The Foster Family Agency Accountability Act (AB 2496)

The California foster family system is on the verge of collapse.

The Foster Family Agency Accountability Act (AB 2496) is necessary to avoid a shutdown of California’s foster family agencies.

A shutdown would endanger thousands of foster children.

Child holding a paper doll family

Summary

Background

There are nearly 45,000 children and youths in the California foster care system, the vast majority of whom have been separated from their parents due to neglect or abuse.

Today, approximately 9,000 of those children are placed in resource family homes supported by nonprofit foster family agencies (FFAs).

California counties rely on and contract with FFAs to recruit, approve, train, and support these resource parents, thereby reducing the number of children in congregate care.

Working with foster children exposes FFAs to the risk of large jury verdicts. FFAs are increasingly being held responsible for the bad acts of others and are on the verge of becoming uninsurable. Without insurance, FFAs would not be able to serve children in thousands of safe and stable family settings across the state.

The Problem

Runaway verdicts that punish nonprofit FFAs for the unforeseeable actions of others threaten the health and safety of the 9,000 children that rely on FFAs for a safe place to live.

Most insurers have left or are leaving the market. A single nonprofit risk pool, Nonprofits Insurance Alliance of California (NIAC), now insures approximately 90% of the FFAs operating in California.

However, NIAC is no longer accepting new FFA business and has announced its intention to no longer renew FFA insurance policies unless legislation is passed that ensures that FFAs will not be held responsible for matters over which they have no control.

This elimination of liability insurance would cause a collapse of California’s FFA system. Without insurance, FFAs would be required to return foster children to congregate care.

The Solution

To address this problem, AB 2496 is needed to ensure that:

  1. FFAs are not held responsible for unforeseeable harms
  2. FFAs that substantially meet their responsibilities under state licensing laws may not be held accountable to a different standard by the courts
  3. FFAs are not held responsible for the negligence of others
  4. FFAs are given sufficient facts and time to evaluate claims made against them

Important:

AB 2496 does nothing to absolve FFAs from the consequences of their own negligence.

AB 2496 protects children by making sure that responsible parties are held accountable.

Support:

On July 2, 2024, the Senate Judiciary Committee passed AB 2496 with a unanimous vote of 11-0 in favor, however, it was amended in a manner that does not allow FFAs to be insurable.

The Legislature will now break for summer recess, which gives us time to work with the various stakeholders to continue towards a resolution.

FAQ

What are FFAs, and what are their requirements to carry insurance?

FFAs are nonprofit organizations licensed by the Community Care Licensing Division of the California State Department of Social Services to engage in the recruiting, certifying, and training of, and providing professional support to, resource parent(s), or in finding homes for placement of children for temporary or permanent care who require that level of care as an alternative to a group home.

In their contracts with FFAs, counties require FFAs to carry insurance.

Will AB 2496 harm foster children?

Under AB 2496, Foster Family Agencies (FFAs) retain liability for harm to foster children caused by the FFA’s, its employees, volunteers, or contractors. AB 2496 ensures the FFAs remain insurable, so in the event a foster child is harmed by the negligence of the FFA, the foster child can obtain recovery from the FFA’s private insurance carrier through the legal system.

Without AB 2496 there will be no private market to insure FFAs and thus they will cease to operate thereby throwing the foster care system into chaos within this calendar year.

Does AB 2496 reduce tort liability for FFAs?

No, lawsuits can still be brought against FFAs for tortious acts of the FFA, its employees, volunteers, or contractors. AB 2496 would focus the court’s attention on the acts of the particular FFA, as opposed to a general class.

Does AB 2496 reduce County liability for harm to Foster Children?

Counties retain liability for any harm to foster children caused by county employees. What AB 2496 does is to prohibit counties from contractually transferring their legal liability for any wrongful actions of county employees to FFAs. This will motivate counties to proactively mitigate risk related to its own administration of supports to foster children.

Does AB 2496 eliminate all harm that may come to children in Foster Care System?

Resource parents remain liable for any harm to foster children caused by the resource parents, and they are insured by the state through the Foster Family Home and Small Family Home (FSH) Insurance Fund.

Does AB 2496 eliminate all harm that may come to children in the Foster Care System?

No, children are placed in foster care due to either abuse or neglect in the foster child’s home. These children have often been exposed to many traumas in their communities: poverty, violence, addiction, neglect, abuse or challenges caused by physical or mental health of themselves or their families.

Unfortunately, these risks may still exist in the communities where foster children are placed and cannot all be abated by placing a child in foster care.

Why does AB 2496 change the process for responding to plaintiff settlement offers? 

Currently, FFAs and their insurance carriers must respond to a plaintiff attorney’s settlement demand without having sufficient time to understand the facts of the case. AB 2496 requires the attorneys litigating a claim against a FFA to use a similar process mandated by law for the parties to respond to settlement demands in general liability and auto accident cases. Moreover, the attorneys for all parties would need to meet to discuss a potential settlement.