THE BEST MITIGATION
PRACTICES AVAILABLE AND IF THE
REGULATIONS ARE OFFERING AS MUCH
RELIEF AS POSSIBLE TO THE PEOPLE
WHO ARE DOING THE RIGHT THING.
WE HAVE MADE SIGNIFICANT
AMENDMENTS TO THE BILL TO
ADDRESS THE CONCERNS OF THE
INDUSTRY, INCLUDING A THREE YEAR
DELAY TO ALLOW FOR ONGOING
EFFORTS TO SHORE UP THE
INSURANCE MARKET TO FINISH, AND
FOR CDI TO CLEAR ITS CURRENT
APPROVAL BACKLOG. IN FACT, IN
THE PREVIOUS VERSION OF THIS
BILL, WE WERE SPECIFICALLY
CALLING OUT THE INSURANCE
INDUSTRY AS STAKEHOLDERS THAT
CDI MUST CONSULT WITH WHEN
REVIEWING THE REGULATIONS. WE
HAVE ALSO WORKED TO ENSURE THAT
THERE IS NO PROP 103 ISSUE WITH
THIS BILL. AGAIN, ALL THIS BILL
DOES IS REQUIRE CDA TO
PERIODICALLY EVALUATE WHETHER OR
NOT THESE REGULATIONS NEED TO BE
UPDATED TO REFLECT FUTURE NEEDS
OF CONSUMERS AND THE INDUSTRY.
THE FINAL SAY WILL BE LEFT WITH
THE INSURANCE COMMISSIONER,
WHILE CDA WORKS ON OTHER
STRATEGIES TO IMPROVE THE
INSURANCE MARKET IN CALIFORNIA,
THE AB 2416, WE WOULD SUBMIT, IS
A REASONABLE STEP. THE
LEGISLATURE CAN TAKE TO HELP
CONSUMERS SAVE MONEY ON THEIR
INSURANCE BILLS AND REDUCE THE
RISK OF DISASTER FOR VULNERABLE
COMMUNITIES AND THE FAMILIES
THAT LIVE THERE. SO WITH ME TO
TESTIFY TODAY IS MELANIE LAU
WITH THE NORTH AMERICAN
INSULATION MANUFACTURERS
ASSOCIATION. MELANIE, THANK YOU.
ASSEMBLY MEMBER CONNOLLY, MADAM
CHAIR AND COMMITTEE MEMBERS, AS
MENTIONED, MY NAME IS MELANIE
LAU. HERE ON BEHALF OF THE NORTH
AMERICAN INSULATION
MANUFACTURERS ASSOCIATION IN
SUPPORT OF AB 2416, NEMA IS THE
TRADE ASSOCIATION FOR NORTH
AMERICAN MANUFACTURERS OF
FIBERGLASS, STONE, WOOL AND SLAG
WOOL INSULATION PRODUCTS. AS
PART OF OUR ROLE, WE SUPPORT
POLICIES THAT PROMOTE PASSIVE
FIRE PROTECTION STRATEGIES AND
WILDLAND URBAN INTERFACE AREAS
TO HELP REDUCE FIRE SPREAD,
SEVERITY AND LOSS OF LIFE AND
PROPERTY. AS ASSEMBLY MEMBER
CONNOLLY MENTIONED, AB 2416
WOULD REQUIRE CDI TO REVIEW THE
SAFER FROM WILDFIRE REGULATIONS
EVERY THREE YEARS AND DETERMINE
IF ADDITIONAL BUILDING HARDENING
MEASURES AND COMMUNITY LEVEL
WILDFIRE MITIGATION PROGRAMS
SHOULD BE ADOPTED TO FURTHER
INCENTIVIZE CALIFORNIA CONSUMERS
TO ADOPT HOME HARDENING MEASURES
THAT WILL REDUCE THEIR WILDFIRE
RISK. THE FIRST EVALUATION WILL
TAKE PLACE THREE YEARS FROM NOW
UNDER THE NEXT INSURANCE
COMMISSIONER. AS PART OF CDI'S
FIRST EVALUATION. THEY ARE
REQUIRED TO CONSIDER INTEGRATING
FIRE SAFE BUILDING MATERIALS,
SUCH AS THOSE ON THE STATE FIRE
MARSHAL'S BUILDING MATERIALS.
LISTING THESE FIRE SAFE BUILDING
MATERIALS ON THE BML HAVE ALL
BEEN TESTED AND CERTIFIED BY
STATE FIRE MARSHAL ACCREDITED
LABORATORIES FOR THEIR FIRE
SAFETY PERFORMANCE. THE MOST
STRINGENT AND FIRE PROTECTIVE
BUILDING MATERIALS ON THE BML
ARE CATEGORIZED AS NON
COMBUSTIBLE. WE SUPPORT THE
AUTHOR'S EFFORTS TO ENCOURAGE
CDI TO ADD NONCOMBUSTIBLE
BUILDING MATERIALS TO THE SAFER
FROM FILED WILDFIRE REGULATIONS.
THIS WILL HELP TO ACCELERATE THE
ADOPTION OF BML CERTIFIED
BUILDING MATERIALS IN WILDFIRE
PRONE AREAS. REVIEWING THE SAFER
FROM WILDFIRE REGULATIONS EVERY
THREE YEARS WILL GIVE CONSUMERS,
FIRE SERVICE PROFESSIONALS AND
INSURANCE PROVIDERS AN
OPPORTUNITY TO EXAMINE THE
EFFECTIVENESS OF THE REGULATIONS
AND MAKE NECESSARY CHANGES THAT
WILL FURTHER THE INTENT OF THE
REGULATIONS TO INCENTIVIZE
CONSUMERS TO REDUCE THEIR
WILDFIRE RISK. FOR THESE REASONS
, WE ENCOURAGE YOUR SUPPORT AND
RESPECTFULLY ASK FOR AN AYE VOTE
. THANK YOU. DO WE HAVE ANY
ADDITIONAL SUPPORT IN THE ROOM?
OKAY. SEEING NONE, DO WE HAVE
ANY OPPOSITION? PLEASE COME
FORWARD
.
OKAY. THANK YOU. GOOD MORNING,
MADAM CHAIR AND MEMBERS SARAH
AND TAYLOR, ON BEHALF OF THE
PERSONAL INSURANCE FEDERATION OF
CALIFORNIA AND WE DO APPRECIATE
THE EFFORTS OF THE AUTHOR AND
THE COMMITTEE TO REFINE THE
BILL. BUT UNFORTUNATELY, OUR
CONCERNS REMAIN, AND WE ARE
STILL OPPOSED, AB 2416, AS YOU
HEARD, SEEKS TO INCLUDE
NONCOMBUSTIBLE CONSTRUCTION
MATERIALS INCLUDED BY THE OFFICE
OF THE STATE FIRE MARSHAL AND
THE BUILDING MATERIALS LIST AS
PART OF THE NEWLY ADOPTED SAFER
FROM WILDFIRE REGULATIONS.
HOWEVER FOR THE SAFER FROM
WILDFIRE REGULATIONS ARE NOT
INTENDED TO BE A PLACE FOR
LISTING PRODUCTS APPROVED BY THE
STATE FIRE MARSHAL. IT'S
SUPPOSED TO REFLECT A SYSTEM OF
PARTIAL LEVEL MITIGATION THAT
HAS BEEN DEMONSTRATED BY FIRE
SCIENCE TO RESULT IN MEANINGFUL
REDUCTION IN RISK AND LOSS THAT
CAN BE ACTUARIALLY JUSTIFIED.
WE'RE CONCERNED THAT AB 2416
WOULD OPEN THE DOOR FOR MANY
PRODUCTS THAT WILL SEEK TO BE
ADDED, REGARDLESS OF THEIR
EFFICACY IN REDUCING WILDFIRE
LOSSES OR AN INSURER'S ABILITY
TO ASSESS THEIR WORTH. THIS WILL
SIGNIFICANTLY DIMINISH THE VALUE
OF THE MITIGATION REGULATIONS
AND UNDERMINE THE CONSISTENT
APPROACH TO RISK REDUCTION THAT
IS CRITICAL FOR SUCCESS.
FURTHER, WE'RE CONCERNED THAT
ANY ADDITIONS TO THE REGULATIONS
WILL RESULT IN THE CURRENT
WILDFIRE RISK MODELS BEING
SUBJECT TO A LENGTHY AND COMPLEX
MODEL REVIEW PROCESS. UNDER
THESE NEWLY PROPOSED CDI
CATASTROPHE RISK MODELING
REGULATIONS. NOW, THIS WILL
NEGATIVELY IMPACT AN INSURER'S
ABILITY TO USE THE MODELS AND
INTERFERE WITH THEIR CAPACITY TO
MAKE TIMELY RATE FILINGS THAT
INCREASE INSURANCE AVAILABILITY.
THUS, WHILE WE DO AGREE THERE IS
MERIT TO CDI ENGAGING IN
PERIODIC UPDATES TO THE SAFER
FROM WILDFIRE REGULATIONS THAT
REFLECT INNOVATIONS IN FIRE
SCIENCE, IT'S IMPORTANT WE FIRST
PROVIDE STABILITY TO ADDRESS THE
CURRENT INSURANCE CRISIS, AND WE
REALLY DO NEED TO SEE HOW THESE
NEW REGULATIONS ARE GOING TO
INTERACT WITH THE NEW CAP MODEL
REGULATIONS, BECAUSE ANYTHING
THAT CHANGES IN IN THE WILDFIRE
IN THE SAFER FROM WILDFIRE
REGULATIONS CAN TRIGGER THIS
REALLY COMPLEX REVIEW. AND THEN
AND THEN WE'RE NOT ABLE TO USE
THOSE MODELS AND WE DON'T EVEN
UNDERSTAND HOW THAT'S GOING TO
INTERACT YET. SO, IN ANY CASE,
RESPECTFULLY ASKED FOR A NO
VOTE. AND THANK YOU, MARK
SEGMENT WITH THE AMERICAN
PROPERTY CASUALTY INSURANCE
ASSOCIATION, I WANT TO SAY THAT
THE INSURANCE INDUSTRY HAS
STRONGLY IN SUPPORT OF
MITIGATION STANDARDS. THE
INSTITUTE FOR HOME AND BUILDING
SAFETY, WHICH IS SPONSORED BY
THE INSURANCE INDUSTRY, IS THE
LEADING SCIENTIFICALLY BASED
MITIGATION STANDARD DEVELOPER.
AND SO WE DO ADHERE TO THOSE. I
THINK THE PROBLEM WITH THIS BILL
IS IT'S MUCH A PROCESS. ONE. AND
IF WE LOOK AT WHAT'S GOING ON
WITH THE CURRENT REGULATIONS AT
CDI, I THINK WE CAN SEE WHAT
SOME OF THE ISSUES MIGHT BE,
CURRENTLY THE DEPARTMENT ADOPTED
REGULATIONS LAST APRIL, AFTER
GIVING COMPANIES 180 DAYS TO
COMPLY WITH THE NEW REGULATIONS.
