BILL ANALYSIS
AB 76
Page 1
ASSEMBLY THIRD READING
AB 76 (Yamada)
As Amended March 9, 2009
Majority vote
INSURANCE 10-0 APPROPRIATIONS 17-0
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|Ayes:|Coto, Garrick, Blakeslee, |Ayes:|De Leon, Nielsen, |
| |Charles Calderon, Carter, | |Ammiano, Charles |
| |Feuer, Hayashi, Nava, | |Calderon, Davis, Duvall, |
| |Niello, Torres | |Fuentes, Hall, Harkey, |
| | | |Miller, John A. Perez |
| | | |Price, Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson, Krekorian |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Extends the sunset date on a special fund and the $1
assessment on each life insurance and annuity contract sold in
the state, and requires that the Insurance Commissioner (IC)
post specified information on the California Department of
Insurance (CDI) Web site. Specifically, this bill :
1)Extends the sunset date on the Life and Annuity Consumer
Protection Fund (Fund), and on the $1 per life insurance
policy and annuity contract fee that supports the Fund, until
January 1, 2015.
2)Requires the IC to annually post a consolidated report on the
CDI Web site that contains the following information:
a) The number of complaints related to life insurance and
annuity contracts received by the CDI;
b) The number of opened investigations related to these
products;
c) The number of investigations relating to these products
that are referred to or reported by prosecuting agencies;
d) The number of administrative or regulatory cases
relating to these products referred to the CDI legal
AB 76
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division, and the number of legal actions undertaken; and,
e) Descriptions of educational and outreach programs
initiated by the CDI relating to these products.
EXISTING LAW :
1)Creates the Life and Annuity Consumer Protection Fund as a
special account within the Insurance Fund.
2)Authorizes the IC to impose a fee, not to exceed $1, on each
life insurance policy or annuity contract with a value over
$15,000 sold to a resident of California.
3)Specifies how the fee monies may be expended, including a
requirement that 50% of the funds be distributed to local
district attorneys who submit a specified application for the
funds.
4)Provides that the Fund and the fee sunset on January 1, 2010.
FISCAL EFFECT : According to the CDI, the fee generates
approximately $1 million per year. Any costs are minor and
absorbable to the CDI.
COMMENTS :
1)Purpose of the bill. The author introduced this bill at the
request of the Los Angeles District Attorney, one of the local
district attorneys who has applied for and received funding
from the Fund. In order to provide the security of stable
funding, the District Attorney suggests an extension of 5
years. The program was originally created by AB 2316 (Chan),
Chapter 835, Statutes of 2004, and the initial sunset
provision allowed five years. Because the District Attorney
believes the program is a worthwhile law enforcement program
that has proven its value, he believes an additional five
years is warranted.
2)CDI Web site. Representatives of the life insurance industry
have not objected to the funding extension, but have had
concerns with how the CDI was using the funds. As a result,
they negotiated the "sunshine" provisions of the bill,
requiring data to be made conveniently available on the CDI
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Web site. With the ability to easily monitor how the funds
are being used and identify the results, there is broad
support in the industry for the bill.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0001236