AMENDED IN ASSEMBLY APRIL 22, 2024
AMENDED IN ASSEMBLY APRIL 10, 2024
AMENDED IN ASSEMBLY MARCH 21, 2024
california legislature—2023–24 regular session
ASSEMBLY BILL No. 2416
Introduced by Assembly Member Connolly
February 13, 2024
An act to add Article 5 (commencing with Section 2095) to Chapter 2 of Part 1 of Division 2 of the Insurance Code, relating to insurance. legislative counsel’s digest
AB 2416, as amended, Connolly. Residential property insurance:
wildfire risk.
Existing la w generally re gulates classes of insurance, including property and fire insurance. Existing la w creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the department’s powers and duties. Existing department regulations prohibit an insurer from using a rating plan that does not take into account and reflect specified wildfire risk mitig ation, including property-le vel building hardening measures.
This bill would require the department, on or before January 1, 2026, December 31, 2027, and every 3 years thereafter, to evaluate whether or not to update its regulations to include additional building hardening measures for property-le vel mitig ation ef forts and communitywide wildfire mitigation programs. F or its first e valuation, the bill w ould require the department to consult with specified agencies to identify additional building hardening measures to consider, as well as to develop and implement a public participation process during the evaluation.
96 Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. Article 5 (commencing with Section 2095) is line 2 added to Chapter 2 of Part 1 of Division 2 of the Insurance Code, line 3 to read:
line 4
line 5 Article 5. Reduced Wildfire Risk
line 6
line 7 2095. The Legislature finds and declares all of the following:
line 8 (a) More than 2,000,000 California households, or approximately line 9 one in four residential structures in California, are located within line 10 or near “high” or “v ery high” fire hazard se verity zones. These line 11 households are particularly vulnerable to increasingly catastrophic line 12 wildfires that pose urgent threats to lives, property, and resources line 13 in California.
line 14 (b) The state has in vested nearly three billion dollars line 15 ($3,000,000,000) since the Budget Act of 2019 into programs and line 16 projects to improve forest health and resilience, create fuel breaks, line 17 harden homes and communities, and b uild resilient lifeline line 18 infrastructure to withstand wildfire disasters when they do occur. line 19 (c) Chapter 391 of the Statutes of 2019, which created the line 20 California Wildfire Mitigation Program jointly administered by line 21 the Office of Emergency Services and the Department of Forestry line 22 and Fire Protection, recognized that “California must de velop line 23 statewide options to encourage cost-effective structure hardening line 24 to create fire-resistant homes, b usinesses, and public b uildings line 25 within wildfire hazard areas and with a focus on vulnerable line 26 communities.”
line 27 (d) State support for home hardening incenti ve programs is line 28 especially critical no w. California residents are finding line 29 homeowners’ insurance in v ery high risk fire areas to be line 30 increasingly difficult and costly to obtain, if co verage is e ven line 31 available. The Department of Insurance determined that the line 32 majority of nonrene wals, refusals to insure, and increased line 33 premiums resulted from insurers’ use of wildfire risk models that line 34 do not account for wildfire risk reduction or home hardening line 35 measures completed by the homeowner or community. 96 — 2 — AB 2416
line 1 (e) On September 21, 2023, Governor Newsom issued Executive line 2 Order No. N-13-23 asking the Insurance Commissioner to tak e line 3 “prompt regulatory action to strengthen and stabilize California’s line 4 marketplace for homeowners insurance and commercial property line 5 insurance,” including maintaining “the long-term a vailability of line 6 homeowners and commercial property insurance coverage.” line 7 (f) Regular re view of and updates to the Department of line 8 Insurance’s Safer from Wildfires regulations will adv ance these line 9 goals. The Safer from Wildfires re gulations incenti vize line 10 homeowners to invest in specified wildfire risk reduction and home line 11 hardening measures by requiring admitted insurers to reflect and line 12 take into account these measures in their ratings plans. The line 13 voluntary home hardening measures included in the Safer from line 14 Wildfires regulations provide a higher level of fire protection than line 15 what is otherwise required by state law and help contain the spread line 16 of wildfires, reduce property damage, sa ve lives, and encourage line 17 insurance companies to remain committed to the California line 18 insurance market.
