BILL NUMBER: AB 41 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 27, 2010
AMENDED IN ASSEMBLY JANUARY 25, 2010
AMENDED IN ASSEMBLY JANUARY 7, 2010
AMENDED IN ASSEMBLY JANUARY 4, 2010
INTRODUCED BY Assembly Member Solorio
( Coauthors: Assembly Members
Coto, Jones, Salas, and Saldana
)
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 amended, Solorio. Insurance: community development
investments.
Existing law requires each admitted insurer to provide information
biennially to the Insurance Commissioner on all of 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are to remain in effect only until January 1, 2011, and are repealed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 instead require each admitted insurer to provide
information, by January 1, 2014, to the commissioner on all of its
community development investments and community development
infrastructure investments. The bill would also require that the
information the commissioner and the department are required to
provide to the public on these investments be done
provided by May 31, 2014.
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, 2011, and every
2 years thereafter, a community development investment
policy statement that expresses the insurer's goals for community
development investments during the following 2-year period
current and following calendar year.
Thereafter, each insurer would be required to biennially review its
policy statement , and if the insurer revises or changes
its policy statement, submit the new policy statement to the
commissioner no later than July 1 of each odd-numbered year .
The bill would require the commissioner to establish a link on
its the department's Internet Web site
providing public access to each insurer's community development
investment information, as specified.
This bill would delete obsolete provisions.
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, by January 1, 2014, to the commissioner on all of its
Community Development Investments and Community Development
Infrastructure Investments 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
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 community development financial
institution .
(B) The insurer makes Community Development Investments
community development investments in and through
the Community Development Financial Institution
community development financial institution .
(C) The Community Development Financial Institution
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 community
development financial institution is reporting.
(b) The commissioner shall, by May 31, 2014, provide information
on the department's Internet Web site on the aggregate insurer
Community Development Investments and Community Development
Infrastructure Investments 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- or moderate-income individuals, families, or communities in
urban or rural California shall be identified.
(c) The department shall also, by May 31, 2014, 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 or local government
agency) purchased by insurers as reported to the department in their
NAIC annual statement filing pursuant to Section 900 or Section
11131.
(d) The department shall also, by May 31, 2014, 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) This article shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
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 community development
investments , and insurers should be encouraged to invest in
prudent Community Development Investments
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
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, 2011, and every two years thereafter, a
"Community Development Investment" policy statement 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 statement has not changed and the insurer informs
the commissioner of that fact at least once every two years. For
purposes of this subdivision,
(b) Each insurer admitted in California
that writes premium 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, 2011, a policy
statement on community development investments that expresses the
insurer's goals for community development investments during the
current and following calendar year. Thereafter, each insurer subject
to this subdivision shall biennially review its policy statement on
community development investments and, if the insurer revises or
changes its policy statement, submit the new policy statement to the
commissioner no later than July 1 of each odd-numbered year. The
initial policy statement filed with the commissioner shall satisfy
the requirement of this subdivision if the insurer's
policy statement has not changed. These filings shall be public
information. For purposes of this subdivision, "policy
statement" means a statement of principle intended to influence a
decision or action. The policy statement may include general goals or
specific investment goals, but is not required to contain specific
investment goals or thresholds.
(c) The commissioner shall establish a link on its
the department's Internet Web site that provides
access to the public of to the public access
to the contents of each insurer policy statement and the data
on Community Development Investments made
community development investments provided 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
community development investments on a voluntary basis on or
after January 1, 2015, if that article is not extended beyond that
date.