3 minute read
Insurance Coverage a Big Focus in 2024
By Jennifer Wada, Esq.
Legislators in California introduced 2,124 bills in this year’s legislative session. Some of the bills focus on high-profile topics like artificial intelligence and retail theft. And, of course, a large number of them focus on housing affordability. As for legislation that directly impacts the management industry, here are some newly introduced key bills:
AB 2114
Irwin: Balcony Inspections
Current law requires the association board of a condominium project to conduct a visual inspection, by January 1, 2025, and at least every 9 years, of the exterior elevated elements for which the association has maintenance or repair responsibility. Current law requires the inspection to be conducted by a licensed structural engineer or architect. This bill would additionally authorize a licensed civil engineer to conduct the inspection.
AB 2159
Maienschein: Electronic Voting
This bill would authorize an association to conduct an election by electronic secret ballot unless the association’s governing documents provide otherwise. If an electronic secret ballot is conducted by internet website, the bill would require individual notice of the ballot be delivered to each member and would require that notice to also include specified information, including instructions on how to vote by electronic secret ballot. The bill would specify that an electronic secret ballot is effective when transmitted and irrevocable. The bill would prohibit the use of an electronic secret ballot unless the association creates procedures that provide an opportunity for members to vote by written secret ballot.
AB 2460
Ta: Quorum Bill Cleanup
Last year, AB 1458 was enacted that allowed for a 20% quorum in the event an association failed to get quorum upon its first attempt. There was confusion in the industry as to whether governing documents with a lower quorum requirement were still valid in light of the bill. AB 2460 will amend the statutory notice provisions to clarify that upon failure to achieve quorum on the first attempt, the association may reconvene a subsequent meeting at which time the quorum will be 20%, unless the governing documents of the association provide for a lower quorum.
AB 2996
Alvarez: FAIR Plan and CIDs
The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate in administering a program for the equitable apportionment of basic property insurance for persons who are unable to obtain coverage through normal channels. This bill would, until January 1, 2028, require the FAIR plan to develop, maintain, and offer to sell basic property insurance common interest development policies and commercial farming enterprise policies with policy limits up to $20 million per structure. It would require the FAIR Plan to file a new rate application consistent with AB 2996 to the Insurance Commissioner within 30 days. The application must include a plan for the equitable apportionment for condo associations that are unable to procure basic property insurance through normal channels from an admitted insurer. Given the astronomical premium increases associations are facing, this bill has an urgency clause in it, which means it would be effective upon signature by the Governor. It also means that a 2/3 vote by the Legislature is required.
Insurance coverage will be a focus for the industry this year and CACM is partnering with many interest groups to try to alleviate the current crisis. We are in the beginning stages of the legislative process, with policy committee hearings just beginning. CACM will keep you apprised of developments as these bills move through the process.
