Commissioner Lara supports legislation protecting Californians with financially strong FAIR Plan

News: 2025 Press Release

SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara announced his continued strong support for the FAIR Plan Stabilization Act (Assembly Bill 226), a consumer protection measure that would put the insurer-run FAIR Plan on stronger financial footing in the event of a future wildfire disaster. This urgency bill, jointly authored by Assemblymembers Lisa Calderon and David Alvarez, passed the Assembly Floor with 77 AYE votes on Tuesday.

Commissioner Lara is the bill’s chief sponsor, providing ongoing support to help secure its passage and signature by Governor Gavin Newsom when it reaches his desk. AB 226 is now in the Senate pending consideration.

“Protecting California policyholders requires a stronger FAIR Plan that can withstand major wildfire disasters. AB 226 builds on the many actions I have taken to fix the FAIR Plan through increased oversight and financial planning,” said Commissioner Lara. “I am sponsoring this important bill to build on our record and provide the financial buffer of allowing the FAIR Plan to seek a line of credit in case it is needed – with solid financial footing reducing the impact of another major disaster on all Californians.”

A stable and solvent FAIR Plan — established more than 50 years ago as the state’s insurer of last resort — provides important certainty for insurance consumers who otherwise cannot find insurance coverage in the traditional or surplus lines markets. Modernizing the FAIR Plan is critical to ensure a reliable, yet temporary, safety net that is there when consumers need it.

Other major actions taken by Commissioner Lara include:

• Higher coverage limits: $3 million for residential policyholders and a new high value commercial coverage option up to $100 million per location finalized last week.
• Safer from Wildfires discounts: Residential and commercial policyholders can obtain a discount of up to 20 percent on the wildfire portion of their FAIR Plan premium for hardening their properties.
• Shrinking FAIR Plan: Commissioner Lara finalized his Sustainable Insurance Strategy with a core goal of increasing availability of regular policies in higher risk areas where the FAIR Plan has become the only option, not the last resort as originally intended.
• Improved payment options: Allowing monthly payments without a fee and credit card payments with a fee that covers processing cost only.
• Agricultural coverage: Farm buildings are now included under a new law that Commissioner Lara strongly supported and successfully implemented.
• Greater transparency: Requiring increased public reporting on FAIR Plan activity and customer service metrics.
• Public oversight: Commissioner Lara is strongly supporting legislation -- AB 234 authored by Assemblymember Lisa Calderon -- that would add two public members to the FAIR Plan governing committee appointed by the Senate and Assembly.

The Department is finalizing a financial examination of the FAIR Plan, expected in the coming months, including its compliance with recommendations for significant changes in governance, operations, underwriting and claims handling, risk management, customer service, and financial planning strategies and policies.

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