1. (a) Distressed areas, and properties insured by FAIR Plan policies, that are to be used in insurer commitments for the purposes of this section 2644.25.3 are as defined in subdivision (a) of section 2644.4.8.
2. (b) Statewide market share calculations for the purposes of this section 2644.25.3 will be determined as described in subdivision (b) of section 2644.4.8.
3. (c) An insurer shall, as part of a complete rate application filing made pursuant to section 2648.4, submit an insurer commitment as set forth in subdivision (d), (e) and/or (j) of this section.

4. (d) Insurer commitments with respect to qualifying residential property insurance.

   1. (1) Eighty-five percent standard.

      1. (A) The insurer shall commit to write in distressed areas a number of policies that is no less than the product of (1) the insurer's statewide market share, as calculated pursuant to subdivision (b)(1) of section 2644.4.8, (2) 0.85, and (3) the total number of statewide distressed areas earned exposures pursuant to subdivision (b)(2) of section 2644.4.8; or
      2. (B) In the event the insurer already meets or exceeds the eighty-five percent standard set forth above in subdivision (d)(1)(A) of this section at the time of its rate application, the insurer shall commit to maintaining at least the same number of earned exposures in the distressed areas as it reported in the rate application filing pursuant to subdivision (c) of this section.

   2. (2) Five percent increment.

      After the approval of its rate filing (the insurer's “performance date” hereinafter), the insurer may instead commit to writing additional policies as specified in subdivision (d)(3) in the voluntary market inside the distressed areas of the state such that, on the performance date, the insurer has increased its number of earned exposures inside the distressed areas by at least the number of policies equal to five percent (5%) of its earned exposures in the distressed areas of the state within the most recent 12 month period used in its recorded period as submitted in the insurer's rate application pursuant to subdivision (c) of this section. Upon meeting the initial five percent (5%) increment, the insurer shall commit in writing in each subsequent two year (730 days) period to writing additional policies as specified in subdivision (d)(3) in the voluntary market inside the distressed areas of the state such that it continues to increase its number of earned exposures inside the distressed areas by at least the number of policies equal to an additional five percent (5%) of the insurer's earned exposures in the distressed areas of the state until it meets or exceeds the eighty-five percent standard set forth above in subdivision (d)(1)(A) of this section.

   3. (3) In the event that one or more of the bulletins described in subdivision (a) of section 2644.4.8 that is or are referred to in an insurer's approved rate application pursuant to subdivision (c) of this section (the insurer's “starting bulletin or bulletins” hereinafter) have been updated since the time the application was filed, then the insurer may satisfy its insurer commitment according to the same procedures as subdivisions (d)(3)(A) and (d)(3)(B) of section 2644.4.8.
   4. (4) The additional policies written in order to satisfy the requirement of subdivision (d) of this section shall include only the additional policies described in subdivision (d)(4) of section 2644.4.8.

   The insurer shall commit in writing to achieving no later than two years (730 days) after the approval of its rate filing (the insurer's “performance date” hereinafter), or maintaining, and then subsequently maintaining, the insurer's earned exposure commitment in the distressed areas of the state as follows:

5. (e) Insurer commitments with respect to commercial property insurance shall be made in the same manner as subdivision (f) of section 2644.4.8. Upon meeting the initial five percent (5%), as described in subdivision (f)(2) of section 2644.4.8, the insurer shall commit in writing in each subsequent two year (730 days) period to writing additional policies such that it insures, and maintains, additional properties in eligible ZIP codes whose total insurable value is, in the aggregate, at least equal to five percent (5%) of the sum of the total insurable value of its insured properties in all the eligible ZIP codes, taken as a whole, until it has made a total of three (3) five percent (5%) commitments in order to consider the cost or benefits of reinsurance as permitted by subdivision (b) of section 2644.25.1.
6. (f) An insurer shall document the fulfilment and maintenance of its insurer commitment as described in subdivision (g) of section 2644.4.8, with the exception of the application of the subdivision (g)(3)(C).
7. (g) A modification of an insurer commitment shall be governed as described in subdivision (h)(1) of section 2644.4.8.
8. (h) If at any time an insurer fails to fulfill its insurer commitment, or within a period of two years after the approval of its original application, or at any point thereafter, fails to make reasonable progress toward timely fulfilling its insurer commitment, then the insurer shall immediately submit a new rate application renouncing its insurer commitment as described in subdivision (d) or (e) of this section. In this case, the new rate application shall not consider the costs or benefits of reinsurance as permitted by subdivision (b) of section 2644.25.1.
9. (i) An insurer that obtained approval to consider the cost or benefits of reinsurance in its original application shall file one of the attestations described in subdivision (i)(1) and (2) of section 2644.4.8 in every subsequent rate application.
10. (j) Any contrary provision of this section notwithstanding, if for any of the reasons stated in subdivision (j)(1) of section 2644.4.8, an insurer is unable, in good faith, to make a commitment as set forth in subdivisions (d) or (e) of this section, then an insurer may propose an alternative commitment in a complete rate application filing made pursuant to subdivision (c) of this section, as described in subdivision (j)(2) of section 2644.4.8.
11. (k) Nothing in this section shall be construed as limiting, in any way, an insurer's ability to offer qualifying residential property insurance or commercial property insurance in this state.
12. (l) If any provision or clause of this section or the application thereof to any person or situation is held invalid, such invalidity shall not affect any other provision or application of this section which can be given effect without the invalid provision or application. To this end, the provisions of this section are hereby declared to be severable.

An insurer that opts to make, fulfill, and document the fulfillment of its insurer commitments in the manner specified in this section 2644.25.3 may consider the cost or benefits of reinsurance as permitted by subdivision (b) of section 2644.25.1.

The term “qualifying residential property insurance,” for purposes of this section 2644.25.3, is as defined in section 2644.4.8.

Note: Authority cited: Sections 1861.01 and 1861.05, Insurance Code; and 20th Century v. Garamendi, 8 Cal.4th 216 (1994). Reference: Sections 1861.01 and 1861.05, Insurance Code; and Calfarm Insurance Company v. Deukmejian (1989) 48 Cal.3d 805.

History

1. New section filed 1-13-2025 pursuant to Government Code section 11343.8; operative 1-13-2025. Submitted to OAL for filing and printing only pursuant to Government Code section 11340.9(g) (Register 2025, No. 3).