Newsom Vetoed Bills Targeting Insurer Claim Delays
Governor Gavin Newsom rejected two bills that would have codified insurance claim timelines into California state law.
Updated on Sept. 28, 2026 in Insurance
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Governor Gavin Newsom vetoed Senate Bill 877 and Senate Bill 878, which aimed to establish mandatory interest payments for late insurance claims. The veto stops these regulations from being codified into state law.
Why it matters
The bills were intended to provide greater accountability for home insurers handling claims for fire survivors in California. Governor Newsom argued the legislation was unnecessary because the Department of Insurance already maintains regulations regarding claim documentation and payment timelines.
The veto rejects the codification of existing Department of Insurance regulations into state law. These regulations currently govern claim documentation and payment timelines for policyholders.
The players
Gavin Newsom
Gavin Newsom is the Governor of California who holds executive veto power over state legislation.
Sasha Renée Pérez
Sasha Renée Pérez is a California State Senator representing a district that includes Pasadena.
Department of Insurance
The Department of Insurance is the state agency responsible for adopting regulations regarding insurer claim documentation and payment.
The details
Authored by State Senator Sasha Renée Pérez, the legislation sought to enforce specific timeframes and interest payments for insurers handling claims. Supporters now plan to reintroduce these protections next year.
Timeline
The California Legislature passed the bills in August 2026.
Governor Gavin Newsom signed the veto message on September 27, 2026.
Market Dynamics
The veto maintains the current regulatory status quo established by the Department of Insurance rather than elevating those rules into statutory state law. This decision highlights the ongoing tension between administrative oversight and legislative codification in the insurance sector.
Policyholders will remain subject to existing administrative regulations rather than the new legal standards proposed by the legislature. This outcome preserves the status quo for consumers awaiting claim payments.
The takeaway
The rejection of these bills highlights the difference between regulatory guidelines and state-mandated laws for insurance handling. Consumers should continue to refer to current Department of Insurance regulations when tracking their claim timelines.
Further reading
For more on the current rules governing how insurers handle claims in the state, visit the California Insurance section.
Live Poll
Should California law require stricter deadlines for insurance companies to pay disaster claims?
