The bill sets requirements for insurers underwriting homeowners and other property insurance policies that use wildfire risk models, catastrophe models, or a combination of these models, or scoring methods. The key provisions of the bill include:
Sharing Information:
Insurers must share certain information about the models they use with the commissioner of insurance and the public. This ensures transparency regarding the methodologies insurers apply in determining risk and setting premiums.
Inclusion of Specific Activities:
The bill requires that specific activities related to wildfire risks and potential catastrophes must be included in the models used by insurers. This might involve considering factors such as local wildfire history, proximity to fire-prone areas, or mitigation efforts in place.
Notices to Policyholders:
Insurers are required to notify policyholders about the specific wildfire risk models or scoring methods being used to determine their insurance premiums or eligibility. This ensures that policyholders are aware of the factors affecting their coverage.
These measures aim to increase transparency and fairness in how insurance policies are underwritten, especially in regions vulnerable to wildfires, and provide policyholders with better understanding and communication of the factors influencing their insurance coverage and costs.
Summary
For the purposes of underwriting homeowners and other property
insurance policies, the bill requires insurers who use a wildfire risk model, a catastrophe model, a combination of models, or a scoring method to adhere to specific requirements that concern the sharing of information with the commissioner of insurance and the public, the inclusion of specific activities in the models, and providing notices to policyholders.
