BILL NUMBER: AB 41 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 17, 2010
AMENDED IN SENATE JUNE 22, 2010
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are to remain in effect only until January 1, 2011, and are repealed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 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
and community development infrastructure 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, a community
development investment and community development infrastructure
investment policy statement that expresses the insurer's goals for
these investments during the 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 the department's Internet Web
site providing public access to each insurer's community development
investment and community development infrastructure investment
information, as specified.
This bill would delete obsolete provisions.
The bill would incorporate additional changes to Section 926.2 of
the Insurance Code, proposed by AB 1011 of the 2009-10 Regular
Session, to be operative only if both bills are chaptered and become
effective on or before January 1, 2011, and this bill is chaptered
last.
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 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 and
community development infrastructure 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, 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. 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. 2.5. Section 926.2 of the
Insurance Code is amended to read:
926.2. (a) (1) Each insurer admitted in
California shall provide information biennially
information, by January 1, 2014, to the commissioner on
all its Community Development Investments and Community
Development Infrastructure Investments 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 and
community development infrastructure 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
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, qualify as green
investments, 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
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 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
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) 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.
(e) The department shall also biennially provide information on
its Internet Web site regarding the aggregate amount of identified
California insurer investments in green investments.
(g)
(f) 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 community development infrastructure
investments, and insurers should be encouraged to invest in prudent
community development investments and community development
infrastructure 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 community development
infrastructure 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 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 and community development infrastructure
investments that expresses the insurer's goals for these 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 community
development infrastructure 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 the department's
Internet Web site that provides to the public
access to the contents of each insurer
insurer's policy statement and the data on community
development investments and community development infrastructure
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 and community
development infrastructure investments on a voluntary basis on or
after January 1, 2015, if that article is not extended beyond that
date.
SEC. 5. Section 2.5 of this bill incorporates
amendments to Section 926.2 of the Insurance Code proposed by both
this bill and AB 1011. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 2011,
(2) each bill amends Section 926.2 of the Insurance Code, and (3)
this bill is enacted after AB 1011, in which case Section 2 of this
bill shall not become operative.