line 19 (g) It is the intent of the Le gislature to further incenti vize line 20 homeowners to invest in demonstrably effective home hardening line 21 measures by requiring the Department of Insurance to periodically line 22 review its Safer from Wildfires regulations and evaluate whether line 23 or not to amend the re gulations to include additional line 24 communitywide mitig ation programs and b uilding hardening line 25 measures, including use of specified noncombustible construction line 26 materials that are included by the Office of the State Fire Marshal line 27 on the Building Materials Listing. Noncomb ustible construction line 28 materials, as defined by the California Building Standards Code line 29 (Title 24 of the California Code of Re gulations), pro vide the line 30 highest le vel of fire safety among materials included on the line 31 Building Materials Listing because these materials do not ignite, line 32 even when exposed to high temperatures for extended periods of line 33 time. Use of noncombustible construction materials is an effective line 34 means of reducing fire-related property damage and the line 35 contribution of structures to the spread of wildfires. line 36 (h) The Building Materials Listing includes construction line 37 materials that ha ve been tested and analyzed by a laboratory line 38 accredited by the Office of the State Fire Marshal to confirm the line 39 materials meet established performance and reliability features. line 40 For example:
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line 1 (1) Insulation products identified on the Building Materials line 2 Listing in SFM Listing Cate gory 2440 ha ve been tested in line 3 accordance with either ASTM International Standard (ASTM) E84 line 4 or Underwriters Laboratories, Inc. Standard 723 UL (Standard line 5 Test Methods for Surf ace Burning Characteristics of Building line 6 Materials) for flame spread and smok e development, and have a line 7 flame spread rating of 0–25 and a smoke developed index of 0–450, line 8 also defined as a Class A rating. In addition, select products line 9 identified in Category 2440 have been tested for noncombustibility line 10 in accordance with ASTM E136 (Standard Test Method for line 11 Assessing Comb ustibility of Materials Using a Vertical Tube line 12 Furnace at 750 degrees Celsius) and have achieved a passing result. line 13 (2) Exterior w all siding and sheathing for Wildland Urban line 14 Interface fire areas identified on the Building Materials Listing in line 15 SFM Listing Cate gory 8140 comply with Chapter 7A of the line 16 California Building Standards Code and ha ve been tested in line 17 accordance with State Fire Marshal Standard 12-7A-1, achieving line 18 a passing result. Standard 12-7A-1 e valuates the ability of an line 19 exterior wall assembly to resist fire penetration from an e xterior line 20 fire exposure and consists of a 150-kilowatt intensity direct flame line 21 exposed to the e xterior surface of the assembly for a 10-minute line 22 duration.
line 23 (3) Non-wood roof co vering/assemblies for wildland urban line 24 interface fire areas identified on the Building Materials Listing in line 25 SFM Listing Cate gory 8180 comply with Chapter 7A of the line 26 California Building Standards Code and ha ve been tested in line 27 accordance with ASTM E108. ASTM E108 is a fire-test-response line 28 standard used to measure the relati ve fire characteristics of roof line 29 coverings, as part of a complete roof assembly , when exposed to line 30 external fire sources. It e valuates the spread of flame across the line 31 roof co vering when e xposed to direct flame impingement and line 32 classifies the co vering by class, with Class A being the highest line 33 achievable class.
line 34 2096. For purposes of this article:
line 35 (a) “Building Materials Listing” means the list of construction line 36 materials and equipment biennially prepared by the Office of the line 37 State Fire Marshal pursuant to Section 13144.1 of the Health and line 38 Safety Code as part of the Office of the State Fire Marshal’ s line 39 Building Materials Listing Program.
