RES-2024-108RESOLUTION NO. 2 0 2 4 -10 8
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ANAHEIM REQUESTING THE STATE OF CALIFORNIA
TAKE EMERGENCY ACTION TO STRENGTHEN AND
STABILIZE CALIFORNIA'S MARKETPLACE FOR
PROPERTY INSURANCE
WHEREAS, in 1988, California voters enacted Proposition 103, establishing essential
consumer protections aimed at maintaining fair and affordable insurance rates while ensuring a
competitive marketplace; and
WHEREAS, last year, two of the state's largest insurance carriers, representing over 27
percent of California's admitted insurance market, announced their decision to cease issuing new
homeowners and commercial property insurance policies; several other insurers, accounting for
an additional 36 percent of the market, indicated plans began to limit new policy issuance; and
WHEREAS, the decrease in insurance options directly impacts consumer access to
coverage, leaving homeowners and business owners statewide unable to secure new insurance
policies from the admitted market; and
WHEREAS, the City of Anaheim has a unique disposition, with neighborhoods located
near wildfire areas and are at risk of losing or obtaining insurance policies on their properties;
and
WHEREAS, access to insurance is vital for homeowners to protect their most significant
asset and enables homebuyers to obtain mortgages for properties that build generational wealth;
a lack of insurance options can freeze real estate transactions and hinder new housing
development, worsening the state's critical housing shortage; and
WHEREAS, the state of California, Orange County, the City of Anaheim, our
neighborhoods and individual homeowners have spent billions of dollars to reduce the risk of
wildfire, including hazardous fuel reduction, prescribed burns, community wildfire protection
plans, home -hardening, defensible space around their property, buffer zones around properties,
and more; however, those actions have not made insurance more available and affordable; and
WHEREAS, prescribed burns, vegetation management and homeowners' defensible
space measures have been credited by county fire officials and academics for saving structures in
the Bridge, Line and Park fires, but those actions have not made insurance more available or
affordable; and
WHEREAS, Californians unable to secure coverage from the admitted market are
compelled to apply for the California Fair Access to Insurance Requirements (FAIR) Plan, a
state -established, insurance -industry controlled risk pool designed as a last resort, providing
temporary - but limited - coverage as consumers seek traditional insurance options; and
WHEREAS, the decline of the admitted -provider market has resulted in a steady increase
in FAIR Plan enrollment over the past five years, jeopardizing the plan's stability and in a worst
case scenario can put this safety net at risk; and
WHEREAS, policy decisions have exposed California's homes and businesses to
catastrophic loss, which can only be mitigated by stabilizing the homeowners and commercial
property insurance markets while ensuring fair and affordable rates, and maintaining the FAIR
Plan's viability for consumers whose policies are nonrenewed and for homebuyers needing
insurance for mortgage approval; and
WHEREAS, while the California Insurance Commissioner has proposed draft regulations
to address this urgent crisis, which consumer advocates contend will raise insurance rates while
not resolving the problem, and lead to higher insurance rates, and which the Little Hoover
Commission's hearing on March 28, 2024, indicated that such reforms will not have any effect
"until at least 2026," and may have potential further delays due to legal challenges; and
WHEREAS, the California Insurance Commissioner possesses broad authority under the
Insurance Code to adopt emergency regulations that promote public welfare, including under
sections 1861.01, 1861.05, and 1861.055 for insurance rate change applications, as well as under
section 11346.1 of the Government Code and section 12921.7 of the Insurance Code.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF ANAHEIM, as follows:
The Insurance Commissioner, State Legislature, and the Governor are urged to declare a state of
emergency and to take immediate regulatory and legislative actions aimed at strengthening and
stabilizing California's marketplace for property insurance. The following objectives should
guide their regulatory response:
1. Expand coverage options for all consumers, particularly in underserved areas of the state.
2. Prioritize wildfire risk reduction with funding to incentivize local wildfire mitigation.
3. Require insurance pricing and sales decisions to reflect these substantial investments in
risk reduction.
4. Enhance the efficiency, speed, transparency, and public participation in the California
Department of Insurance's rate approval process.
5. Adjust the rate approval process to consider all necessary factors for fostering a robust
and competitive insurance marketplace, including potential revisions to the assessment of
catastrophe risks, reinsurance costs, and other legitimate insurer expenses.
6. Ensure the long-term availability of homeowners and commercial property insurance
coverage.
7. Safeguard the solvency of the FAIR Plan, promoting long-term resilience against extreme
weather events, by identifying strategies to reduce its market share in underserved areas
and facilitate the transition of its customers to the admitted insurance market.
8. Ensure decisions about where homeowners can and cannot live are made by elected
leaders, not the insurance industry through the price of insurance.
9. Protect the stability of California's insurance market by requiring insurance companies
that do business in the state to sell insurance to all customers who require it, at a fair
price.
THE FOREGOING RESOLUTION is approved and adopted by the City Council of the
City of Anaheim this 29 day of October , 2024 by the following roll call vote:
AYES: Mayor Aitken and Council Members Kurtz, Diaz,
Leon, Rubalcava, Faessel and Meeks
NOES: None
ABSENT: None
ABSTAIN: None
CITY OF ANAHEIM
By:
MAYOR OF n CITY OF ANAHEIM
ATT T:
Y CLERK OF THE CITY OF ANAHEIM
3
CLERK'S CERTIFICATE
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM )
I, THERESA BASS, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the
original Resolution No. 2024-108 adopted at a regular meeting provided by law, of the Anaheim
City Council held on the 29t' day of October, 2024 by the following vote of the members thereof:
AYES: Mayor Aitken and Council Members Kurtz, Diaz, Leon, Rubalcava,
Faessel and Meeks
NOES: None
ABSTAIN: None
ABSENT: None
IN WITNESS WHEREOF, I have hereunto set my hand this 301 day of October. 2024.
CI ERK OF THE CITY OF ANAHEIM
(SEAL)