IT IS ALMOST A YEAR OUT. ONLY
TWO OF THE RATE FILINGS AND
COMPLIANCE WITH THOSE
REGULATIONS HAVE BEEN ADOPTED,
SO YOU CAN SEE WHAT THE HUGE
DELAY WILL BE. NOW WHEN YOU
START LAYING IN A THREE YEAR
CYCLE AND THEN ADD THAT TO THE
CHANGES THAT HAVE TO BE MADE TO
THE CATASTROPHE MODEL, WHAT
YOU'RE GOING TO END UP WITH, I
THINK, IS A LOT OF CHURNING AND
AN INABILITY OF INSURERS TO USE
THESE MODELS, WHICH THEY
DESPERATELY NEED. THE DEPARTMENT
OF INSURANCE ALREADY HAS THE
ABILITY TO UPDATE THEIR
REGULATIONS WHEN THEY FEEL
THEY'RE IMPORTANT. ANOTHER
IMPORTANT STANDARD OF THE
REGULATIONS, AS THE DEPARTMENT
ADOPTED THEM, IS THEY WANTED TO
MAKE SURE THAT THESE WERE
MITIGATION STANDARDS THAT PEOPLE
COULD READILY ACCEPT AND READILY
DO, THAT WEREN'T TERRIBLY
ONEROUS. NOW WE DO HAVE PROBLEMS
WITH THE WILDFIRE REGULATIONS
BECAUSE WE BELIEVE, AS IVES HAS
SAID, THAT MITIGATION NEEDS TO
BE A SUITE OF ACTIVITIES. YOU
CAN'T PICK AND CHOOSE. IT'S NOT
A MENU. AND THE REGULATIONS
WOULD ALLOW THAT. AND BY NOW,
ADDING COMPONENTS AND SUCH LIKE
THAT, YOU ONLY CONTINUE THAT
BELIEF THAT A HOMEOWNER CAN PICK
AND CHOOSE SOMETHING AND GET AN
INSURANCE DISCOUNT. WE'RE STILL
IN THE STANDARD OF NOT YET
HAVING THE ACTUAL DATA TO
UNDERSTAND WHERE WILDFIRE
MITIGATION COMES FROM. REMEMBER
WILDFIRE MITIGATION SCIENCE IS
RELATIVELY YOUNG. IT'S ONLY BEEN
AROUND FOR 5 OR 6 YEARS SINCE WE
HAD THE MAJOR WILDFIRES IN 2017,
2018. THANK YOU. THANK YOU. DO
WE HAVE ANY PUBLIC COMMENT IN
THE ROOM? GOOD MORNING, CHAIR
AND MEMBERS. GOOD MORNING, CHAIR
AND MEMBERS, NAOMI PADRONA, ON
BEHALF OF THE PACIFIC
ASSOCIATION OF DOMESTIC
INSURANCE COMPANIES, IN
RESPECTFUL OPPOSITION. THANK
YOU. OKAY. WE'RE GOING TO BRING
IT BACK TO THE COMMITTEE FOR
QUESTIONS. ASSEMBLYMEMBER KHN,
THANK YOU, ASSEMBLY MEMBER, FOR
THIS BILL. I KNOW YOU AND I LAST
WEEK WITH ASSEMBLYMEMBER
PELLERIN TOOK THE BRUNT OF THE
NON-RENEWALS THAT OCCURRED IN
THE BAY AREA. AND OVER HALF MY
CITY WAS NON-RENEWED LAST WEEK
IN A CITY WHERE WE HAVE THE
STRONGEST WILDFIRE MITIGATION
ORDINANCES IN THE STATE. I HAVE
A FIRE CHIEF WHO GOES HOUSE TO
HOUSE AND MEASURES THE HEIGHT OF
THE TREES, THE DISTANCE FROM THE
HOUSE TO ENSURE THAT THE HOUSES
ARE PROTECTED FROM WILDFIRE RISK
AND THEY WERE ALL HALF OF THEM
WERE NON-RENEWED. SO I
APPRECIATE THE INSURANCE
INDUSTRY BEING HERE TALKING
ABOUT WHAT PARCEL LEVEL WILDFIRE
MITIGATION, SINCE I'M SEEING
FIRSTHAND THAT THAT DOESN'T
APPEAR TO BE WHAT MATTERS, BUT I
KNOW THAT WHAT YOU'RE LOOKING AT
HERE IS WHAT WE'RE BEING TOLD IN
WILDFIRE RISK NEIGHBORHOODS,
WHICH IS THAT THE PARCEL LEVEL
MATTERS, THAT YOU SHOULD BE
DOING THOSE THINGS, TRIMMING THE
TREE UP, MOVING BACK FROM THE
HOUSE, ALL OF IT. CLEANING YOUR
GUTTERS. I KNOW, BECAUSE I DO
IT, BUT THAT ALSO WHAT MATTERS
IS WHAT YOUR ROOF IS MADE OF.
AND THAT THE SPARKS CAN'T FLY IN
THROUGH THE GRATES, THAT THERE
ARE THINGS THAT YOU CAN DO ON
THEM HOME LEVEL THAT WILL ALSO
PREVENT YOUR HOUSE FROM BURNING
DOWN. AND I THINK THAT WHAT OUR
COMMUNITIES HAVE BEEN ASKED,
WHICH IS FAIR ON THE WILDLAND
URBAN INTERFACE, IS TO DO THAT
WORK AND TO MAKE OUR OUR HOUSES
SAFER SO THAT OUR COMMUNITIES
WITHSTAND, THE CLIMATE CHANGE
CAUSED AND OTHER CAUSED
WILDFIRES THAT ARE HAPPENING
ACROSS THE WILDLAND URBAN
INTERFACE AND IN THE WILDLAND,
AND SO I THINK THIS BILL, IT
SOUNDS LIKE THE OPPOSITION WANTS
TO MAKE SURE THEY CAN USE THE
MODELS WHILE THERE IS
REEVALUATION. I GUESS I WANT TO
ASK YOU BECAUSE I KNOW YOU, LIKE
ME, WANT OUR CONSTITUENTS TO
HAVE INSURANCE, ARE NOT TRYING
TO STOP THEM FROM USING THOSE
MODELS WHILE REEVALUATION
HAPPENS. I DON'T THINK THERE
SHOULD BE ANYTHING THAT STOPS
THE CONTINUED USE OF A MODEL.
WHILE WE'RE REEVALUATING FOR A
FUTURE MODEL, BUT I'M SURE YOU
CAN ADDRESS THAT. AND IN
ADDITION, OAN, I DON'T THINK
THAT WHAT YOU WANT HERE IS TO
INCLUDE THINGS THAT ARE NOT
SCIENTIFICALLY PROVEN TO CAUSE
TO NOT PREVENT WILDFIRES, WHICH
ALSO SEEMS LIKE AN EASY FIX. SO
I GUESS I WANT YOU TO ADDRESS
THAT, BECAUSE I THINK THAT WHAT
YOU'RE TRYING TO DO IN THIS
BILL, WHICH IS GIVE US REAL
ANSWERS OF WHAT WE CAN DO TO
RETAIN INSURANCE TO PROTECT OUR
COMMUNITIES IS ACTUALLY VALUABLE
. THANK YOU FOR THAT
OPPORTUNITY. AND I COULD NOT
HAVE SAID IT BETTER AND
APPRECIATE THAT YOU AND YOUR
COMMUNITIES ARE SUFFERING FROM
SOME OF THE SAME THINGS. FIRST
OF ALL, TO DISPEL ANY NOTION
THAT SOMEHOW WE'RE TRYING TO
SUGGEST WE SHOULD MOVE AWAY FROM
COMMUNITY LEVEL BEALL,
APPROACHES. WE'RE NOT DOING THAT
. THE BILL HAS SAYS NOTHING IN
THAT REGARD. I WAS ALSO STRUCK
BY THE INDUSTRY'S APPARENT VIEW
AS EXPRESSED IN THEIR LETTER,
THAT SOMEHOW INDIVIDUAL LEVEL
ACTIONS DO NOT MAKE A DIFFERENCE
OR ENOUGH OF A DIFFERENCE. NOT
ONLY DOES THAT FLY IN THE FACE
OF SOME OF THE POLICY DIRECTION
WE'RE TRYING TO PUSH, IT FLIES
IN THE FACE OF REALITY. I'LL
NEVER FORGET THAT. I PERSONALLY
TOOK A TOUR OF THE AFTERMATH OF
THE GLASS FIRE IN EAST SANTA
ROSA SEVERAL YEARS AGO, AND IT
WAS ASTOUNDING THAT YOU COULD
WALK THROUGH A NEIGHBORHOOD
WHERE THE FIRE HAD SWEPT THROUGH
. ONE HOUSE WOULD BE STANDING
ESSENTIALLY UNAFFECTED, WHILE
NEXT TO IT WAS A HOUSE BURNED
DOWN. THE NEXT ONE UNTOUCHED,
AND SO ON. AND SO FORTH. GUESS
WHAT THE X FACTOR WAS FOR THOSE
HOMES THEY HAD DONE? THE
VEGETATION MANAGEMENT. THEY HAD
DONE THE WORK ON THEIR ROOFS AND
EAVES. SO YOU'RE NOT GOING TO BE
ABLE TO CONVINCE ME, AS SEEMS TO
BE SUGGESTED HERE, THAT SOMEHOW
INDIVIDUAL LEVEL ACTIONS DON'T
MAKE A DIFFERENCE. THEY DO THIS,
FRANKLY, AND WITH RESPECT, I
DON'T KNOW WHAT VERSION OF THE
BILL WE'RE TALKING ABOUT AT THIS
POINT. WE LITERALLY AMENDED OUT
ANY REFERENCE TO SPECIFIC
BUILDING MATERIAL. OKAY, SO
THAT'S A NON-ISSUE AT THIS POINT
. BUT, THIS IS REALLY NOW
ESSENTIALLY LET'S HAVE THE
REVIEW. LET'S BRING THE
STAKEHOLDERS TO THE TABLE. LET'S
HAVE BEST PRACTICES ON BUILDING
MATERIALS, WHICH WE KNOW CHANGE
OVER TIME. THAT'S THE PREMISE OF
THE BILL. AND LET'S GET SERIOUS
ABOUT THIS. AND WE WOULD LIKE TO
HAVE THE INDUSTRY AT THE TABLE.
TO ME THIS SEEMS LIKE JUST AN
EFFORT TO OPPOSE ANY CHANGE,
ASSEMBLYWOMAN PETRIE-NORRIS, YOU
HAVE A QUESTION? YEAH. AND THANK
YOU, ASSEMBLY MEMBER, FOR, FOR
THAT THAT RESPONSE, BECAUSE
WHILE I, YOU KNOW,
WHOLEHEARTEDLY SUPPORT WHAT YOU
ARE TRYING TO DO WITH THIS BILL
AND THINK IT'S SUPER IMPORTANT
FOR US TO FIND WAYS TO
INCENTIVIZE CALIFORNIANS TO DO
WHAT WE KNOW WILL KEEP THEIR
HOMES AND OUR COMMUNITY SAFE,
AND THAT WE NEED TO ENSURE THAT
THEY ARE THEN REWARDED FOR THAT.
AND THAT'S REFLECTED IN RATES.
I, I DO THE OPPOSITION'S
CONCERNS AROUND, YOU KNOW,
POTENTIAL INCONSISTENT SOURCES
AND THE OPPORTUNITY FOR NEW
MANDATES TO ADD CONFUSION TO
WHAT IS ALREADY VERY CONFUSING
SITUATION, THAT CONCERN DOES
RESONATE WITH ME. SO IF YOU
COULD SORT OF SPEAK TO THAT AND
I GUESS SPEAK TO HOW CAN WE MOVE
THIS BILL FORWARD IN A WAY THAT,
DOESN'T JUST LAYER ADD A LAYER
OF CONFUSION. SO THE WHAT WE'RE
TRYING TO DO WITH, WITH
INSURANCE RIGHT NOW, THE PREMISE
OF NOW DELAYING FOR THREE YEARS
IS, IS IT THAT I WOULD LIKE TO
BELIEVE THE DEPARTMENT OF
INSURANCE CAN CLEAR UP ANY RATE
BACKLOG, THIS THIS SAFER FROM
WILDFIRE IS PART OF THE STRATEGY
. THIS IS NARROWLY ADDRESSING
THAT, WE ARE ALSO, AS WE ALL
KNOW, CONSIDERING CATASTROPHE
MODELING, THE INTEGRATION OF
REINSURANCE COSTS IN Dð RATES
WERE ALL OPEN TO THAT, AGAIN,
THAT'S WHY IT'S SURPRISING TO ME
THAT THERE'S PUSHBACK,
PARTICULARLY GIVEN THE
AMENDMENTS, WHERE, AND AS WAS
NOTED, ACTUALLY, THIS WILL BE A
NEW INSURANCE COMMISSIONER BY
THEN AS WELL. SO HOPEFULLY WE
CAN WORK THROUGH A LOT OF THE
BACKLOGS, CONTINUE TO REFINE THE
OVERALL SET OF SOLUTIONS THAT
WE'RE ALL LOOKING AT. BUT WE GOT
TO GIVE SOMETHING TO CONSUMERS,
AT THE END OF THE DAY, I WAS ON
THE WORKING GROUP LAST YEAR, AND
FRANKLY, ALL THESE ISSUES WERE
ON THE TABLE. BUT I THINK THIS
BODY AND THE MEMBERS OF THAT
WORKING GROUP, AT THE END OF THE
DAY FELT THAT THERE NEEDS TO BE
SOME MOVEMENT TOWARD RECOGNIZING
THE CONSUMER PIECE OF THIS. AND
IF PEOPLE ARE ACTUALLY DOING THE
THINGS WE'RE ASKING THEM TO DO
WITH THEIR HOMES, THAT THEY
SHOULD BE REWARDED WITH
DISCOUNTS, LET ALONE IDEALLY,
KEEPING THEIR INSURANCE. YEAH.
THANK YOU. I WAS JUST JUST GOING
TO GO THERE. JUST LET ME THROW
IT OUT THERE. MAYBE THEY ALSO
OUGHT TO BE ABLE TO KEEP THEIR
INSURANCE. YES. IF THEY'RE DOING
THIS AS WELL. SO I THINK THIS IS
A GOOD MOVE TOWARD CONTINUING TO
STRENGTHEN, A CONSUMER PIECE OF
THE EQUATION. AND THAT IS A
SAFER FROM WILDFIRES DISCOUNT
PROGRAM. I, FRANKLY, WOULD LIKE
TO GO FURTHER. I THINK THERE
SHOULD BE A MOVE TOWARDS SOME
SORT OF RECOGNITION THAT THOSE
CONSUMERS DOING THAT SHOULD NOT
LOSE OUR INSURANCE AS WELL. BUT
THAT'S FOR ANOTHER DAY.