96 — 4 — AB 2416
line 1 (b) “Noncombustible” has the same meaning as set forth in line 2 Section 202 of Title 24 of the California Code of Regulations. line 3 (c) “Safer from Wildfires regulations” means the re gulations line 4 set forth in Section 2644.9 of Title 10 of California Code of line 5 Regulations.
line 6 2097. (a) (1) On or before January 1, 2026, December 31, line 7 2027, and every three years thereafter, the department shall evaluate line 8 whether to update the Safer from Wildfires regulations to include line 9 additional b uilding hardening measures for property-le vel line 10 mitigation ef forts and communitywide wildfire mitig ation line 11 programs.
line 12 (2) (A) The department shall, as part of its first e valuation, line 13 evaluate whether to update the Safer from Wildfires regulations line 14 to include in the re gulations the installation of noncomb ustible line 15 construction materials included by the Office of the State Fire line 16 Marshal on the Building Materials Listing in any of the following line 17 categories: Listing.
line 18 (i) Insulation (SFM Listing Category 2440).
line 19 (ii) Exterior Wall Siding and Sheathing for Wildland Urban line 20 Interface (SFM Listing Category 8140).
line 21 (iii) Non-Wood Roof Covering/Assemblies for Wildland Urban line 22 Interface (SFM Listing Category 8180).
line 23 (B) In its first evaluation, the department may, in its discretion, line 24 evaluate whether to include the installation of additional line 25 construction materials included by the Office of the State Fire line 26 Marshal on the Building Materials Listing that meet the line 27 requirements of paragraph (1) of subdivision (b). line 28 (b) As part of its e valuation pursuant to subdi vision (a), the line 29 department shall do both of the following:
line 30 (1) Consult with the Office of Emer gency Services, the line 31 Department of F orestry and Fire Protection, the Public Utilities line 32 Commission, and the Office of Planning and Research to identify line 33 additional b uilding hardening measures for property-le vel line 34 mitigation efforts and communitywide wildfire mitigation programs line 35 to consider as part of its evaluation.
line 36 (2) Consult with relevant stakeholders to consider as part of its line 37 evaluation an y potential re visions to the Safer from Wildfires line 38 Regulations, including all of the following: Regulations. line 39 (A) The property insurance industry.
line 40 (B) Fire service professionals.
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line 1 (C) Fire-resistant building material manufacturers. line 2 (D) Organizations representing California property insurance line 3 policy holders.
line 4 (3) Develop and implement a process that allows for meaningful line 5 public participation that includes, at a minimum, all of the line 6 following:
line 7 (A) Holding at least one public meeting to allo w interested line 8 persons to submit suggestions for additional b uilding hardening line 9 measures for property-level mitigation efforts and communitywide line 10 wildfire mitigation programs for the department to consider as part line 11 of its evaluation.
line 12 (B) Making available for public review and comment, including line 13 during at least one public meeting, a preliminary list of b uilding line 14 hardening measures for property-le vel mitig ation ef forts and line 15 communitywide wildfire mitig ation programs being considered line 16 by the department for inclusion in the Safer from Wildfires line 17 regulations.
line 18 (C) Making a vailable to the public a final list of b uilding line 19 hardening measures for property-le vel mitig ation ef forts and line 20 communitywide wildfire mitig ation programs the department line 21 proposes to include in the list of b uilding hardening measures line 22 identified in the Safer from Wildfires regulations before amending line 23 the re gulations pursuant to the rulemaking pro visions of the line 24 Administrative Procedure Act (Chapter 3.5 (commencing with line 25 Section 11340) of Part 1 of Division 3 of Title 2 of the Government line 26 Code).
line 27 (c) If the department mak es public a final list of b uilding line 28 hardening measures for property-le vel mitig ation ef forts and line 29 communitywide wildfire mitig ation programs to be included in line 30 the list of building hardening measures identified in the Safer from line 31 Wildfires regulations pursuant to subparagraph (C) of paragraph line 32 (3) of subdi vision (b), the department shall initiate the line 33 Administrative Procedure Act rulemaking process to amend the line 34 Safer from Wildfires regulations within 30 days of publishing the line 35 final list.
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96 — 6 — AB 2416