View this article online: https://www.insurancejournal.com/news/west/2019/04/25/524830.htm
A bill to enable the California Earthquake Authority to expand mitigation programs cleared its first hurdle this week when it passed the Senate Insurance Committee.
The Resilient Homes Initiative, Senate Bill 254, was authored and introduced in earlier this month by Senate Majority Leader Bob Hertzberg, D-Van Nuys.
SB 254 would enhance the CEA’s existing claim-paying capacity by adding a new, lower cost alternative to reinsurance and other existing tools. CEA will in turn make annual payments in exchange for this new capacity, with the funds (estimated to be between $70-$100 million) being devoted to pre-earthquake retrofit and mitigation programs in “High Seismic Risk Zones.”
Hertzberg was joined in testimony by California Insurance Commissioner Ricardo Lara and Glenn Pomeroy, CEO of the CEA, in favor of the bill.
“The Senators who voted for the Resilient Homes Initiative today voted to help tens of thousands of Californians be better prepared to survive the next big earthquake,” Pomeroy said in a statement. “Taking aggressive steps now to strengthen these homes will help save homes and lives when that inevitable day arrives.”
Because of the restructured funding, the bill would also empower the CEA to collect small assessments on insurance premiums on policies covering property and risks in the “High Seismic Risk Zones” – only in the event that we encounter an earthquake of unprecedented magnitude and damage, and after all other reserves are exhausted.
The bill will next be heard in the Senate Appropriations Committee.
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