When an AI is reduced to no settlements, perhaps by an unlucky start or perhaps due to war, it's possible for the sovereign to survive but have no way to get back in the game because they lack troops and without a city they cannot make new troops. In fact, Resoln in my current game are in this situation and I can't even gift them a pioneer. 
So I was thinking this. Give the sovereign (or a champion) the ability to found one new city if their last city falls. Once this ability is taken, it can't be taken again by the same faction until it has been used (and therefore is scrubbed from the level-up screen).
It isn't going to help much in the situation where all the faction's armies are being systematically hunted down and destroyed, but it would be great for giving AIs a second chance at starting.