SACRAMENTO – Senate Majority Leader Bob Hertzberg (D-Van Nuys) announced that his Resilient Homes Initiative, SB 254, cleared its first hurdle when it passed the Senate Insurance Committee yesterday.
The Resilient Homes Initiative will enhance the California Earthquake Authority’s (CEA) existing claim-paying capacity by adding a new, lower cost alternative to reinsurance and other existing tools. CEA will in turn make annual payments in exchange for this new capacity, with the funds (estimated to be between $70-$100 million) being devoted to pre-earthquake retrofit and mitigation programs in “High Seismic Risk Zones.”
“This measure is all about public safety and getting ahead of the issue,” said Senator Hertzberg. “But it’s also a creative solution that creates serious cost savings for the CEA that can be redirected to mitigation and preparation efforts, instead of into the pockets of reinsurance companies. I look forward to working with the sponsor and my colleagues to improve and fine tune the bill as it moves through the legislative process.”
The Senator was joined in testimony by California Insurance Commissioner Ricardo Lara and Glenn Pomeroy, CEO of the California Earthquake Authority.
“The senators who voted for the Resilient Homes Initiative today voted to help tens of thousands of Californians be better prepared to survive the next big earthquake,” said Glenn Pomeroy, CEO of the California Earthquake Authority. “Taking aggressive steps now to strengthen these homes will help save homes and lives when that inevitable day arrives.”
Because of the restructured funding, the bill would also empower (but does not require) the CEA to collect small assessments on insurance premiums on policies covering property and risks in the “High Seismic Risk Zones” – only in the event that we encounter an earthquake of unprecedented magnitude and damage, and after all other reserves are exhausted.
The bill will next be heard in the Senate Appropriations Committee.