The California FAIR Plan Association, a consortium of all insurers licensed to provide property insurance in the state, will expand its clearinghouse to include commercial policies such as those for farms and condominiums, beginning July 1.
This expansion follows the enactment of Senate Bill 505 (Rubio) in 2023, reflecting a concerted effort to reduce dependence on the FAIR Plan and stabilise California’s property insurance market.
In 2020, the FAIR Plan collaborated with stakeholders to pass AB 3012 (Wood/Daly), which established the FAIR Plan’s clearinghouse programme.
This initiative allows FAIR Plan dwelling policyholders a pathway to reintegrate into the voluntary insurance market. SB 505, which received support from the FAIR Plan, broadens the scope of this programme to include commercial policies.
With potential insurance options emerging in the voluntary market, this expansion aims to shift more policies away from the FAIR Plan, thereby addressing its significant risk exposure.
The clearinghouse programme provides participating insurers with monthly updates on FAIR Plan policy data, excluding specific customer contact details.
Insurers can evaluate existing FAIR Plan policies to explore potential alternatives. Crucially, the clearinghouse fosters cooperation between brokers and insurers to identify policies suitable for transitioning from the FAIR Plan to the voluntary market.
The FAIR Plan remains committed to ongoing collaboration with the California Department of Insurance, the Governor, the Legislature, and other stakeholders.
This commitment aims to stabilise the market and reduce dependence on the FAIR Plan, in line with the objectives of the Insurance Commissioner’s Sustainable Insurance Strategy.
The FAIR Plan includes all insurers licensed to offer property insurance in California and is funded primarily through policy premiums, operating independently from state funding.
It serves as a vital insurer of last resort, providing essential property coverage to Californians who cannot access the voluntary insurance market until they can secure alternative coverage.
