SB 523: Fire insurance.
This bill aims to regulate fire insurance policies by allowing insurers to differentiate between internal and external fires for coverage purposes. The bill defines specific terms to clarify this provision. It aims to provide a clearer understanding of fire insurance policies and their risks, enabling insurers to better assess coverage needs.
| Feb. 02, 2026 | Returned to Secretary of Senate pursuant to Joint Rule 56. |
| Jan. 05, 2026 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS. |
| Apr. 02, 2025 | Re-referred to Com. on INS. |
| Mar. 24, 2025 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar. 05, 2025 | Referred to Com. on RLS. |
| Amended IN Senate January 05, 2026 |
| Amended IN Senate March 24, 2025 |
| Introduced by Senator Seyarto |
February 20, 2025 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law establishes the California Earthquake Authority (CEA), administered under the authority of the Insurance Commissioner and governed by a 3-member governing board, to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. Under existing law, the CEA’s governing board is advised by an appointed advisory panel.
This bill would require the CEA to establish a commission, to convene no later than April 1, 2026, to consider expanding the authority. The bill would require the commission to be composed of the board members or their designees. The bill would also require the commission to explore specified topics, including financial estimates for statewide earthquake threats. The bill would require the commission to conclude its work no later than April 1, 2027, and to submit a report to the Legislature no later than June 1, 2027, on the feasibility of creating a disaster insurance program in California. The bill would repeal these provisions on June 1, 2031.
The people of the State of California do enact as follows:
SECTION 1.
Section 2059 is added to the Insurance Code, to read:2059.
(a) Under a homeowners’ insurance policy, an insurer may differentiate the risk of an internal fire from the risk of an external fire for the purposes of determining coverage.(a)The authority shall establish a commission, to convene no later than April 1, 2026, to consider expanding the authority.
(b)The commission shall be composed of board members or their designees.
(c)The commission shall explore both of the following:
(1)Financial estimates for statewide earthquake threats.
(2)Potential financial support from federal authorities in a worst-case scenario.
(d)The commission shall conclude its work no later than April 1, 2027, and shall provide a report to the Legislature no later than June 1, 2027, on the feasibility of creating a disaster insurance program in California.
(e)The commission shall be supported by authority staff. The department may provide additional staff if necessary.
(f)(1) A report to be submitted pursuant to this section shall be submitted in compliance with Section 9795 of the Government Code.
(2)Pursuant to Section 10231.5 of the Government Code, this section is repealed on June 1, 2031.