Insurance: residential and commercial.

Existing law establishes the Department of Insurance, headed by the Insurance Commissioner, which regulates insurers and insurance practices. Existing law divides insurance into classes, including, among others, life insurance, fire insurance, and marine insurance. Under existing law, an insurer is entitled to payment of the premium as soon as the subject matter insured is exposed to the peril insured against. This bill would require, upon an appropriation, the state to pay for any annual increase in residential property insurance rates that is above either an annual increase of 7% or the annual national average increase in residential insurance premiums, whichever is lower. The bill would require, by March 31, 2026, the Department of Insurance, in consultation with insurers in the insurance industry, to provide a report to the Legislature on, among other things, how to slash regulations on the insurance market to achieve efficiencies to keep residential property insurance rates at or below the annual national average increase in residential insurance premiums. The bill would repeal these provisions on January 1, 2030. Existing law imposes a gross premiums tax of 2.35% on all insurers doing business in this state, as set forth in the California Constitution. This bill would, until January 1, 2030, set the gross premiums tax rate for premiums received for residential property insurance policies at 0% for premiums received on or after January 1, 2026.