ASSEMBLYMAN WOULD, FIRST OF ALL,
THANK YOU. ASSEMBLYMEMBER
CONNOLLY. I THINK AS THE MEMBER
WHO'S LOST THE MOST NUMBER OF
HOMES, HAD THE LARGEST NUMBER OF
ACRES BURNED IN WILDFIRES IN
RECENT YEARS, I SHARE SOME OF
YOUR CONCERNS AND FRUSTRATIONS.
FROM MY PERSPECTIVE, THE,
EFFORTS BY CONSUMERS, TOWARDS
HOME HARDENING ISN'T HAPPENING
FAST ENOUGH, AND IT CERTAINLY
DOESN'T APPEAR TO BE HAPPENING
AS MUCH AT THE COMMUNITY LEVEL
AS, AS WE AS WE OUGHT TO SEE.
AND I'LL JUST GIVE YOU AN
EXAMPLE. IN MY NEIGHBORHOOD, I
WALK, WITH MY WIFE AND MY DOG ON
A REGULAR BASIS, PAST THREE
HOMES THAT SIT ARE PERCHED ON A
HILL, AND TWO OF THE HOMES HAVE
DONE AN AMAZING JOB IN, WILDFIRE
PROTECTION, IT'S FABULOUS WHAT
THEY'VE DONE. A THIRD HOME
HASN'T DONE HARDLY ANYTHING.
NOW, IF I'M AN INSURER AND I'M
LOOKING AT THAT OVERALL
SITUATION, THOSE TWO HOMES ARE
THOSE FOLKS THAT DID EVERYTHING
POTENTIALLY POSSIBLE, THEY'RE
STILL AT SIGNIFICANT RISK. AND
SO UNTIL WE GET OUR ARMS AROUND
AND GET CONSUMERS TO REALLY
EMBRACE A COMMUNITY HOME
HARDENING, WE'RE GOING TO HAVE
CONTINUED TO CONTINUED RISK. I
FIND MYSELF DRIVING WHENEVER I
DRIVE ANYWHERE. I'M LOOKING AT
WILDFIRE RISK. I'M LOOKING AT
DENSE VEGETATION AND FRANKLY,
I'M CONCERNED THAT EVEN WITH THE
INCREDIBLE LOSSES THAT WE HAVE
HAD IN, IN OUR AREA, WHEN I
VISIT FAMILY IN SOUTHERN
CALIFORNIA, IT FEELS LIKE, THEY
HAVEN'T REALLY BEEN AWARE THAT
THERE'S A CRISIS IN, AND THAT
THEY NEED TO DO ANYTHING ABOUT
THAT. SO, I WISH I COULD SHARE
YOUR YOUR BELIEF THAT THE
BACKLOG OF RATE FILINGS WOULD BE
SOLVED. I THINK WE'RE STILL HAVE
ABOUT 95 THAT ARE LANGUISHING IN
THAT SAME 90. THAT NUMBER WAS
CONSISTENT BACK IN SEPTEMBER.
WIENER. SO MY ONE OF MY CONCERNS
AND I WANTED TO SAY, I
ABSOLUTELY APPRECIATE WHAT
YOU'RE DOING AND I SUPPORT,
SUPPORT WHAT YOU'RE DOING HERE.
AND I DO APPRECIATE THAT YOU'RE
PUSHING BACK THE DATE BECAUSE I
THINK IT IS IMPORTANT, AS I
START TO WE START TO LOOK AT
WHAT'S GOING TO HAPPEN HERE AS
THE NEW REGULATIONS. MOVE
FORWARD. AND I WILL SAY THIS AT
A GLACIAL PACE AT WHICH WE ARE
WAITING FOR THIS. I'M REALLY,
REALLY FRUSTRATED THAT WE ARE
NOW, SEVERAL MONTHS AND WE ONLY
HAVE ONE OF THESE REGULATIONS IN
FRONT OF US, ONCE THESE
REGULATIONS ARE ALL IN PLACE, A
LOT OF INSURERS ARE GOING TO BE
ASKING FOR A RATE FILING. ALL AT
ONCE, POTENTIALLY. AND IF YOU
THINK THE BACKLOG IS BAD NOW,
WAIT TILL YOU SEE THAT. SO I
DON'T SEE RELIEF FOR CONSUMERS
UNTIL 2026, YOU KNOW, BECAUSE
MAYBE, YOU KNOW, OR MAYBE MAYBE
INSURERS WILL SAY, HEY, WE'RE A
WE'RE COMFORTABLE WITH THE WAY
THINGS ARE GOING. WE'RE GOING TO
LOOSEN THINGS UP HERE, AND THEY
MIGHT WANT TO, BUT THEY MAY NOT
BE ABLE TO DO THAT BECAUSE OF
THE GLACIAL PACE AT WHICH THE
RATE FILINGS ARE MOVING FORWARD.
SO AND I JUST WANT TO SAY I
DON'T THIS IS NOT DIRECTED AT
THE INSURANCE COMMISSIONER. I
THINK HE IS PUSHING FORWARD ON
THIS, AND I APPRECIATE HIS
EFFORTS THERE. BUT I'M
DISAPPOINTED WITH WHAT WE'RE
SEEING, OR THE LACK OF PROGRESS.
I DON'T KNOW, QUITE FRANKLY. HOW
LONG DOES IT TAKE TO WRITE A
REGULATION, FOR CRYING OUT LOUD?
SERIOUSLY, TOO LONG. APPARENTLY.
IT'S LIKE, I DON'T UNDERSTAND.
THIS IS A CRISIS, AND WE NEED TO
BE TREATING IT AS A CRISIS. AND
I APPRECIATE WHAT YOU'RE DOING
HERE BECAUSE YOU RECOGNIZE, AS I
DO, THE CHALLENGES WE FACE HERE.
BUT IT APPEARS WE HAVE AN AGENCY
THAT DOESN'T. AND I'M REALLY
FRUSTRATED BY THAT. SO SORRY.
THIS IS PROBABLY GONE BEYOND THE
SCOPE OF YOUR LEGISLATION HERE.
BUT BUT EVEN EVEN IN SOME OF THE
THERE WAS EVEN A BUDGET ITEM
AROUND MONEY THAT WAS ALLOCATED
THROUGH OES FOR COMMUNITY.
WILDFIRE MITIGATION THAT HASN'T
BEEN SPENT. I WAS LIKE, WHY
HAVEN'T WE? WHY WASN'T THAT
SPENT? SO THAT IS GOING TO BE
CLAWED BACK. THAT'S GOING TO BE
CLAWED BACK. AND IT'S LIKE WHAT
WE HAD OPPORTUNITIES LAST YEAR.
THERE WASN'T THERE WASN'T MUCH
GOING ON. WHY HASN'T SOME OF THE
RESOURCES THAT WE'VE ALLOCATED
HERE TO MOVE FORWARD ON THESE
PROJECTS NOT BEEN SPENT? WE HAVE
AMPLE OPPORTUNITY AND TO DO
THAT. SO I'M I GUESS I'M
FRUSTRATED ON MANY LEVELS. I
JUST I GUESS I'LL GET OFF MY
SOAPBOX HERE. SUPPORT YOUR BILL.
WISH I HAD THE FAITH THAT THE
BACKLOG WAS GOING TO HAPPEN
FASTER, AND WE NEED TO FOCUS ON
COMMUNITY AS WELL AS INDIVIDUAL
HOME HARDENING. SO THANK YOU.
OKAY. DO WE HAVE ANY OTHER
QUESTIONS FOR THE AUTHOR FROM
THE COMMITTEE? SURE AND I AND I
APPRECIATE WHAT YOU'RE WHAT
YOU'RE TRYING TO DO. I MEAN,
WHEN, WHEN I, WHEN I WORKED FOR
THE CITY OF LOS ANGELES AND THE
PLANNING DEPARTMENT, THE PEOPLE
WOULD COME TO ME AND THEY WANTED
TO BUILD THEIR HOMES ON THE SIDE
OF A HILL, A CLIFF OVERLOOKING
THE OCEAN. BEAUTIFUL AND
EVERYTHING. BUT IT WAS A VERY
GOOD CHANCE IT WAS GOING TO FALL
OFF INTO THE OCEAN. AND THEY
WOULD SAY, WE DON'T HAVE TO DO
THIS IN IN MISSISSIPPI. WE DON'T
HAVE TO DO THIS IN NEW YORK. ALL
THESE REGULATIONS THAT THE
DEPARTMENT OF BUILDING AND
SAFETY, FIRE DEPARTMENT, PUBLIC
WORKS, ALL THOSE REQUIREMENTS
THAT THEY WOULD PUT ON THEM,
THEY REALLY DIDN'T UNDERSTAND IT
WAS FOR THEIR SAFETY AND THE
SAFETY OF EVERYBODY AROUND THEM.
AND IT WAS REALLY DIFFICULT TO
GET ESPECIALLY PRIVATE OWNERS TO
UNDERSTAND THAT BECAUSE WHAT
THEY WANTED, WHAT THEY WANTED,
THEY WANTED TO BUILD A MEGA
MANSION, THEY WANTED TO BUILD
WHAT THEY WANTED TO BUILD. AND,
THANK GOD THAT, AS THE PLANNING
DEPUTY, THE, THE DEPARTMENT'S
PUSHED BACK ON ME WHEN I SAID,
IS THERE ANYTHING WE COULD DO?
AND THEY PUSHED BACK. AND I
THINK, THE CITY OF LOS ANGELES
IS A LOT SAFER NOW BECAUSE OF
THOSE INDIVIDUALS DOING THEIR
JOB, I THINK IDENTIFYING THINGS
THAT, BUILDING OWNERS CAN USE TO
ENSURE THAT THEIR HOMES, DON'T
ADD TO THE PROBLEMS THAT ARE OUT
THERE. I THINK IS ADMIRABLE, AND
IT MAY I KNOW SOME, SOME WORD
THAT IT WON'T SOLVE THE BACKLOG
AND THE PROBLEMS OF THAT, BUT IT
IS A FIRST STEP. AND I THINK
IT'S THE FIRST STEP WHERE WE
START MAYBE ONE DAY BUILDING
THINGS THAT ARE INDESTRUCTIBLE.
WOW. WOULDN'T THAT BE A NOVEL
IDEA? WHAT WHAT WOULD HAPPEN IF
WE COULD GET TO THAT POINT? WHAT
WOULD THE INSURANCE RATES BE
LIKE IF WE HAD? IF WE HAD
HARDENED OUR FACILITIES TO A
POINT WHERE THEY'RE ALMOST
INDESTRUCTIBLE FROM FROM EVEN
CATCHING FIRE OR EVEN SPREADING
WILDFIRES OR EVEN JUST SPREADING
FIRES AT ALL, WOULDN'T THAT BE
GREAT? SO AGAIN, I THANK YOU
FOR, FOR BEGINNING WITH THIS AS
SOMEONE. ALVAREZ. THANK YOU. AND
I APOLOGIZE. I WAS PRESENTING A
BILL, SO I MIGHT BE ASKING
QUESTIONS YOU'VE ALREADY
DISCUSSED, BUT, SO IN SOME OF
THE, TESTIMONY OR DOCUMENTS ON
THE OPPOSITION AND SOME MEMBER,
YOU I THINK YOU ADDRESSED THIS,
BUT JUST PLEASE CLARIFY FOR ME,
THERE'S A CONCERN THAT, THE BILL
AND MAYBE IT WAS A PREVIOUS
VERSION, AS YOU CLARIFIED
EARLIER, ESSENTIALLY LISTED SOME
OF THE HARDENING AND BUILDING
MATERIAL THE WAY SO THE BILL
THAT I'M READING THAT'S BEFORE
US, DOES OUTLINE BUILDING
MATERIAL, BUT I BELIEVE THAT'S
IN LINE WITH WHAT IS ALREADY IN
THE CALIFORNIA BUILDING
STANDARDS. IT IS. BUT CAN YOU
THAT WAS AMENDED OUT. OKAY. SO
THERE'S NO SPECIFICALLY SPECIFIC
CALLING OUT OF BUILDING
MATERIALS. NOW OKAY. AND THEN
THE OTHER, I WAS GOING TO ASK
ONE OTHER QUESTION AS IT RELATES
TO I SHOULD HAVE WRITTEN IT
DOWN, BUT I, I HAD IT WHILE YOU
WERE SPEAKING. I GUESS THE
QUESTION THEN WOULD BE TO WHAT?
TO SOME OF THE CONCERNS THAT
YOU'VE HEARD. WHAT DO YOU
ANTICIPATE BEING SORT OF NEXT
STEPS TO REFINE, WHERE YOU WANT
TO TAKE THIS IN TERMS OF
ENSURING THAT WE APPROACH THIS
THE RIGHT WAY, GIVING SOME OF
THE FEEDBACK YOU'VE HEARD FROM
SOME OF THE COLLEAGUES? YEAH SO,
THE QUESTION, THE QUESTIONS WERE
GREAT. I THINK THE AMENDMENTS
SOUGHT TO THE OTHER BIG ISSUE
WAS THE BACKLOG OF RATE CASES.
