BILL NUMBER: AB 41	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Coto

                        DECEMBER 1, 2008

   An act to amend Section 926.2 of, and to add Section 926.3 to, the
Insurance Code, relating to insurer investments.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 41, as introduced, Coto. Insurance: community development
investments.
   Existing law requires insurers to provide information biennially
to the Commissioner of Insurance on all its Community Development
Investments and Community Development Infrastructure Investments, as
defined, in California. The commissioner and the Department of
Insurance are required to provide certain information on these
investments to the public, as specified. These provisions are to
remain in effect only until January 1, 2011, and are repealed as of
that date.
   This bill would extend the date for repealing those provisions to
January 1, 2015, and would state that certain insurers could meet the
filing requirements relating to Community Development Investments
through a specified filing. This bill would also require certain
insurers to develop, and file with the commissioner no later than
July 1, 2009, and every 2 years thereafter, a "Community Development
Investment" policy that expresses the insurer's goals for Community
Development Investments during the following 2-year period. The bill
would require the commissioner to establish a link on its Internet
Web site providing public access to each insurer's Community
Development Investment information, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) In 1996, California policymakers and insurance companies
instituted efforts to encourage investments by insurance companies in
urban and economically disadvantaged areas through the establishment
of the California Organized Investment Network (COIN).
   (b) COIN is the first-in-the-nation collaborative effort among
insurance companies, the California Department of Insurance, and
other stakeholders involved with community development investments in
traditionally underserved communities. The mission of COIN is to
provide leadership in increasing the level of insurance industry
capital in safe and sound investments providing fair returns to
investors and social benefits to underserved communities.
   (c) In 2006, the Legislature and the Governor approved Assembly
Bill 925 (Ridley-Thomas) which requires insurers to biennially report
their California community development investments to the Department
of Insurance (DOI). That legislation also requires COIN to provide
insurers with information on why any investments were found not to be
qualified by the Insurance Commissioner (commissioner).
   (d) The commissioner is required to biennially provide information
on the DOI's Internet Web site on the aggregate community
development investments made by insurers. The commissioner is
required to identify the insurers that make investments that are
innovative, responsive to community needs, not routinely provided by
insurers, or have a high degree of positive impact on the economic
welfare of low- or moderate-income individuals, families, or
communities in urban or rural California.
   (e) California admitted insurers invest an estimated three
trillion dollars in various investments. Of this sum, an estimated
eight billion dollars have been invested in community development
efforts during the period 1997 to 2004, inclusive.
   (f) In the business sector, as in government, the adoption of a
policy by the governing board generates momentum in the organization
to strive to achieve the policy. This is especially true when the
policy is combined with a goal and identifies the persons responsible
for achieving the goal.
   (g) A 2007 survey by the DOI found that 54 of 485 responding
insurers have adopted a policy regarding community development
investments. Of these insurers, three reported that they have adopted
comprehensive community development investment policies and eight
insurers have set specific goals for community development
investments. These insurers have significantly increased their
community development investments.
   (h) In light of the minor progress made to date without the
adoption of a company policy, and in recognition that insurers that
adopted a policy have made significant progress in increasing the
amount of community development investments, it is the purpose of
this act to encourage insurers to significantly increase the number
and amount of their community development investments by requiring
the adoption of a company policy.
  SEC. 2.  Section 926.2 of the Insurance Code is amended to read:
   926.2.  (a)  (1)    Each insurer admitted in
California shall provide information biennially to the commissioner
on all  of  its Community Development Investments and
Community Development Infrastructure Investments in California. This
information shall be provided as part of the required filing pursuant
to Section 900 or Section 11131, or through a data call, or by other
means as determined by the commissioner. COIN shall provide insurers
with information on why investments, if any, were found not to be
qualified by the commissioner. 
   (2) Nothing in this subdivision shall preclude an insurer that is
a member of an insurance holding company system as defined in Article
4.7 (commencing with Section 1215) of Chapter 2, from complying with
paragraph (1) through a single filing on behalf of the entire group
of affiliated companies, provided that the data so filed accurately
reflects the investments made by each of the affiliates, and
accurately attributes, by National Association of Insurance
Commissioners (NAIC) number or other identifier required by the
commissioner, which of the investments were made by each affiliated
company.  
   (3) Nothing in this subdivision shall preclude an insurer from
satisfying the requirements of paragraph (1) through a filing made by
a Community Development Financial Institution, provided all of the
following conditions are met:  
   (A) The insurer has no less than a 10 percent ownership interest
in a COIN-certified Community Development Financial Institution.
 
