RELATING TO INSURANCE OF LAST RESORT.

2025 Regular Session Introduced by Stanley Chang and 3 co-sponsors

SB 1140 creates a state-backed insurer of last resort, ensuring homeowners in high-risk areas can access affordable property insurance despite traditional coverage challenges.

Reported from CPN (Stand. Com. Rep. No. 174) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM/JDC.

#dcca #high-riskareas #insureroflastresort #residentialpropertyinsurance

Introduction

Bill SB 1140 was introduced on January 17, 2025, with the intent to address issues related to residential property insurance in high-risk areas. The bill aims to establish an insurer of last resort to provide coverage for properties that may otherwise be uninsurable due to their location or risk factors.

Purpose and Intent

The primary purpose of SB 1140 is to ensure that residents in high-risk areas have access to affordable and reliable residential property insurance. This is particularly important for homeowners who may face challenges in obtaining coverage from traditional insurers due to factors such as natural disasters or other risks associated with their geographical location.

Key Provisions

Establishment of an Insurer of Last Resort: The bill proposes the creation of a state-backed insurance entity that will serve as a last resort for homeowners unable to secure insurance through private companies.

Coverage Parameters: The insurer will provide coverage for residential properties in designated high-risk areas, ensuring that these homeowners are not left without protection.

Regulatory Oversight: The Department of Commerce and Consumer Affairs (DCCA) will oversee the implementation and operation of the insurer, ensuring compliance with state regulations and standards.

Amendments: The bill has been amended (SD 1) during its passage through the committee, although specific details of these amendments are not provided in the summary.

Affected Parties

Homeowners in High-Risk Areas: The primary beneficiaries of this bill will be homeowners residing in areas deemed high-risk for natural disasters or other insurable events.

Insurance Industry: The bill may impact private insurers by potentially reducing their risk exposure in high-risk areas, as the state-backed insurer will take on some of the coverage responsibilities.

Legislative Timeline

January 17, 2025: Bill SB 1140 was introduced.

January 21, 2025: The bill passed its First Reading.

January 23, 2025: The bill was referred to the Committees on Commerce and Consumer Protection (CPN) and Ways and Means/ Judiciary (WAM/JDC).

January 24, 2025: A public hearing was scheduled for January 31, 2025.

January 31, 2025: The CPN committee recommended that the measure be passed with amendments.

February 10, 2025: The bill was reported from CPN with a recommendation for passage on Second Reading, as amended (SD 1), and was referred to WAM/JDC.

Conclusion

SB 1140 represents a significant step towards providing essential insurance coverage for homeowners in high-risk areas. By establishing an insurer of last resort, the bill aims to enhance the stability and security of residential property insurance, ultimately benefiting vulnerable communities facing unique challenges in securing adequate coverage. The ongoing legislative process will determine the final form and implementation of this important measure.

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