The Assembly Insurance Committee meeting held on May 28, 2025, focused on significant developments within California's insurance landscape, particularly regarding the California Fair Plan and its evolving coverage stipulations.

The meeting began with a review of the California Department of Insurance (CDI) fare plan stipulations, highlighting changes in coverage limits for residential and commercial properties. Residential dwelling limits have increased from $1.5 million to $3 million, a change that took effect in 2021. For commercial projects, the coverage limit has risen dramatically from $20 million to $100 million per location, effective mid-July 2025. Additionally, a pending CDI order aims to align homeowner coverage under the Fair Plan with that of the private market.

Two legislative bills were also discussed: AB 290, which seeks to extend grace periods for policy renewals, and SB 525, which mandates replacement coverage for manufactured and mobile homes. These bills indicate a potential expansion of the Fair Plan's offerings in 2025.

The committee then reviewed the growth trajectory of the Fair Plan since 2018, noting a consistent annual growth rate of 8% to 11%. In 2023, following market shifts with major insurers like State Farm withdrawing, the Fair Plan experienced a remarkable 40% increase in policy count and a 60% rise in exposure. As of March 2025, the plan reported nearly 575,000 policies and approximately $600 billion in exposure.

A notable trend in this growth is the increasing number of policies in low wildfire hazard areas, which have seen a 40% increase in exposure in the first half of the fiscal year. This shift marks a departure from the plan's historical focus on high wildfire risk areas, indicating a diversification of the customer base.

The meeting concluded with a discussion on the goal of depopulation, emphasizing the importance of transitioning customers back to the admitted market, which is viewed as a more stable and beneficial environment for policyholders. The committee underscored its commitment to supporting customers while navigating the complexities of the current insurance market.