Around the PIA Western Alliance States – Week of January 12, 2026

California — The Disaster Recovery Reform Act: Insurance Commissioner Ricardo Lara and newly-appointed Senate Insurance Committee Chair Steve Padilla announced Senate Bill 876, a comprehensive legislative reform to speed up disaster recovery for homeowners and renters through improved insurance coverage and expanded consumer protections. They are proposing legislation directly responding to wildfire disaster survivors’ call for swifter claims payments and an end to delays and runarounds by insurance companies.

“Families are navigating loss, claims, and uncertainty. There is real fear, frustration, and misinformation right now with the pace of recovery,” said Commissioner Lara, who is sponsoring the bill. “We will measure success when people can recover without red tape and delays, get coverage on their own terms, and rebuild so they are out of harm’s way in the future. While our focus is on insurance, recovery is multifaceted, not one-dimensional. Federal, state, local, and private coordination is required for a successful recovery.”

“The last 12 months have made clear the urgent need to update and modernize the claims process to better protect homeowners devastated by these wildfires,” said Senator Steve Padilla. “Homeowners deserve better and our laws need to better protect them to ensure they are compensated in a timely way and not subjected to a maze of roadblocks by insurers.”

As climate change has contributed to more severe wildfires and winter storms, decades-old insurance laws have not kept pace. Despite major efforts under Commissioner Lara to improve insurance company performance and accountability, wildfire survivors have continued to report on-going problems accessing their insurance benefits, with delays, denials, and miscommunication from insurance companies at the top of the list of consumer complaints filed with the Department of Insurance since the January 2025 

Los Angeles wildfires.

The payment of insurance claims from insurance companies for the Los Angeles wildfires is already the fastest on record, with $22.4 billion distributed since January 2025, along with $6 billion in federal, state, local, and private donations committed. The faster pace of payments is happening because of Department of Insurance enforcement and new laws that Commissioner Lara has sponsored since his first day in office, including requiring advance payments of contents and living expenses — giving families immediate access to cash while they begin the recovery and rebuilding process. The Department’s latest data shows 94 percent of 42,121 policyholder claims filed have been fully or partially paid, with $183 million returned through Department investigations. But more action is needed for successful recoveries and safer communities. 

The Disaster Recovery Reform Act, authored by Senator Padilla, aims to cut red tape, improve payouts, and end delays and runarounds by insurance companies.

Requiring a “disaster recovery plan” from insurers for handling claims and meeting timelines — reviewed by the Department in advance and put into effect in an emergency situation.

Doubling penalties during a declared emergency for violations of insurance fair claims practices and settlement law.

Requiring insurance companies pay restitution directly to policyholders when they violate the law.

Addressing delays resulting from the assigning of multiple adjusters by requiring insurance company status reports to policyholders within 5 days anytime a new adjuster is assigned.

Improving recovery by expanding policy limits for Additional Living Expenses by 100% in a declared disaster.

Expanding up-front payments by requiring Actual Cash Value and structure replacement cost be paid quickly following a total loss, with interest payable if late.

Providing adequate recovery funds by requiring a mandatory offer of extended and guaranteed replacement cost coverage when writing a policy, and regular updated replacement cost estimates for new business and renewals.

Safer rebuilding by applying mandatory building code upgrade coverage at the time of rebuild — not at the time of loss — to account for updated rules.

The legislation builds on major legislative reforms that Commissioner Lara sponsored last year after the Los Angeles wildfires. These newly enacted laws establish a wildfire safety grant mitigation program, expand insurance discounts, speed up claim payouts for wildfire survivors, extend non-renewal moratorium protections to businesses, strengthen the financial stability of the FAIR Plan, and modernize outdated insurance laws to improve transparency and accountability.

“The Southern California wildfires exposed deep weaknesses in a decades-old framework of insurance regulation and enforcement. Insurance commissioners across the country are hearing increasing consumer complaints whether it’s hurricanes, floods, or wildfires,” said Commissioner Lara. “Our goal is to make these protections a model for how insurance companies should handle claims after every disaster so people recover quickly and fairly.”

California — Transparency for Aerial Images: A bill has been introduced in the California Assembly by Democrat Assembly Member Lisa Calderon to require notification of homeowners if an insurer is taking, or using, aerial images of their property.

The bill also will stop insurers from using those images to cancel, non-renew or reduce coverage based on images older than 180 days.

“As the insurance crisis continues, it is imperative we do what we can to protect policyholders,” Calderon said. “AB 1559 empowers homeowners by adding a layer of transparency when it comes to non-renewals.”

Insurers often use drones, satellites and airplane imagery to help with inspections and to get detailed information on a property that can’t be seen via the traditional home inspection.

Source link: Insurance Journal — https://bit.ly/3Lev7c1

Hawaii — Hawaiian Electric Wildfire Settlement: Hawaiian Electric Industries has settled a dispute with shareholders who claim they were misled about safety protocols before the Maui wildfires in 2023.

The settlement is $47.75 million.

A report from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives determined the Maui fires were caused — in part — by a downed power line. The fire killed 102 people and destroyed 2,200 structures.

“The settlements of HEI shareholder derivative litigation and the securities class action litigation are separate from the previously announced global settlement for personal injury, property damage and related claims,” Darren Pai, a Hawaiian Electric spokesperson said. “Funding for the settlements related to the shareholder derivative litigation and securities class action litigation is coming from insurance, not customers of Hawaiian Electric.”

In 2024, Hawaiian Electric said they’d put $1.99 billion toward a $4 billion settlement that will compensate the wildfire victims.