   (B) The insurer makes Community Development Investments in and
through the Community Development Financial Institution.  
   (C) The Community Development Financial Institution accurately
files the information required by paragraph (1) with the commissioner
on behalf of the insurer and accurately attributes, by NAIC number
or other identifier required by the commissioner, which investments,
including the dollar amounts of the investments, were made by each
insurer on whose behalf the Community Development Financial
Institution is reporting. 
   (b) The commissioner shall biennially provide information on the
department's Internet Web site on the aggregate insurer Community
Development Investments and Community Development Infrastructure
Investments. Insurers that make investments that are innovative,
responsive to community needs, not routinely provided by insurers, or
have a high degree of positive impact on the economic welfare of
 low-income   low-  or moderate-income
individuals, families, or communities in urban or rural California
shall be identified.
   (c) The department shall also biennially provide information on
the department's Internet Web site regarding the aggregate amount of
California public debt (including all debt issued by the State of
California or a California  State   state 
or local government agency) purchased by insurers as reported to the
department in their  National Association of Insurance
Commissioners (NAIC)   NAIC  annual statement
filing pursuant to Section 900 or Section 11131.
   (d) The department shall also biennially provide on its Internet
Web site the aggregate amount of identified California investments,
as reported to the NAIC in the annual statement filed pursuant to
Section 900 or Section 11131.
   (e) The first report under this article shall be filed with the
commissioner by May 31, 2007.
   (f) Insurers that did not comply with the voluntary community
investment data call issued by the commissioner in May 2005 shall
provide the information requested therein to the commissioner on or
before February 28, 2007.
   (g) This article shall remain in effect only until January 1,
 2011   2015  , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1,  2011   2015  , deletes or
extends that date. 
   (h) Nothing in this article shall limit the authority of the
commissioner to ask for data concerning community development
investments on a voluntary basis on or after January 1, 2010, if this
article is not extended. 
  SEC. 3.  Section 926.3 is added to the Insurance Code, to read:
   926.3.  (a) It is the policy of the State of California that (1)
insurers should, where practicable, be supportive of Community
Development Investments, and insurers should be encouraged to invest
in prudent community development investments that benefit California
and California's low- and moderate-income communities; (2) every
admitted insurer that writes a substantial amount of insurance in the
state should consider Community Development Investments; and (3) the
California Organized Investment Network is a part of the department,
and has the responsibility to pursue active measures to encourage
community development investing by admitted insurers.
   (b) Each insurer admitted in California that writes premiums in
California equal to or in excess of one hundred million dollars
($100,000,000) annually shall develop, and file with the commissioner
no later than July 1, 2009, and every two years thereafter, a
"Community Development Investment" policy that expresses the insurer'
s goals for Community Development Investments during the current and
following calendar year. These filings shall be public information.
However, the initial policy statement filed with the commissioner
will satisfy the requirement of this subdivision if the insurer's
policy has not changed and the insurer informs the commissioner of
that fact at least once every two years. For purposes of this
subdivision, "policy" means a statement of principle intended to
influence a decision or action.
   (c) The commissioner shall establish a link on its Internet Web
site that provides access to the public of the contents of each
insurer policy statement and the data on Community Development
Investments made by each insurer pursuant to subdivision (b).
  SEC. 4.  Nothing in Article 10.1 (commencing with Section 926.1) of
Chapter 1 of Part 2 of Division 1 of the Insurance Code shall limit
the authority of the Insurance Commissioner to ask for data
concerning Community Development Investments on a voluntary basis on
or after January 1, 2015, if that article is not extended beyond that
date.