AND THAT'S THAT'S WHY WE'VE,
EXTENDED THE DATE SIGNIFICANTLY
BY THREE YEARS. SO THIS WOULD
ACTUALLY BE A NEW COMMISSIONER.
OKAY THAT WOULD BE DOING IT JUST
JUST TO MAKE SURE I'M NOT
MISSING ANYTHING IN TERMS OF,
FROM THE OPPOSITION ON THE ISSUE
OF THE MY FIRST QUESTION, WHICH
IS THE BUILDING MATERIALS, DO
YOU RECOGNIZE NOW THAT THE BILL
DOES NOT INCLUDE THAT, OR DO YOU
HAVE QUESTIONS ABOUT THAT? WELL,
I THINK OUR POINT ON THAT WAS,
YOU KNOW, IT STILL SAYS TO GO
LOOK AT THESE AT, AT THE WHAT'S
GOING ON? THE STATE FIRE
MARSHAL'S LIST IS THAT IS IT ALL
THAT OUT IN THESE BECAUSE WE
JUST SAW THIS YESTERDAY. SO I
JUST WANT TO MAKE SURE THE WAY
IT'S AMENDED, IT'S SAYING NOW
THAT THERE'S NO REFERENCE TO ANY
BUILDING MATERIALS OR ANY
INDIVIDUAL MITIGATIONS, BECAUSE
OUR POINT HAS BEEN THAT THE WAY
THIS NEEDS TO BE APPROACHED IS
AS A SUITE OF MITIGATION IS NOT
A ONE OFF STEPS, AND INDIVIDUAL
PRODUCTS. SO THAT'S THAT'S THE
FIRST THING. THE SECOND ISSUE IS
THERE'S A NEW IT'S THERE IS THE
BACKLOG OF APPLICATIONS, BUT
THERE'S ALSO THIS INTERACTION
WITH THESE NEW CAT MODEL
REGULATIONS, WHICH WE DON'T KNOW
HOW THAT'S GOING TO INTERACT
FACT WITH THESE REGULATIONS.
RIGHT. WITH THE EXISTING
REGULATIONS. SO WHAT HAPPENS
WITH THE CAT MODEL REGULATIONS?
IT SAYS ANYTHING THAT GETS NEW
ADDED TO THIS LIST AUTOMATICALLY
TRIGGERS ALL YOUR MODELS HAVE TO
GO BACK THROUGH THIS EXTENSIVE
REVIEW PROCESS. THAT'S A YEARS
LONG PROCESS RIGHT NOW. AND SO I
THINK WHILE WE APPRECIATE THAT,
YOU'RE SAYING, HEY, WE'LL LOOK
AT THIS THREE YEARS FROM NOW, WE
RIGHT NOW DON'T KNOW KNOW HOW
THAT IS GOING TO INTERACT. SO
ANYTIME ANY NEW PRODUCT MATERIAL
MITIGATION ACTION GETS ADDED TO
THESE NEW MITIGATION REGS, THAT
IS GOING TO UNDER THE CURRENT
PROPOSAL FROM THE DEPARTMENT,
THAT IS GOING TO TRIGGER ALL
THOSE WILDFIRE RISK MODELS. AND
I DON'T THINK THIS IS THE
AUTHOR'S INTENT AT ALL. SO THAT
WASN'T, YOU KNOW, EARLIER AS A
QUESTION, I DON'T THINK THAT WAS
AT ALL THE AUTHOR'S INTENT. I
THINK MUCH LIKE WE DON'T KNOW
HOW THESE REGS ARE GOING TO PLAY
OUT, THE AUTHOR CAN'T KNOW THAT
YET EITHER. AND SO WHAT WE'RE
SAYING IS, UNTIL WE KNOW THAT
RIGHT NOW, THE WAY IT LOOKS IS
YOU ADD ANYTHING TO THE SAFER
FROM WILDFIRES LIST. AND THAT'S
GOING TO TRIGGER ALL THESE
WILDFIRE RISK MODELS. GO BACK
INTO THIS PRE-APPLICATION REVIEW
PROCESS, WHICH IS LIKE A YEARS
LONG TRIAL WITH DEPOSITIONS AND
A MODEL ADVISOR AND EXPERTS AND
SO WHILE THE THREE YEARS WAIT
AND SEE IS NICE, RIGHT NOW, IF
THAT COMES TO PASS, ALL THESE
MODELS ARE THEN GOING TO GET
PULLED BACK INTO THIS PROCESS
EVERY TIME IT GETS EVEN A SINGLE
UPDATE. SO, YOU KNOW, AS THE
BILL MOVES FORWARD, WE'RE SORT
OF DOING THIS DANCE OF TRYING TO
FIGURE OUT WHAT DO THE CAT MODEL
REGS LOOK LIKE. AND THEN WHAT DO
WE NEED TO DO TO MAKE SURE THAT
THIS BILL DOES NOT THEN PULL
EVERY MODEL BACK INTO A REVIEW
PROCESS, EVERY TIME THEY
CONSIDER A NEW MITIGATION. AND
SO IT'S JUST I DON'T BELIEVE
THAT TO BE THE INTENT OF THE
AUTHOR. NO, I DON'T THINK THAT'S
THE INTENT OF THE AUTHOR AT ALL
EITHER. THAT WOULD BE SUPPORTED.
I MEAN, THERE THERE'S ENOUGH
DELAYS THE WAY IT IS. SO, WITH
THAT UNDERSTANDING, THANK YOU
VERY MUCH. APPRECIATE IT. OKAY.
IF WE HAVE NO FURTHER QUESTIONS,
WOULD YOU LIKE TO CLOSE? YEAH,
GREAT DISCUSSION. COVERED A LOT
OF GROUND. THERE'LL BE A LOT OF
ONGOING DISCUSSIONS. THIS DOES
INTERACT WITH ALL THE OTHER
STRATEGIES THAT WE'RE LOOKING
AT. I THINK WE ALL SHARE THE
SAME GOALS OF CONFRONTING THIS
INSURANCE CRISIS THAT OUR STATE
IS FACING. SO I WOULD
RESPECTFULLY ASK FOR AN AYE
VOTE. MOVE THE BILL SECOND.
OKAY, SECRETARY, CALL THE ROLL
FILE. ITEM NUMBER THREE AB 2416
CONNOLLY MOTION IS DUE. PASS AS
AMENDED TO APPROPRIATIONS.
CALDERON I, CALDERON I CHEN.
ALVAREZ. ALVAREZ I BAUER-KAHAN.
BAUER-KAHAN I BERMAN. BERMAN I
GIBSON. GIBSON I JONES-SAWYER I
JONES-SAWYER I LOWENTHAL.
LOWENTHAL I ORTEGA. ORTEGA I
JOE. PATTERSON. PETRIE-NORRIS
RUBIO. RUBIO. I VALENCIA.
VALENCIA I WALLACE. WALLACE. NØ.
WOOD. WOOD I THINK IT'S OUT.
THANK YOU. NOW WE'RE GOING TO
CALL UP MISS RUBIO TO PRESENT AB
2735, PLEASE.
CAN WE INCREASE IT EARLY? DROP
IT THAT WAY. THAT'S FINE. IT WAS
THE PAST. YEAH. GREAT YEAH. I
WISH I'VE LOVED EVERY MINUTE.
AND I STILL DON'T HATE IT. BUT
IT'S SECOND HE WANTED TO BE
FIRST. I WAS FIRST, MISS RUBIO,
YOU HAVE A MOTION AND A SECOND,
PLEASE PROCEED WITH YOUR BILL.
THAT MEANS Þ. THANK YOU, MR.
CHAIR. AND MEMBERS FOR THE
OPPORTUNITY TO PRESENT AB 2735.
THIS BILL ARISES OUT OF CLEAR
NEED TO PROTECT BOTH CONSUMERS
AND OUR WATER PROVIDERS FROM
UNCERTAINTY POSED BY THE CURRENT
STATE OF CALIFORNIA'S INSURANCE
MARKET. THIS COMMITTEE IS NO
STRANGER TO THE UNCERTAINTY
FACED BY INSURANCE MARKET, THE
INSURANCE MARKET AND THE IMPACT
OF ITS RATE PAYERS. SOURCES
ESTIMATE THAT IT THAT THERE IS
20% LESS AVAILABILITY FOR
INSURANCE OPTIONS THAN THERE
WERE JUST A YEAR AGO. AB 2735
LOOKS TO PROVIDE STABILITY FOR
THE EXISTING MARKET BY
ESTABLISHING AN ALTERNATIVE
INSURANCE OPTION FOR OUR STATES,
JOINT POWERS AUTHORITY, IS
BASICALLY, THE COMPANIES ARE
GOING TO POOL TO PROVIDE
INSURANCE. WITH THAT, I WILL
ENTERTAIN QUESTIONS. I GOT THE
MESSAGE. WELL THAT'S FINE. YOUR
WITNESSES. YES. HI. JENNIFER
CAPETILLO, I'M THE EXECUTIVE
DIRECTOR OF THE CALIFORNIA WATER
ASSOCIATION. WE ARE THE
STATEWIDE ASSOCIATION OF THE
WATER UTILITIES THAT ARE
REGULATED BY THE CALIFORNIA
PUBLIC UTILITIES COMMISSION.
HERE IN CALIFORNIA, WE HAVE
THREE MAIN TYPES OF WATER
UTILITIES. WE HAVE INVESTOR
OWNED UTILITIES, THOSE THAT ARE
REGULATED BY THE COMMISSION. WE
HAVE MUTUAL WATER COMPANIES WHO
YOU'LL HEAR FROM TODAY. AND THEN
WE HAVE PUBLIC AGENCIES, WHICH
IS WHAT FOLKS ARE MOST FAMILIAR
WITH, 85% OF THE STATE IS SERVED
BY PUBLIC AGENCIES, PUBLIC
AGENCIES HAVE THIS AMAZING
OPPORTUNITY TO POOL FOR THEIR
INSURANCE, AND IT PROVIDES A
MUCH MORE AFFORDABLE OPTION FOR
THOSE PUBLIC AGENCY WATER
UTILITIES THAN WHAT'S AVAILABLE
IN THE PRIVATE INSURANCE MARKET.
WE HEARD A LOT TODAY OF THESE
EARLIER BILLS ABOUT HOMEOWNER'S
INSURANCE, BUT WE'RE TALKING
ABOUT PROPERTY INSURANCE FOR
WATER UTILITIES, SO I JUST WANT
TO GIVE YOU A QUICK EXAMPLE. WE
HAVE A WATER UTILITY UP IN THE
LAKE TAHOE AREA, THEY WERE
IMPACTED BY THE CALDOR FIRE BACK
IN 2021. IN 2020, THEY WERE
PAYING $43,000 A YEAR FOR
INSURANCE. TODAY, IN 2020, 2024,
THEIR QUOTE CAME BACK AT
$279,000 A YEAR FOR INSURANCE.
SO WE'RE TALKING ABOUT A
SIGNIFICANT INCREASE THAT
DIRECTLY IMPACTS WATER
AFFORDABILITY. AND THEY'RE
HAVING TO MAKE THESE DECISIONS
ABOUT WHETHER THEY INSURE
THEMSELVES OR THEY GO FORWARD
AND DO THESE FIRE HARDENING
PROJECTS. THIS, THIS UTILITY
THAT I'M TALKING ABOUT IN TAHOE,
JUST LAST MONTH, IN FEBRUARY,
THEY SENT A LETTER TO THEIR
RATEPAYERS, $21. THEY'RE
INCREASING THEIR RATES, GOING
FORWARD JUST TO BE ABLE TO PAY
FOR PROPERTY INSURANCE. THAT'S
NOT THE ALL THE OTHER
COMPREHENSIVE INSURANCE THAT
THAT WATER UTILITY NEEDS TO
EXIST. SO I JUST WANT TO SAY
THIS BILL IS ENTIRELY
PERMISSIVE. IF ANY OF THESE RISK
POOLS DON'T WANT TO TAKE OUR
WATER UTILITIES, THEY DON'T HAVE
TO. THEY SORT OF GET TWO BITES
AT THE APPLE AND DECIDING
WHETHER THEY WANT US TO
PARTICIPATE FIRST. THEY CAN JUST
HAVE THEIR REGULAR OLD BYLAWS,
SAY THEY ONLY WANT TO SERVE
PUBLIC AGENCIES, BUT SECONDARILY
, THEY GET ANOTHER BITE AT THE
APPLE WHEN THEY EVALUATE EACH
UTILITY COMPANY BY COMPANY OF
WHETHER THEY WANT TO ALLOW THEM
INTO THEIR RISK POOL OR NOT. SO
I KNOW WE'RE INSURANCE HERE
TODAY, BUT I REALLY WANT TO
STRESS THIS IS A SIGNIFICANT
WATER UTILITY AFFORDABILITY
STRATEGY. AND THAT'S WHY OUR
ASSOCIATION IS COMING FORWARD
TODAY, TO ADDRESS THIS ISSUE FOR
OUR MEMBERS. THANK YOU. THANK
YOU, MY NAME IS SUSAN ALLEN AND
I AM WITH CALIFORNIA ASSOCIATION
OF MUTUAL WATER COMPANIES AND
CALIFORNIA ASSOCIATION OF MUTUAL
WATER COMPANIES. JOINT POWERS
RISK AND INSURANCE AUTHORITY.
