Article 10.85 - Insurance and Climate Risk Market Intelligence Act

California Insurance Code — §§ 937-937.5

Sections (6)

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

The Legislature finds and declares all of the following:

(a)Since 2006, the state of California has funded and undertaken four comprehensive climate change assessments designed to assess the impacts and risks from climate change. The most recent, California’s Fourth Climate Change Assessment, identified that if greenhouse gas emissions continue to increase, the frequency of extreme wildfires will increase.

(b)The Department of Insurance’s review of the multistate Climate Risk Disclosure Survey in 2023 showed that insurance companies commonly identified that the purchase of reinsurance is a primary strategy for addressing

increased risks from catastrophic events such as wildfires and the use of catastrophe modeling is a prominent risk assessment tool.

(c)It is in the state’s interest to expand insurance options for consumers in wildfire-distressed areas of California.

(d)It is in the state’s interest to understand the trends in the insurance markets and the reinsurance strategies and models used by insurance companies, not only to expand the writing of insurance policies, but to understand the systemic risk to the solvency of insurance companies that write policies in wildfire-distressed areas.

(e)Regularly updated information will support the ability of the department to further understand the California residential and commercial

property insurance market by providing point-in-time information so the department can evaluate reinsurance trends across the market.

(1)The regularly updated information may include, but shall not be limited to, all of the following:

(A)The overview of a reinsurance program.

(B)The catastrophe program in place.

(C)The type of risk covered.

(D)The California-specific information.

(E)Year-over-year changes.

(f)Regularly updated data will allow the department to better analyze

market trends and scenarios, which in turn will result in better, more informed communication to California consumers.

§ 937.1

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

(a)(1) On or before March 1, 2026, and on or before March 1 of every year thereafter, an admitted insurer in a group with written premiums in the prior year from fire, allied lines, private flood, homeowners, farmowners, and commercial nonliability lines totaling fifty million dollars ($50,000,000) or more shall submit a report to the commissioner that shall only include data and information necessary to understand its reinsurance program placement data and use of probabilistic catastrophic models for the previous year for policies.

(2)Reports filed on or before March 1, 2026, shall include data from the latest available reinsurance treaty

year. Subsequent reports shall likewise include data from the latest reinsurance treaty year available when the report is due.

(3)The commissioner may specify the manner of submission, format, and content of the report required pursuant to paragraph (1).

(b)An insurance holding company system, as defined in subdivision (h) of Section 1215, may submit a consolidated report of the information required by this section for all insurers comprising the holding company system.

(c)Upon submission of a report pursuant to this section, the insurer shall promptly respond to inquiries from the commissioner or their representative regarding the information submitted in the report.

§ 937.2

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

Notwithstanding Section 937.3, information submitted to the commissioner under this article shall be confidential pursuant to Section 7929.000 of the Government Code and exempt from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Additionally, that information shall not be subject to subpoena or subpoena duces tecum. Testimony by the commissioner, the commissioner’s staff, an employee of the department, or a person to whom the report required by Section 937.1 was disclosed, regarding the contents of a report submitted pursuant to Section 937.1, shall be inadmissible as evidence in a civil proceeding.

§ 937.3

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

(a)The commissioner shall post to the department’s internet website an aggregated report based on the data collected under Section 937.1.

(b)The report shall include only data and indices aggregated sufficiently to avoid identification of individual company reinsurance practices.

(c)The aggregated report shall not identify an individual respondent or insurer and may be updated every year to reflect new data submitted by admitted insurers under Section 937.1.

§ 937.4

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

(a)Failure to submit a report under Section 937.1 shall subject an admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000) for each 30-day period that the insurer is not in compliance, unless the failure to comply is willful, in which case the civil penalty shall be in an amount not to exceed ten thousand dollars ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000). The commissioner shall collect the amount payable and may bring an action in the name of the people of the State of California to enforce collection. These penalties shall be in addition to other penalties

provided by law.

(b)An insurer may request, and the commissioner may grant, a 30-day extension to submit a report pursuant to Section 937.1 if needed due to unintended or unforeseen delays. If the insurer fails to submit a report pursuant to Section 937.1 after the granted 30-day extension has passed, the commissioner may find that the failure to submit the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000) for each 30-day period that the insurer is not in compliance, but not to exceed an aggregate amount of one hundred thousand dollars ($100,000).

(c)The penalty imposed by this section may be appealed by means of a remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division

3 of Title 2 of the Government Code.

(d)The commissioner may consider an insurer’s violation of this section or article as the basis for other enforcement action against an insurer, as authorized by law.

§ 937.5

Added by Stats. 2025, Ch. 542, Sec. 1. (SB 495) Effective January 1, 2026.

The commissioner may promulgate regulations that further the purposes of this article.