Assembly Speaker Robert Rivas assigned a legislative working group earlier this year to draft reforms to AB 218, the 2019 law that permanently eliminated the statute of limitations for childhood sexual abuse claims against California public entities. The group’s work has been slow, according to EdSource, but reform proposals on the table include damage caps, a state-funded victims’ compensation fund, attorney fee limits, and a heightened “clear and convincing” proof standard for claims older than 20 years.
The financial pressure is substantial. The Fiscal Crisis and Management Assistance Team (FCMAT), in a January 2025 report to the legislature, estimated that claims brought against local educational agencies under AB 218 total $2 billion to $3 billion, with the final number likely higher. Los Angeles Unified issued $500 million in bonds to fund settlements. Los Angeles County struck nearly $5 billion in settlements for abuse in juvenile detention and foster care. At the other end of the scale, Montecito Union School District (350 students) spent nearly all of its $12 million in savings on a single $9 million settlement.
Who it affects
Self-insured school districts, county offices of education, community college districts, and the joint powers authorities (JPAs) that pool their liability coverage. The Schools Excess Liability Fund (SELF), which covers more than half of California’s roughly 1,100 school districts, is losing reinsurers willing to participate. Sierra Sands Unified, a 5,000-student district, saw insurance premiums rise 73% over three years. Districts with no abuse allegations still pay through JPA supplemental assessments; SELF has warned member districts to expect $300 million to $400 million in additional assessments for ongoing and new AB 218 claims.
The reserve mechanism
The reform proposals split into two reserve-relevant channels.
Severity. Damage caps and a heightened proof standard would reduce expected claim severity on open AB 218 claims. If the legislature caps pain-and-suffering awards at four times economic damages and requires clear-and-convincing proof for claims older than 20 years, actuaries should model higher dismissal rates and truncated severity distributions on pending claims. If reforms stall, the current benchmarks (LA County’s multi-billion-dollar settlements, Montecito Union’s $9 million single-claim payout) remain the working assumption.
Retained risk. Reinsurer withdrawal from SELF and the commercial market’s reluctance to write AB 218 exposure increase retained risk for member districts. Higher self-insured retentions mean correspondingly larger IBNR reserves for public entities, particularly for late-reported institutional claims with no historical frequency baseline. New Jersey’s recent Supreme Court ruling holding school districts vicariously liable for employee sexual abuse illustrates how this exposure class is expanding across jurisdictions, not just in California. Even within California, the parallel AB 250 revival window for private employers now mirrors the public-entity exposure that AB 218 created, so multi-channel risk managers face overlapping reserve pressure from both statutes.
What this means for your next review
If your district or JPA carries open AB 218 claims, ask your actuary whether the current reserve estimate probability-weights reform scenarios. A “reform passes” scenario with caps and a higher proof standard would discount severity; a “reform fails” scenario would not. The difference between the two could be material on a per-claim basis. Separately, if your JPA’s reinsurer has exited or signaled withdrawal, model the higher retention and confirm that your aggregate IBNR reflects the additional retained layer. The legislature has until late summer to advance a reform bill, and the window for the 2026 session is narrowing.
Sources
- EdSource: New efforts to reform California’s childhood sex abuse law (2026)
- EdSource: California lawmakers weigh reforms to child abuse law (2026)
- CalMatters: California schools face a new budget hit (February 2026)
- Insurance Journal: Decades-old abuse payouts squeeze California school and city budgets (February 2026)
- FCMAT: Childhood Sexual Assault: Fiscal Implications for California Public Agencies (January 2025)