AND FUNDAMENTALLY, WHAT CAL
MUTUAL DOES IS WE SUPPORT ABOUT
500 VERY, VERY SMALL SYSTEMS,
PROBABLY FROM 15 TO 500
CONNECTIONS ACROSS THE STATE.
AND WE ACTUALLY INTRODUCED THE
AND SUPPORTED THE LEGISLATION
THAT'S BEING AMENDED HERE WITH
THIS, WITH THIS, REQUESTED
LEGISLATION TO BE ABLE TO SOLVE
A CRISIS SIX YEARS AGO WHERE
MUTUAL WATER COMPANIES WERE
HAVING DIFFICULTY FINDING
INSURANCE, WE'VE WE'VE REALLY
ENJOYED THE OPPORTUNITY OVER THE
LAST SIX YEARS TO HELP SYSTEMS
WITH THEIR VERY TINY, WITH THEIR
UNIQUE NEEDS AND WE ALSO HAVE
ENJOYED THE OPPORTUNITY TO
REINVEST A PORTION OF THE INCOME
THAT WE EARN IN PROVIDING
RESOURCES TO ASSIST AND SUPPORT
SMALL SYSTEMS. AND THAT'S A
COMMITMENT THAT THIS LEGISLATION
MAINTAINS, WE BASICALLY
FUNDAMENTALLY, OUR BOTTOM LINE
IS SMALL SYSTEMS NEED SUPPORT
FOR THEIR UNIQUE NEEDS. THE WE
ARE NOW SEEING THAT SMALL IOUS
ARE NO DIFFERENT THAN MUTUAL
WATER COMPANIES, AND THAT, IF
HELP IS NEEDED, WE'D LIKE TO BE
ABLE TO MAKE IT MAKE IT
AVAILABLE. SO WE ASK FOR AN AYE
VOTE ON THIS ON THIS BILL. THANK
YOU. OTHERS IN SUPPORT, PLEASE
COME FORWARD JUST YOUR NAME AND
ORGANIZATION THAT YOU REPRESENT.
THANK YOU. FAITH CONNELLY WITH
THE WHITMAN GROUP ON BEHALF OF
CAL WATER SERVICE IN SUPPORT.
THANK YOU. GOOD MORNING,
COMMITTEE, MARINA WEST, GENERAL
MANAGER, BIGHORN DESERT VIEW
WATER AGENCY AND TREASURER OF
THE JOINT POWERS RISK AND
INSURANCE MANAGEMENT AUTHORITY.
PRIMA. AND STRONG SUPPORT OF THE
INSURANCE OPTIONS THAT MAINTAIN
COST COMPETITIVENESS. ON BEHALF
OF OUR MEMBERS. NOW AND IN THE
FUTURE, SMALL AND LARGE, AND
ESPECIALLY FOR ALL WATER AND
WASTEWATER ENTITIES, PUBLIC AND
PRIVATE, WHICH HELPS US MAINTAIN
AFFORDABLE RATES FOR ALL THOSE
ENTITIES. THANK YOU SO MUCH.
THANK YOU, JIM CHAMP, ON BEHALF
OF THE PUBLIC WATER AGENCIES
GROUP AND SUPPORT. THANK YOU. IS
THERE OPPOSITION TO THE BILL?
SEEING NONE, ANYBODY IN
OPPOSITION? NO. FORMAL OKAY.
WE'LL BRING IT BACK TO THE
COMMITTEE FOR QUESTIONS OR
COMMENTS. MR. VALENCIA. THANK
YOU, MR. CHAIR. JUST A QUESTION
REGARDING, OUTCOMES OF THIS
POTENTIAL BILL. RIGHT,
APPRECIATIVE THAT THE INTENT IS
TO SAVE THE RATEPAYERS SOME
DOLLARS BY LOWERING INSURANCE
COSTS TO COVER THESE POTENTIAL
AGENCIES, HOW DO YOU ENSURE THAT
THE RATEPAYER IS THE ONE WHO IS
GOING TO BE RECEIVING THE
SAVINGS WHEN IT'S, INVESTOR
OWNED UTILITIES THAT HAVE
STAKEHOLDERS TO RESPOND TO? I
MEAN, LET ME CHECK. YEAH. THE
INSURANCE IS INTERESTING AT THE
PUBLIC UTILITIES COMMISSION.
IT'S TRULY VIEWED AS A PASS
THROUGH. THERE'S NOT A LOT OF
OPPORTUNITY TO GO OUT AND
NEGOTIATE LOWER INSURANCE RATES.
IT SORT OF IS WHAT IT IS IN THE
MARKETPLACE, SO WHEN WE APPLY
FOR OUR GENERAL RATE CASES, IT'S
A FORWARD LOOKING PROCESS AND WE
DETERMINE THOSE COSTS BASED ON
THE PAST YEARS INSURANCE
EXPENSES. AND THAT IS DIRECTLY
PASSED ON TO RATEPAYERS AT
WHATEVER THAT INSURANCE RATE IS.
SO THERE'S NO OPPORTUNITY TO
EARN. I'M HAPPY TO TALK TO YOU
MORE ABOUT INVESTOR OWNED
UTILITIES, BUT HOW THEY EARN
THEIR RATE OF RETURN, HOW THOSE
SHAREHOLDERS ARE REIMBURSED FOR
THEIR INVESTMENT IS ON
INFRASTRUCTURE INVESTMENT. IT
HAS NOTHING TO DO WITH THE OTHER
COSTS THAT ARE ASSOCIATED WITH
PROVIDING UTILITY SERVICE. THANK
YOU FOR CLARIFYING THAT. I JUST
WANTED TO ENSURE THAT THAT
WASN'T GOING TO BE A BYPRODUCT
OF THIS POTENTIAL RIGHT. WELL,
AND, I SAT ON A WATER BOARD,
WHICH IS DIFFERENT THAN, THAN
WHAT WE'RE TALKING ABOUT. AND WE
PARTICIPATED IN THE JPA ON THE
SCHOOL BOARD. WE HAD A JPA FOR,
AND I KNOW CITIES HAVE, JOINT
POWERS AUTHORITIES. WHAT THE
OBVIOUSLY, THE GOAL IS TO, MAKE
SURE THAT WE CAN WE CAN OBTAIN
INSURANCE AT LOWER PREMIUMS,
ESPECIALLY WITH THE INSURANCE
CRISIS RIGHT NOW. AND SO THE
GOAL IS THAT THAT THESE
COMPANIES HAVE THE ABILITY TO,
TO, YOU KNOW, JOIN A POOL, NO
PUN INTENDED ON THAT ONE. BUT
JOIN THE POOL AND SO THAT THEY
DON'T HAVE TO GO OUT TO THE OPEN
MARKETPLACE WHERE, YOU KNOW, THE
RATES ARE, YOU KNOW, INCREASING,
EXPONENTIALLY. AND THE BURDEN
WOULD BE ON THE RATEPAYERS. SO
THAT'S THE GOAL IS TO PROVIDE
ANOTHER AVENUE FOR THESE SMALL
WATER COMPANIES TO BE ABLE TO
GET INSURANCE WITHOUT HAVING TO
GO INTO THE PUBLIC MARKETPLACE.
THANK YOU. ASSEMBLY MEMBER
BARRETT KHN. YEAH, I WANT TO
THANK THE AUTHOR FOR THIS BILL.
I JUST THE OTHER DAY, I WAS
HEARING THAT CAL FIRE IS NOT
ABLE TO INSURE THEIR PROPERTIES
IN A LOT OF THE STATE. THAT'S
THE STATE OF THINGS IN
CALIFORNIA. OUR OWN PEOPLE WHO
PROTECT US FROM WILDFIRES CAN'T
GET INSURANCE. AND SO I GUESS
I'M CURIOUS HOW THIS WILL END UP
WORKING. IT'S PERMISSIVE. SO I'M
HAPPY TO SUPPORT IT TODAY. BUT I
THINK AS WE SEE MORE AND MORE
PEOPLE WHO ARE UNABLE TO GET
INSURANCE AND ARE IN THESE HIGH
RISK TRYING TO JUMP INTO THESE
THINGS MAY NOT BE SUCCESSFUL
BECAUSE THEY MAY NOT WANT THE
RISK. BUT AGAIN, THE BILL
DOESN'T REQUIRE BY ANY MEANS.
AND SO I DO THINK THE ONLY
REASON I SAY THAT IS I DO THINK
THESE JPAS ARE REALLY POWERFUL
IN HELPING TO SPREAD RISK. AND
WE SHOULD THINK MORE DEEPLY
ABOUT HOW WE HELP MAKE THAT A
HEALTHY ECONOMY RATHER THAN
EVERYBODY WHO'S HIGH RISK TRYING
TO GET IN TOGETHER, YOU KNOW,
AND I DON'T KNOW IF THERE'S A
WAY TO DO THAT, BUT SOMETHING TO
THINK MORE BROADLY ABOUT. SO
THANK YOU. YEAH THANK YOU.
ANYONE ELSE? SEEING NO ONE. I
DIDN'T HEAR A MOTION, DID I? DID
I HEAR A MOTION? YES. THEY WERE
FIGHTING. SO MR. OKAY, I
APOLOGIZE, IT WAS HER. IT WAS A
MOTION BY MISS BAUER-KAHAN. A
SECOND BY MR. GIBSON, MADAM
SECRETARY, PLEASE CALL THE ROLL
FILE ITEM NUMBER EIGHT, AB 2735.
RUBIO. MOTION IS DUE. PASS TO
LOCAL GOVERNMENT. CALDERON CHEN.
CHEN I ALVAREZ. ALVAREZ I
BAUER-KAHAN. BAUER-KAHAN I
BERMAN. BERMAN I GIBSON I
GIBSON. I JONES. SAWYER. JOHN.
SAWYER I. LOWENTHAL. LOWENTHAL
I. ORTEGA. ORTEGA I JOE.
PATTERSON. PETRIE-NORRIS. RUBIO
I RUBIO. I VALENCIA. VALENCIA I
WALLACE. ALICE. WHY? SORRY.
WOULD I, WOULD I THANK YOU
ASSEMBLY MEMBER RUBIO. ASSEMBLY
MEMBER. LOW PLEASE. YOU HAVE TWO
BILLS BEFORE THE COMMITTEE. WE
START WITH AB 2358 SECOND. THANK
YOU VERY MUCH, MR. CHAIR AND
COLLEAGUES, FOR ALLOWING ME TO
PRESENT ASSEMBLY 2358 WITH
RESPECT TO ACCOUNTABILITY AND
TRANSPARENCY AND INCREASED
ACCESSIBILITY WITHIN THE ED. AND
I RESPECTFULLY ASK FOR AYE VOTE.
AND WITH ME TODAY FOR OUR
TECHNICAL QUESTIONS TO ANSWER
ANY TECHNICAL QUESTIONS ONLY. AS
NORLAND ASKED WITH THE POLICY
AND ECONOMIC RESEARCH COUNCIL.
BROUGH. GOOD MORNING, CHAIR AND
MEMBERS. NORLAND ASBERG
REPRESENTING THE POLICY AND
ECONOMIC RESEARCH COUNCIL. THE
POLICY AND ECONOMIC RESEARCH
COUNCIL IS IN STRONG SUPPORT OF
AB 2358. THE POLICY AND ECONOMIC
RESEARCH COUNCIL IS A 500 AND
1C3 NONPROFIT POLICY RESEARCH
ORGANIZATION FOCUSED ON THE
RELATIONSHIP BETWEEN INFORMATION
SOLUTIONS AND SOCIAL AND
ECONOMIC OUTCOMES, AND IT IS
ALSO A PARTNER ORGANIZATION TO
THE US CONSUMER FINANCIAL
PROTECTION BUREAU. AB 2358 WILL
ALLOW CALIFORNIANS TO
EFFECTIVELY USE AND BENEFIT FROM
THEIR INCOME AND EMPLOYMENT
HISTORY DATA MAINTAINED BY EDD
TO GAIN ACCESS TO MORE
OPPORTUNITY, BETTER JOBS,
HOUSING AND IMPROVED CREDIT
TERMS. THE BILL WILL HELP
IMPROVE ACCESS TO LOWER COST
MAINSTREAM CREDIT FOR MILLIONS
OF CALIFORNIANS, ESPECIALLY TO
20% OF ADULT CALIFORNIANS WHO
ARE DEEMED CREDIT INVISIBLES.
