Assembly Insurance Committee Reviews Sustainable Insurance Strategy and Smoke Damage Response
Published Friday, February 20, 2026
The Assembly Committee on Insurance held an informational hearing focused on the California Department of Insurance’s implementation of its sustainable insurance strategy. The strategy reflects the department’s modernization of rate pricing and processing regulations during the past two years, aimed at preventing admitted-market insurers from leaving California.
California Insurance Commissioner Ricardo Lara presented testimony highlighting insurers that have begun increasing policy writing and the insurance impacts stemming from the Los Angeles fires.
Southern California Wildfire Recovery Data
Claims performance and recovery data (Los Angeles wildfires): Insurance remains the single largest source of recovery funding.
- $22.4 billion paid to survivors.
- Approximately $6 billion provided from federal, state, and local sources.
The fires have brought attention to ongoing concerns regarding smoke damage. Smoke-related claims have emerged as a significant unresolved challenge, with reports of severe health symptoms, conflicting expert assessments, unsafe living conditions, and instances in which insurers have minimized or denied claims.
In response, the department has established a Smoke Claims Remediation Task Force and is sponsoring Assembly Bill 1795 (Mike Gipson, D-Carson), the Smoke Damage Recovery Act, which would:
- Establish science-based standards for smoke testing and restoration.
- Create uniform claims-handling practices.
- Provide immediate relief by allowing survivors to rely on local standards while statewide standards are developed.
- Develop health-based re-entry guidelines, and designate state and local agencies to implement and enforce them.
Turning to the broader insurance market, Lara described differences in insurer behavior following the Los Angeles fires compared to past disasters. He noted that under the new regulatory framework, major insurers are filing for rate changes, receiving approvals and committing to expand underwriting—particularly in wildfire-distressed areas.
Historically, following major disasters, insurers raised rates, froze new business or withdrew from high-risk areas without any obligation to return. According to the commissioner, the new approach directly ties rate approvals to commitments to expand coverage in high-risk zones.
Staff contact: Peter Ansel, pansel@cfbf.com.
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