Source link: PropertyCasualty360.com — https://bit.ly/45dQQYi

Washington — State decision-making authority on vaccines and preventive services: Governor Ferguson and Insurance Commissioner Patty Kuderer are jointly requesting this bill, which is sponsored by Sen. Annette Cleveland (Senate Bill 5967) and Rep. Dan Bronoske (House Bill 2242). This bill will allow the state Department of Health to propose recommendations for vaccines based on medical and scientific expertise and evidence without having to rely solely on recommendations from federal committees. This will ensure that children and adults in Washington have access to vaccines that are grounded in science around safety and efficacy. The bill also preserves health plan coverage for DOH-recommended vaccines and freezes coverage for federal preventive services recommendations. This bill does not establish new vaccine mandates or change any laws related to consent for immunizations. It is in response to the Trump Administration’s politicization of the federal Centers for Disease Control and Prevention.

Washington — Kuderer announces priorities for 2026 legislative session: Washington state Insurance Commissioner Patty Kuderer’s priorities are focused on protecting consumers, responding to wildfires’ impacts on home insurance, and preserving access to preventive services as the 2026 legislative session begins.

“I’ve always seen consumer protection as a key element of insurance regulation, and my priorities this year reflect that,” Kuderer said. “I’m excited to work with our state lawmakers to help protect our people, their home coverage and their health insurance rights.”

The Office of the Insurance Commissioner’s website has a complete list of Kuderer’s sponsored bills, which include:

    Strengthening consumer protection by increasing insurer accountability for violations of the insurance code. House Bill 1199 and Senate Bill 5331 give the insurance commissioner authority to order restitution for people harmed when an insurance company violates state law and eliminates a disparity in the commissioner’s fining authority over different types of insurers.

    Protecting consumers by prohibiting post-loss assignment of benefits in insurance claims. This bill bans post-loss assignment of benefits agreements, which transfer the policyholder’s rights, including claim payments, to a third-party.

    Concerning wildfire risk models and score disclosure. House Bill 2277 and Senate Bill 5928 will require insurers to disclose fire risk scores — used to evaluate a home’s exposure to wildfire and determine eligibility, pricing and renewals —  and provide an explanation of the factors and what steps the consumer can take to improve the score.

    Enhancing public safety and combating insurance fraud. House Bill 2394 and Senate Bill 6031 expand the definition of insurance fraud in state law and makes it a class B felony. The bills recognize insurance fraud victims include consumers and beneficiaries, making them eligible for criminal restitution. They also authorize the OIC’s criminal investigators to investigate a wider scope of crimes impacting the insurance industry.

    Preventive services bill. House Bill 2242 and Senate Bill 5967 will preserve access to preventive services protections and additional provisions of the Affordable Care Act in state law. The bills change preventive services coverage law to refer to the Department of Health’s recommendations, rather than the federal Advisory Committee on Immunization Practices.

    Strengthen Washington Homes grant program. House Bill 2407 would establish this voluntary grant program to help retrofit existing homes using the Insurance Institute for Business & Home Safety (IBHS) Wildfire Prepared Home standards. Homes meeting this standard are better positioned to resist wildfire damage, which helps maintain insurance coverage and stabilize the market in high-risk areas.

The 2026 legislative session begins on Monday, Jan. 12.

For more information — https://bit.ly/49QM6KG

Washington — Clarifying and updating the minimum standards for claims handling third prepublication draft posted:

We released a third prepublication draft for the clarifying and updating of the minimum standards for claims handling rule (R 2025-05). The Commissioner is considering rulemaking relating to conduct that may be unfair or deceptive and to clarify and update the minimum standards that first party and third party insurers must comply with during any claim investigation and adjustment.

The comment period for the third prepublication draft began on January 8, 2026 at 8 a.m. and is open until February 3, 2026 at 11:59 p.m.

For more information, including the text of the third prepublication draft, please visit the rule's webpage.

Washington — Kuderer fines Kaiser $300,000 for MHPAEA violations: Washington state Insurance Commissioner Patty Kuderer fined Kaiser Foundation Health Plan of Washington $300,000 on Wednesday, Jan. 7, for violations of the Mental Health Parity and Addiction Equity Act (MHPAEA), with $100,000 suspended.

“I’ve seen a trend among our state’s largest health insurers of mental health parity issues,” Kuderer said. “The market scans that started our work on these violations was an important step and I’m glad to see these issues corrected so Washingtonians have the access they deserve to these important services.”

The Office of the Insurance Commissioner (OIC) issued a behavioral health market scan in March of 2019 and received incomplete responses from Kaiser, which prompted a second market scan in January of 2020.

The second market scan called for comparative analysis of utilization management, provider admission standards, provider directory, and network adequacy non-quantitative treatment limitations.

MHPAEA requires health carriers to provide documentation explaining the treatment limitations within the plan and how those limitations compare between behavioral health benefits and medical and surgical benefits offered by the carrier’s health plans. Insurance companies must provide the OIC with that information upon request.

Kaiser failed to provide sufficient documentation for two treatment limitations — provider admissions standards and network adequacy.

Additionally, it couldn’t provide detailed documentation showing how it initially worked to address disparate results in provider reimbursements and network adequacy standards.

Kaiser did, however, provide information on how it worked to remedy these discrepancies after the OIC initiated a continuum action to address the results of the second market scan.

Kuderer agreed to suspend $100,000 of the fine if Kaiser commits no further MHPAEA violations for two years and meets the conditions of a compliance plan.

Kuderer previously fined Regence BlueShield $550,000 in November and Premera $550,000 in August for mental health parity violations.