THE CREDIT INVISIBLE, WITH
FEWER, LOWER COST CREDIT OPTIONS
, OFTEN RELY ON HIGH COST
LENDING, SUCH AS PAYDAY LOANS,
TO MEET THEIR CREDIT NEEDS.
BARRIERS TO CREDIT DISPROPORTION
IMPACTS LOWER INCOME MEMBERS OF
MINORITY COMMUNITIES, AND
IMMIGRANTS. ADDITIONALLY, AB
2358 WILL IMPROVE THE
FUNCTIONING OF THE CALIFORNIA
LABOR MARKET BY MAKING IT MUCH
EASIER FOR JOB APPLICANTS TO
DEMONSTRATE AND VERIFY THEIR
EMPLOYMENT HISTORY. THIS IS
PARTICULARLY NEEDED FOR THOSE
WHO HAVE WORKED. MANY JOBS HAVE
BEEN OUT OF THE LABOR FORCE FOR
A FEW YEARS OR MORE, AND OR HAVE
WORKED AT JOBS WHERE THEIR
EMPLOYER IS NO LONGER IN
OPERATION OR IS DIFFICULT TO
CUT. EXCUSE ME. CONTACT. IT WILL
ALSO SPEED UP THE TIME TO HIRE
BY REPLACING A SLOW MANUAL
PROCESS WITH DATA THAT IS NEARLY
INSTANTLY AVAILABLE. AB 2358 IS
A COMMON SENSE BILL WHEREBY THE
STATE CAN PROACTIVELY ACT TO
LOWER PRICES IN A WAY THAT COSTS
NOTHING TO THE STATE AND CAN
EVEN RETURN REVENUE TO THE STATE
SIMPLY BY USING DATA THAT IT
ALREADY MAINTAINS. WE
RESPECTFULLY ASK, AND I VOTE.
THANK YOU OTHERS IN SUPPORT.
PLEASE COME FORWARD. JUST YOUR
NAME AND ORGANIZATION YOU
REPRESENT. THANK YOU. MEMBERS
DAN SEAMAN, ON BEHALF OF END
POVERTY IN CALIFORNIA. EPIC AND
STRONG SUPPORT. IS THERE ANY
OPPOSITION TO THE BILL AS A
TWEENER? OKAY GOOD MORNING, MR.
CHAIRMAN. MEMBERS ROBERT
HERRELL, EXECUTIVE DIRECTOR OF
THE CONSUMER FEDERATION OF
CALIFORNIA. WE AGREE WITH THE
GOAL WITH THE BILL. HAVE NO
PROBLEM WITH THAT. WE JUST WANT
TO MAKE SURE MAKE TWO QUICK
POINTS. ONE, YOU WANT TO MAKE
SURE THAT THE DATA SECURITY IN
ANY INTERACTION WITH EDD IS OF
PARAMOUNT IMPORTANCE. I DON'T
NEED TO TELL THIS COMMITTEE THAT
THAT HASN'T EXACTLY BEEN THE
BEST HISTORICALLY. AND THEN THE
OTHER POINT IS, WHEN YOU HAVE AN
OPT IN, WE APPRECIATE THAT IT'S
AN OPT IN AND NOT AN OPT OUT.
YOU WANT TO MAKE SURE THAT THE
OPT IN IS CLEAR, UNDERSTANDABLE,
AND THAT PEOPLE KNOW WHAT
THEY'RE GETTING INTO. I THINK
MOST PEOPLE, IF THEY UNDERSTAND
WHAT THEY ARE GETTING INTO HERE,
WILL PROBABLY BE INTERESTED OR
MAY BE INTERESTED, BUT THOSE
WERE THE TWO POINTS. SO THANK
YOU VERY MUCH. VERY WELL. THANK
YOU. BRING YOU BACK TO THE
COMMITTEE. QUESTIONS OR COMMENTS
FROM THE COMMITTEE. SEE
LAUDERDALE. WOULD YOU LIKE WOULD
YOU LIKE TO CLOSE? I THINK
THAT'S A THIRD AND A FOURTH
THIRD. I'M SORRY. WE HAD WE HAD
A MOTION BY MR. CHEN, A SECOND
BY MR. GIBSON. MOTION IS Dð
PASS, MADAM SECRETARY, PLEASE
CALL THE ROLL FOR ITEM NUMBER
FOUR. AB 2358. LO MOTION IS DUE.
PASS TO APPROPRIATIONS.
CALDERON, CHEN, ALVAREZ
BAUER-KAHAN BAUER. KHN I
BERMAN. BERMAN I GIBSON. GIBSON
I JONES-SAWYER. LOWENTHAL OR
LOWENTHAL I. ORTEGA JO.
PATTERSON, PETRIE-NORRIS RUBIO I
RUBIO I VALENCIA. VALENCIA I
WALLACE. WALLACE I WOULD, I
WOULD I. COUNT IS EIGHT. THE
COUNT IS EIGHT ZERO. THE BILL IS
OUT OF COMMITTEE. WE'LL LEAVE
THE ROLL OPEN FOR OTHERS TO ADD
ON, MOVING ON TO AB 2892, ALSO
BY MR. LO. THANK YOU VERY MUCH,
MR. CHAIR AND COLLEAGUES, THIS
IS ASSEMBLY BILL 2892 TO HELP
ASSIST IN TRANSPORTATION
COMPANIES STABILIZE INCREASING
INSURANCE COSTS. WITH ME TODAY
ARE ADDITIONAL WITNESSES TO
TESTIFY IN SUPPORT AS BRIEFLY AS
POSSIBLE AND RESPECTFULLY ASK
FOR OUR VOTE. PLEASE GO AHEAD.
ASSEMBLY MEMBER LO, THANK YOU
FOR YOUR LEADERSHIP. MEMBERS OF
THE COMMITTEE, THANK YOU FOR THE
OPPORTUNITY TO TESTIFY. MY NAME
IS MICHAEL ROSKI, AND I'M THE
VICE PRESIDENT OF EXTERNAL
AFFAIRS FOR MV TRANSPORTATION.
MV TRANSPORTATION WAS FOUNDED IN
1975, IN SAN FRANCISCO, BY A
HUSBAND AND WIFE WHO FOUND THAT
THEIR DISABLED NEIGHBORS HAD
FREQUENT NEED OF TRANSPORTATION
SERVICES TO DOCTORS AND OTHER
VITAL APPOINTMENTS. RESPONDING
TO THE UNMET NEED, THEY DECIDED
TO START A ONE VEHICLE
PARATRANSIT SERVICE. IN THE
INTERVENING 49 YEARS, MV IS
GROWN TREMENDOUSLY AND HAS
EMERGED AS A TRUE AMERICAN
SUCCESS STORY. MV IS ONE OF THE
LARGEST MINORITY OWNED PRIVATE
COMPANIES IN THE US, AND THE
LARGEST AMERICAN OWNED PROVIDER
OF PARA AND PUBLIC TRANSIT
SERVICES IN NORTH AMERICA. WE
MANAGE 64 PUBLIC AGENCY
CONTRACTS IN 47 LOCATIONS ACROSS
CALIFORNIA, AND WE PROUDLY
EMPLOY MORE THAN 4400 PEOPLE IN
THE STATE. APPROXIMATELY 80% OF
OUR WORKFORCE IN CALIFORNIA IS
RACIALLY DIVERSE AND 85%
UNIONIZED, PRIMARILY THROUGH THE
ATU AND THE TEAMSTERS. IN
ADDITION, MV OPERATES THE
LARGEST ALL ELECTRIC BUS FLEET
IN THE NATION IN ANTELOPE
VALLEY, WITH MORE THAN 90
VEHICLES. AND WE ARE LOOKING WE
ARE WORKING WITH OUR PUBLIC
AGENCY PARTNERS TO HELP THEM
MAKE THE TRANSITION TO ZERO
EMISSIONS. IT'S IMPORTANT TO
NOTE THAT IN ITS 49 YEAR
HISTORY, MV HAS NEVER NOT PAID
AN INSURANCE CLAIM, AND I
RESPECTFULLY ASK FOR YOUR
SUPPORT FOR AB 2892. ANDREW
ANDREW, GOVERNOR LOBBYIST ON
BEHALF OF MV TRANSPORTATION
CHAIR, MEMBERS OF THE COMMITTEE,
FIRST OF ALL, I WANT TO THANK
COMMITTEE STAFF FOR THEIR
PATIENCE AND ASSISTANCE ON THIS
MEASURE. IT IS APPRECIATED,
THERE'S NO OPPOSITION RIGHT NOW
TO THE BILL. WE ALSO TOOK
CONCERNS AND SATISFIED CONCERNS
FROM THE CREDIT UNIONS AND THE
CONSUMER ATTORNEYS OF CALIFORNIA
. MV TRANSPORTATION HAS BEEN
SUCCESSFULLY OPERATING FOR 49
YEARS, AND HAD SELF-INSURANCE
FOR 47 OF THOSE YEARS DUE TO
SEVERAL WRITE DOWNS IN THEIR
BUSINESS. HOWEVER, OVER $40
MILLION THEY AREN'T ABLE TO
ACHIEVE THE NET VALUATION
REQUIREMENT OR NET WORTH
REQUIREMENT. THE DMV FOR
TRANSPORTATION COMPANIES OVER 25
CURRENTLY. RIGHT NOW, MORE THAN
1000 COMPANIES AND INDIVIDUALS
UTILIZE IT FOR UNDER 20, FOR
UNDER 25 VEHICLES. THIS BILL
WOULD SIMPLY EXTEND THAT POLICY
TO ALLOW CASH OR SURETY BOND TO
BE USED, AND FOR COMPANIES OVER
25 VEHICLES. WITH THAT, WE ASK
FOR YOUR I VOTE. THANK YOU,
THANK YOU. DO WE HAVE ANY
OPPOSITION IN THE ROOM? NO
OPPOSITION. BUT I'M GONNA TALK
ABOUT THE CONSUMER ATTORNEYS OF
CALIFORNIA. WE THANK THE AUTHOR
AND SPONSORS FOR WORKING WITH
US, VERY QUICKLY ON THIS BILL.
I'M SORRY, WITH THE MIC. WE ARE
NOT OPPOSED. WE THANK THE AUTHOR
AND SPONSOR FOR WORKING WITH US
AND THE COMMITTEE FOR THE
AMENDMENTS. THANK YOU. THANK YOU
. GOOD MORNING, MADAM CHAIR.
ROBERT LARA WITH THE CONSUMER
FEDERATION OF CALIFORNIA. NO
POSITION ON THIS WOULD JUST NOTE
APPRECIATE THE RECOMMENDED
COMMITTEE AMENDMENT ON PAGE
THREE OF THE ANALYSIS, OUR
PREFERENCE WOULD BE THAT THE
COMPANY GO WITH AN ADMITTED
INSURER. WE HAVE SEEN,
PARTICULARLY IN THE PERSONAL
SPACE, BUT ALSO EVEN IN THE
COMMERCIAL SPACE, IF YOU IF YOU
VENTURE OUT INTO THE SURPLUS
LINES MARKET OR THE NONADMITTED
INSURER, YOU DO NOT HAVE
REGULATION AND PROTECTION FROM
CDI AT ANYWHERE NEAR THE SAME
LEVEL, AND CONSUMERS HAVE BEEN
LEFT HOLDING THE BAG. SO AS THE
BILL MOVES FORWARD, I THINK
THAT'S SOMETHING THAT SHOULD BE
CONTEMPLATED AND PERHAPS THAT'S
ALREADY THE CASE FOR THE COMPANY
IN QUESTION. THANK YOU, THANK
YOU. OKAY, I'M GOING TO BRING IT
BACK TO THE COMMITTEE FOR
QUESTIONS. SOME NGUYEN
BAUER-KAHAN. DO YOU HAVE A
QUESTION? I DO, I JUST WANT
CLARIFICATION BECAUSE I THINK I
WAS I AM CONFUSED, SO IS THIS
SOMETHING THE DMV ALREADY DOES
FOR COMPANIES THAT ARE UNDER 25
VEHICLES? THEY. YES, THEY
ALREADY DO. THEY ALREADY DO IT.
SO HOW MUCH MORE? SO MY CONCERN
ABOUT THE BILL FUNDAMENTALLY IS
I DON'T THINK ANY CALIFORNIAN
THINKS THE DMV IS DOING A GREAT
JOB WITH THEIR CURRENT
RESPONSIBILITIES. AND SO I'M
ALWAYS CONCERNED ABOUT GIVING
AGENCIES ADDITIONAL
RESPONSIBILITIES, WHO WE REALLY
NEED TO GET GOOD AT WHAT THEY'RE
CURRENTLY CHARGED WITH, WHICH
I'M SURE THE AUTHOR DOES
UNDERSTANDS THAT CONCERN. SO I
GUESS I JUST AM A THAT'S WHAT IF
YOU COULD ADDRESS THAT. LIKE HOW
MUCH MORE RESPONSIBILITY IS THIS
SUCH THAT WE SHOULD BE CONCERNED
THEY'LL NEVER GET THE REAL IDS
OUT, ACTUALLY, THIS REALLY PUTS
US IN LINE WITH WHERE OTHER
STATES ARE IN THE 26 OTHER
STATES. WE DO BUSINESS. THEY
ACTUALLY MORE CLOSELY ALIGN IT
TO ABILITY TO PAY, WHICH IS WHY
A CASH OR SURETY BOND IS USED.
