BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 41
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          Date of Hearing:   January 21, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    AB 41 (Solorio) - As Amended:  January 7, 2010

          Policy Committee:                              InsuranceVote:7-4

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill modifies insurance statutes governing the California  
          Organized Investment Network (COIN) and community development  
          investing, which encourages insurance industry financial  
          commitments in urban and economically disadvantaged areas.  
          Specifically, this bill: 

          1)Extends the sunset on existing biennial reporting requirements  
            of insurers to the California Department of Insurance (CDI)  
            from January 1, 2011 to January 1, 2015. 

          2)Requires insurers who collect $100 million or more in premiums  
            to develop and file a "Community Development Investment"  
            policy statement to influence community development decisions  
            and actions. 

           FISCAL EFFECT  

          One-time fee-supported special fund costs of $175,000 to CDI to  
          collect, maintain, and publish information related to current  
          reporting activity and to publish policy statements on behalf of  
          California's largest insurers. Ongoing fee-supported special  
          fund costs of $50,000. 

           COMMENTS  

           1)Rationale  . This bill increases the requirements imposed on  
            insurers with respect to community development activities and  
            investments. COIN reflects collaboration between CDI,  
            insurance companies, and economic development organizations.  
            This bill serves as follow-up to AB 925 (Ridley-Thomas),  
            Chapter 456, Statutes of 2006, which requires insurers to  








                                                                  AB 41
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            report community development investments to CDI. According to  
            data, only 54 of 485 insurers have adopted a policy related to  
            community investment. This bill extends current law reporting  
            and establishes a policy statement requirement on large  
            insurers to increase the information and feedback about these  
            investments. According to the author and published financial  
            data, up to 120 companies may be subject to the policy  
            statement requirement.

           2)Related Legislation  . AB 1910 (Coto) in 2008 was similar to  
            this bill and was vetoed. The veto message referenced the  
            state budget delay with no specific concerns expressed about  
            the content of the legislation. 

           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081