BILL ANALYSIS AB 41 Page 1 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 Page 2 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