SO REALLY, RIGHT NOW, THE DMV
ALREADY ACCEPTS CASH AND
UTILIZES IT FOR MORE THAN 1000
INDIVIDUALS. SO REALLY FROM A
POLICY PERSPECTIVE, THERE REALLY
WOULDN'T BE MUCH MORE FOR THE
DMV TO DO THAN THEY ALREADY DO
RIGHT NOW. IT SIMPLY WOULD BE
ABLE TO ACCEPT CASH FROM
COMPANIES NOW THAT ARE OVER 25
VERSUS RIGHT NOW. WHEN IT'S
UNDER 25, IT'S HELPFUL JUST TO
SHARE THE ECHO. THE SAME KIND OF
COMMENTS AS FELLOW COLLEAGUES
ON, INSURANCES, ON THE UTILITY
OF THE DMV AND SHARE THAT
CONCERN TO AND WE'LL KEEP THAT
IN MIND SHOULD THIS BILL MOVE
FORWARD AS WELL. OKAY. THANK
YOU, MR. LÀ. DO WE HAVE ANY
OTHER QUESTIONS? OH. I'M SORRY.
YEAH, MADAM CHAIR, MEMBERS, I
HAD NO INTEREST WHATSOEVER IN
THIS BILL AND HAVE NOT READ IT
UNTIL ABOUT TWO SECONDS AGO.
BUT, I NOW HAVE A LITTLE BIT OF
INTEREST, FOLLOWING THE LAST
COMMENTS. AND THAT IS, I
REPRESENT THE CALIFORNIA
INSURANCE WHOLESALERS
ASSOCIATION AND THE SURPLUS
LINES ASSOCIATION. BOTH OF
THOSE, ASSOCIATIONS DO BUSINESS
WITH THE NON-ADMITTED OR SURPLUS
LINES MARKET. I JUST WANT TO
MAKE A COMMENT THAT THE SURPLUS
LINES MARKET ACTUALLY HAS A
BETTER SOLVENCY RATE THAN THE
ADMITTED MARKET, AND THE
HISTORICALLY THAT'S BEEN TRUE.
SO, WHEN WE LOOK AT THE ABILITY
TO GET INSURANCE, HAVING THE
OPTIONS OF USING BOTH MARKETS IS
REALLY THE BEST WAY TO GO. THANK
YOU VERY MUCH. OKAY, SO BEFORE
YOU CLOSE, I JUST WANT TO
CLARIFY. ARE YOU TAKING THE
AMENDMENTS? YES, YES, THANK YOU
VERY MUCH. ANY AMENDMENTS? OKAY.
THANK YOU. WOULD YOU LIKE TO
CLOSE? YES. WITH ACCEPTING THE
AMENDMENTS FROM THE COMMITTEE
ANALYSIS, AS REFLECTING
COMMITTEE ANALYSIS AND
RESPECTFULLY ASK FOR AYE VOTE.
THANK YOU. SECRETARY, CALL THE
ROLL, PLEASE. FILE ITEM. THANK
YOU. FILE ITEM NUMBER FIVE AB
2892. LO. MOTION IS DUE. PASS IS
AMENDED TO TRANSPORTATION.
CALDERON I CALDERON I CHEN CHEN
I ALVAREZ BAUER-KAHAN BERMAN.
BERMAN I GIBSON. GIBSON I
JONES-SAWYER LOWENTHAL.
LOWENTHAL I. ORTEGA. JO.
PATTERSON PETRIE-NORRIS. RUBIO.
RUBIO I VALENCIA. VALENCIA I
WALLACE. WALLACE I WOOD. WOOD I.
JONES YEAH. OKAY. THANK YOU.
THAT BILL GETS OUT. THANK YOU.
OKAY, ASSEMBLYMAN VALENCIA,
WOULD YOU LIKE TO PRESENT 31 AB
3104? I'LL SECOND. CHEN Þ. HELLO
THERE. BLAST FROM THE PAST? LOOK
AT THIS PASS. HEY MADAM CHAIRMAN
. OH ONE. WHENEVER YOU'RE READY,
ASSEMBLYMAN. AND WELCOME,
ASSEMBLYMAN COOLEY, IT'S NICE TO
SEE YOU HERE. HONORED TO BE HERE
. WONDERFUL, BUENOS DIAS, MADAM
CHAIR. AND MEMBERS, I'D LIKE TO
THANK THE COMMITTEE CHAIR AND
ALSO HER TEAM FOR THEIR
WONDERFUL WORK ON AB 3104. AND
ALSO ACKNOWLEDGE MY TEAM
MEMBERS, AARON RYBERG AND ALSO
SARAH BRIDGES, WHO HAVE DONE A
DILIGENT JOB ON THIS, THE
CURRENT REGULATORY STRUCTURE OF
THE TRAVEL INSURANCE MARKET IN
CALIFORNIA HAS LEFT CONSUMERS
WITH LESS COMPETITIVE MARKET,
THEREBY NEGATIVELY IMPACTING
PRICES AND LIMITING COVERAGE
OPTIONS. AB 3104 ADDS MODEL
LANGUAGE FROM THE NATIONAL
ASSOCIATION OF INSURANCE
COMMISSIONERS AND THE NATIONAL
CONFERENCE OF INSURANCE
LEGISLATORS, WHICH FOLLOWS 35
OTHER STATES. CALIFORNIA
CONSUMERS WOULD BENEFIT FROM THE
CONSUMER PROTECTIONS INDUSTRY
UNIFORMITY AND REGULATORY
CLARITY THAT ENACTING THE MODEL
ACT WOULD BRING. AB 3104 IS A
STEP IN THAT DIRECTION, SO IT
ALSO SEEKS TO INCREASE
TRANSPARENCY AND PUBLIC TRUST IN
THE PURCHASING PROCESS BY
REQUIRING SPECIFIC DISCLOSURES
BE MADE IN THE POLICIES ADDING
IN CONSUMER PROTECTIONS. AS
MENTIONED, AND CLARIFYING AND
UPDATING THE DEFINITIONS AND
COMPONENTS OF TRAVEL INSURANCE
TO BRING UNIFORMITY TO THE
MARKET AS A WHOLE. WITH ME
TODAY, I HAVE TO PROVIDE SOME
TESTIMONY. FORMER ASSEMBLY
MEMBER AND PAST PRESIDENT OF THE
NATIONAL COUNCIL OF INSURANCE
LEGISLATORS, MR. KEN COOLEY, AND
THEN ALSO FOR ANY TECHNICAL
QUESTIONS, JOHN WAGNER WITH THE
US TRAVEL ASSOCIATION. VERY
GOOD. GOOD MORNING. COLLEAGUES
IT'S INDEED AN HONOR TO BE HERE
IN SUPPORT OF THIS BILL. I'M
HERE AS AN OFFICIOUS
INTERMEDDLER. I'M NOT HERE AS A
COMPENSATED ADVOCATE, BUT I
ACTUALLY FEEL THIS IS A VERY
IMPORTANT BILL BECAUSE THE
ELEMENTS IT PUTS FORWARD FORWARD
OF A SUBJECT MATTER THAT IS NOT
COMMON, ALTHOUGH IT'S VERY
IMPORTANT TO CONSUMERS, AND ONE
THAT THE NATIONAL ASSOCIATION
FOR INSURANCE COMMISSIONERS HAS
WEIGHED IN ON. HISTORICALLY,
HERE IN THE STATE OF CALIFORNIA,
ACTUALLY FOR 150 YEARS, THE RULE
OF LAW HAS BEEN 12, 921 OF THE
INSURANCE CODE. THE COMMISSIONER
SHALL PERFORM ALL DUTIES IMPOSED
UPON THE COMMISSIONER BY THE
PROVISIONS OF THIS CODE, MEANING
INSURANCE CODE OR OTHER
PROVISIONS REGULATING THE
BUSINESS OF INSURANCE. INSURANCE
IS REGULATED EXCLUSIVELY AT THE
STATE LEVEL, AND THAT MEANS IF
YOU ARE A LAWMAKER SITTING ON
THIS PANEL, YOU SET THE TABLE
FOR INSURANCE. AND, THE ROLE OF
THE NAIC IS ACTUALLY THE 50
STATES. THE REGULATORS GET
TOGETHER TO DISCUSS COMMON
ISSUES OF INSURANCE AND COME UP
WITH RECOMMENDATIONS. BUT THEY
DO HAVE TO COME BACK OUT TO THE
STATE, SOME OF YOU MAY KNOW THIS
PROBABLY NOT, I STARTED DEALING
WITH THE SUBJECT MATTER OF
INSURANCE FOR THE LEGISLATURE 47
YEARS AGO LAST THURSDAY, I CAME
UP HERE AS A TOP AIDE OF THE
RULES CHAIRMAN, WHO WAS AN
INDEPENDENT INSURANCE AGENT.
DIÆN PAPPAN'S DAD. I EVENTUALLY,
UNDER WILLIE BROWN, WAS THE
CHIEF COUNSEL RUNNING THE
BANKING AND INSURANCE COMMITTEE
IN THE LATE 1980S FOR THIS HOUSE
AND EVENTUALLY, THE STATE SENATE
NINE YEARS AGO LAST SATURDAY,
ASKED ME TO JUMP IN AND RUN THE
SENATE INSURANCE COMMITTEE
BECAUSE AT DEADLINE TIME, THEY
LOST THEIR ANALYST, I WANT TO
ACKNOWLEDGE CLAIRE'S ANALYSIS OF
THE BILL, WHICH IS EXCELLENT.
I'VE SEEN MANY AN ANALYSIS IN MY
CAREER AND WRITTEN MANY
ANALYSIS. IT'S VERY WELL DONE,
SO THIS BILL REFLECTS INSIGHTS
OF THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS IN
RESPONSE TO A BILL THAT MY TRADE
ASSOCIATION, NATIONAL COUNCIL OF
INSURANCE LEGISLATORS, FIRST
BROUGHT FORWARD. AND I'D
SOMETHING FOR YOU AS LAWMAKERS
TO TAKE NOTE OF, REGULATORS ARE
LIKE US IF CONSTITUENTS IN THEIR
STATE ARE UNHAPPY WITH SOME
FACET OF INSURANCE, THEY CRY
FOUL. AND IF YOU JUST REFLECT
FOR A MOMENT ON TRAVEL, SO MUCH
OF TRAVEL TODAY IS DONE BY
PEOPLE WHO ARE RETIRED. THEY
SPEND A LOT OF MONEY ON TRAVEL.
IF THEY'RE BUYING TRAVEL
INSURANCE PRODUCTS, IF THEY
DON'T PERFORM THE WAY THEY
EXPECT THEM TO PERFORM, THEY'RE
GOING TO SCREAM. AND SO IT IS
EXTREMELY IMPORTANT FOR YOU TO
KNOW THAT THIS BILL IS PATTERNED
ON SOMETHING THAT CAME OUT OF
THE SCRUTINY OF THE NAIC, THE SI
COMMITTEE DEALING WITH PROPERTY
AND CASUALTY, WHICH OVER THE
YEARS I'VE ATTENDED MANY TIMES,
AND IT'S DESIGNED TO KIND OF
PRESENT A COMMON APPROACH TO
TRAVEL ACROSS THE NATION. I WANT
TO SAY TO YOU THAT THE BILL HAS
SOME LANGUAGE DEALING WITH TAX,
BUT WE INSURANCE COMPANIES ARE
BASICALLY EXEMPT FROM TAXATION.
THEY PAY A GROSS PREMIUM TAX.
IT'S PAID UPON PEOPLE THAT HAVE
A CONNECTION TO THE STATE. ALL
THIS BILL DOES, IT DOESN'T TOUCH
THE REVEREND TAX CODE THAT DEALS
WITH THESE MATTERS. AND THE TAX
IS ACTUALLY IN THE CONSTITUTION.
ALL IT DOES IS IT MAKES CLEAR
WHO THE INCIDENCE OF THE TAX.
