R Street commends California’s legislature for passage of AB 2927 to advance earthquake resilience
SACRAMENTO (August 21, 2018) – The R Street Institute is delighted by yesterday’s unanimous passage of Assembly Bill 2927 (Nazarian), moving it forward to the desk of Governor Jerry Brown’s for signature into law.
Proposed in Insurance Journal by R Street Associate Vice President of State Affairs Ian Adams on February 8, “AB 2927 changes California law to allow the California Earthquake Authority to access nearly $1 billion in additional capital for purposes of rate stabilization and growth. It does so by affirming that, in the event a major seismic event exhausts the Authority’s other sources of capital, the CEA’s Governing Board shall have an obligation to levy an assessment on existing policyholders,” Adams said.
Vitally, the bill secures the additional capital for the CEA without recourse to a broad-based assessment on all Californians that would function as a tax.
The CEA’s need for additional capital stems from a recent period of sustained expansion resulting in an ever-growing number of Californians gaining protection from the financial consequences of the state’s substantial earthquake risk. Continued access to affordable earthquake coverage is crucial because California, even with the CEA’s success, remains dramatically underinsured relative to the extent of the peril it faces.
With the support of the CEA, the California Department of Insurance, and United Policyholders, the straightforward salutary nature of the proposed R Street policy ensured that AB 2927, throughout the entire legislative process, never received a “no” vote. It now awaits signature by Governor Brown.