THEY'RE ALREADY GOING TO PAY THE
TAX. IT JUST EXPLAIN THE
INCIDENCE OF THE TAX. THAT'S
THAT'S ACTUALLY A CLARITY IS
ALWAYS GOOD. AND IN ANY EVENT, I
JUST THINK THIS BILL IS ACTUALLY
TERRIFIC. IT PROVIDED ADDITIONAL
DISCLOSURE DÍAS. IT PROVIDES AN
OPPORTUNITY FOR PEOPLE TO REVIEW
IT FOR UP TO 15 DAYS AND DECIDE
THEY DON'T WANT IT, GET A FULL
REFUND. AND IT PROVIDES CLARITY
FOR WHAT ARE THE PROVISIONS YOU
GET. IT COVERS REPATRIATION OF
REMAINS, WHICH IS NOT A NOT
SOMETHING ANYONE REALLY WANTS TO
THINK ABOUT. BUT ACTUALLY, IF
YOU'RE A FAMILY IN THAT
SITUATION, THAT'S VITALLY
IMPORTANT TO KNOW IN ADVANCE,
AND, ANYWAY, I JUST AM HERE
BECAUSE I THINK THE BILL IS
IMPORTANT AND IMPROVING THE
EXPERIENCE OF CONSUMERS IN
CALIFORNIA TRAVEL IS VERY
IMPORTANT IN OUR STATE. SO
THAT'S ANOTHER REASON TO TAKE
NOTE OF IT. BUT REALLY, AS I
SAY, THIS STARTS EDUCATING THIS
COMMITTEE MEMBERS ON THE
RELATIONSHIP OF US. THE NAIC,
OUR ROLE IN SETTING THE TABLE
FOR INSURANCE IN THE STATE, AND
IN THAT SENSE, I JUST FEEL IT'S
AN OUTSTANDING BILL. SO HONORED
TO BE HERE, WITH MY COLLEAGUE,
MR. VALENCIA. THANK YOU. DO WE
HAVE ANY ADDITIONAL SUPPORT IN
THE ROOM? MADAM CHAIR, MEMBERS,
JOHN WINGER WITH SLOGANS JENSEN
AND ASSOCIATES. ONE OF OUR
CLIENTS IS A MEMBER OF THE US
TRAVEL INSURANCE ASSOCIATION,
WHICH IS THE SPONSOR OF THE
BILL. THEY WANTED ME TO CONVEY
THEIR STRONG SUPPORT FOR THE
BILL. THANK YOU. THANK YOU.
MARK, WITH THE AMERICAN PROPERTY
CASUALTY INSURANCE ASSOCIATION
IN SUPPORT OF THE BILL. THANK
YOU. DO WE HAVE ANY OPPOSITION
IN THE ROOM, JUST COMMENT. NO,
NO POSITION ON THE BILL. ROBERT
HERRERA WITH THE CONSUMER
FEDERATION OF CALIFORNIA, AS
SOMEONE WHO'S ATTENDED MORE NAIC
MEETINGS THAN I CARE TO RECALL
AND EVEN A FEW IN COILS, THOUGH
I'M SURE NOT NEARLY AS MANY AS,
PROFESSOR COOLEY HAS, I WOULD
JUST NOTE THAT THERE'S A FEW
PROVISIONS SPECIFICALLY IN THE
BILL THAT WE THINK COULD BE
STRENGTHENED UP A BIT. FOR
EXAMPLE, I THINK THE 15 DAY FREE
LOOK, WE HAD A BILL, MADAM
CHAIR, YOU HAD A BILL EARLIER IN
THIS COMMITTEE. THE STANDARD
USUALLY IS 30 DAY FREE. LOOK I
THINK THERE'S A WAY TO WRITE
THAT, TO EXPAND THE 15 DAY TO 30
DAY. UNLESS THE TRIP IS IMMINENT
, WE WOULD LIKE THAT TO BE
EXPLORED, WE WOULD JUST NOTE
THAT, WHILE THERE ALWAYS ARE
EXCEPTIONS, HISTORICALLY, THE
NEIC MODELS AND TO A CERTAIN
EXTENT THE NCOIL MODELS HAVE NOT
QUITE BEEN AS CONSUMER
PROTECTIVE AS WHAT STATES LIKE
CALIFORNIA HAVE WANTED TO DO TO
PROTECT CONSUMERS IN THE IN THE
INSURANCE MARKETPLACE, TO THAT
END, WE WOULD WANT TO MAKE SURE
THAT WE LIKE THAT. THE FACT THAT
IT'S AN OPT IN, NOT AN OPT OUT,
SOMETHING I MENTIONED ON ANOTHER
BILL EARLIER TODAY. MADAM CHAIR,
WE WOULD WANT THAT TO BE
PROMINENT AND CLEAR. SO AGAIN,
IF PEOPLE UNDERSTAND THEN THEY
THEY GET IT. IN A PRACTICAL
MATTER, MEMBERS OF THE COMMITTEE
, THE WAY THAT PEOPLE TEND TO
BUY TRAVEL INSURANCE IS
LITERALLY WHEN YOU COMPLETE THE
TRANSACTION, IT'S RIGHT THERE.
YOU SCROLL DOWN, THERE'S AN
EXCLUSIVITY THERE THAT IS
ANTITHETICAL TO A FREE AND OPEN
MARKETPLACE. I THINK THAT IS THE
BIGGER CHALLENGE AND PROBLEM
HERE THAT FACES CONSUMERS. THEY
DON'T KNOW THAT THEY HAVE OTHER
OPTIONS. THEY JUST SEE THE
OPTION RIGHT THERE, WHICH HAS A
DEAL WITH THE AIRLINE OR
WHOEVER. YOU JUST BOOK SOMETHING
WITH. I THINK THAT'S THE BIGGER
CHALLENGE HERE, LONGER TERMS.
THANK YOU. THANK YOU. HELLO,
CHAIR AND COMMITTEE MEMBERS,
CLAUDIA MILDNER, ASSISTANT CHIEF
DEPUTY LEGISLATIVE DIRECTOR AT
CALIFORNIA DEPARTMENT OF
INSURANCE. WE ARE NOT FORMALLY
OPPOSED TO THIS BILL. HOWEVER WE
HAVE BEEN TALKING TO THE
SPONSOR, EXTENSIVELY ON THIS.
WE'VE SHARED OUR CONCERNS. THEY
ARE WORKING WITH US, AND WE LOOK
FORWARD TO CONTINUE WORKING
TOGETHER. THANK YOU. THANK YOU.
OKAY, NOW I'M GOING TO BRING IT
BACK TO THE COMMITTEE TO SEE IF
WE HAVE ANY QUESTIONS FOR THE
AUTHOR, MR. ALVAREZ, MAYBE JUST
AN OPPORTUNITY TO RESPOND ON THE
CONCERNS ON THE 15 DAYS. 30
DAYS? JUST YOUR TAKE ON THAT AND
THEN, YEAH, AS A AS A CONSUMER,
I THINK WE'VE ALL SEEN THAT
ABILITY TO CHECK THAT WHEN
YOU'RE DOING YOUR FLIGHT AND,
YOUR THOUGHTS ON THAT. JUST
CURIOUS. NO, ABSOLUTELY, HAPPY
AND OPEN TO CONTINUING THE
DISCUSSION ON THOSE TOPICS. I
PRIDE MYSELF IN ENSURING THAT
THE CALIFORNIA PUBLIC, HAS
TRANSPARENT AND EQUITABLE
INFORMATION. SO HAPPY TO ADDRESS
THAT AND FIGURE OUT WHAT'S THE
BEST APPROACH TO THIS BILL. YEAH
OKAY. SEEING NO OTHER QUESTIONS,
WOULD YOU LIKE TO CLOSE,
ASSEMBLYMAN? THANK YOU, MADAM
CHAIR. IN A TIME WHEN WE ARE
DEALING WITH AN INSURANCE CRISIS
, I THINK IT'S, PERTINENT THAT
WE FIGURE OUT WITHIN THE
INSURANCE SECTOR A WAY TO BE
EFFICIENT AND IN A WAY TO HAVE
PARITY THROUGHOUT THE MARKET.
AND I THINK THIS IS ONE STEP IN
THAT DIRECTION WHEN IT COMES TO
TRAVEL INSURANCE. SO WITH THAT,
I RESPECTFULLY ASK FOR AN AYE
VOTE. THANK YOU, THANK YOU.
WE'VE ALREADY HAD A MOTION AND A
SECOND. SO SECRETARY, PLEASE
CALL THE ROLL FILE ITEM NUMBER
NINE AB 3104 VALENCIA. MOTION IS
Dð. PASS TO APPROPRIATIONS.
CALDERON. AYE. CALDERON. AYE
CHEN. CHIEN AYE. ALVAREZ.
ALVAREZ. AYE BAUER. KHN.
BERMAN. AYE. BERMAN. AYE. GIBSON
GIBSON. AYE. JONES-SAWYER. CHEN.
SAU. SAWYER AYE. LOWENTHAL.
LOWENTHAL. AYE. ORTEGA ORTEGA.
AYE. JO. PATTERSON. JO.
PATTERSON. AYE PETRIE-NORRIS.
RUBIO. RUBIO. AYE. VALENCIA YES.
VALENCIA. AYE. WALLACE. WALLACE.
AYE. WOOD WOOD. AYE. OKAY.
CONGRATULATIONS THAT GETS OUT.
AND IT WAS VERY NICE TO SEE YOU,
MR. COOLEY. OKAY. AT THIS TIME
WE'RE GOING TO ALLOW MEMBERS TO
ADD ON. THE CONSENT CALENDAR
ITEM NUMBER SEVEN IS AB 2983.
CHEN CHIEN AYE. ALVAREZ. ALVAREZ
AYE. BERMAN. BERMAN. AYE.
GIBSON. GIBSON. AYE JONES.
SAWYER. JONES. SAWYER. AYE. JO.
PATTERSON JO. PATTERSON. AYE
FILE ITEM NUMBER ONE. AB 1883.
CALDERON. IS CHEN. CHEN. AYE.
ALVAREZ. ALVAREZ. AYE BERMAN.
AYE. BERMAN. AYE. GIBSON. GIBSON
AYE. JONES. SAWYER. JONES.
SAWYER. AYE. JO. PATTERSON JO.
PATTERSON. AYE. FILE ITEM NUMBER
TWO IS AB 2167. CHEN CHEN. AYE.
ALVAREZ. ALVAREZ. AYE. BERMAN
AYE. BERMAN. AYE. GIBSON.
GIBSON. AYE. JONES. SAWYER
JONES. SAWYER. AYE. JO.
PATTERSON. JO. PATTERSON. NOT
VOTING. FILE ITEM NUMBER THREE.
AB 2614. CHEN CHEN. NOT VOTING.
JO PATTERSON 2416. NO JO
PATTERSON. NO. PETRIE-NORRIS.
FILE ITEM NUMBER FOUR, AB 2358.
CALDERON. BILL. AYE. CALDERON.
AYE. CHEN CHEN. AYE. ALVAREZ.
ALVAREZ. AYE. JONES SAWYER.
JONES. SAWYER. AYE. ORTEGA.
ORTEGA AYE. JO. PATTERSON. JO.
PATTERSON. AYE. PETRIE-NORRIS
FILE ITEM NUMBER FIVE IS AB
2892. ALVAREZ ALVAREZ. AYE.
BAUER. KHN JONES. SAWYER JONES.
SAWYER. AYE. ORTEGA. ORTEGA AYE.
JO. PATTERSON. JO. PATTERSON.
AYE. PETRIE-NORRIS FILE ITEM
NUMBER SIX AB 2743. CHEN CHEN.
AYE. ALVAREZ. ALVAREZ. AYE
BERMAN. BERMAN. AYE. GIBSON.
GIBSON. AYE JONES. SAWYER.
JONES. SAWYER. AYE. JO.
PATTERSON JO. PATTERSON. AYE
FILE ITEM NUMBER EIGHT. AB 2735.
CALDERON AYE. CALDERON. AYE. JO.
PATTERSON FILE ITEM NUMBER
EIGHT, AB 2735. JO. PATTERSON.
AYE PETRIE-NORRIS. I KNOW, YEAH,
YEAH
.
YEAH FILE. AYE FILE. ITEM NUMBER
THREE AB 2416 PETRIE-NORRIS.
PETRIE-NORRIS AYE. FILE ITEM
NUMBER FOUR, AB 2358
PETRIE-NORRIS PETRIE-NORRIS.
AYE. A FILE NUMBER NUMBER FIVE
AB 2892 PETRIE-NORRIS
PETRIE-NORRIS. AYE FILE ITEM
NUMBER EIGHT IS 2780 OR 2735
PETRINO. REYES PETRIE-NORRIS.
AYE AB FILE NUMBER NINE AB 3104
PETRIE-NORRIS PETRIE-NORRIS. AYE
. ALL RIGHT. THANKS, EVERYBODY.
SHAKE YOUR HAND. I DON'T KNOW.
HI. HOW ARE YOU? AYE GOOD. YEAH.
ALL RIGHT. ALL RIGHT. I'M DOING
WELL
.
EXPERTISE AND INSTITUTIONAL
MEMORY. YEAH WELCOME. GOOD TO
SEE YOU. ALL RIGHT. SEE YOU.
FILE ITEM NUMBER FIVE, AB 2092.
BAUER KHN. OKAY TO LO. AYE.
BAUER. CAN I FILE ITEM NUMBER
930 104? BAUER. KHN. BAUER. CAN
I SORRY. THANKS FOR COMING BACK,
ASSEMBLY COMMITTEE IS ADJOURNED