BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           76 (Yamada)
          
          Hearing Date:  6/29/2009        Amended: 3/9/2009
          Consultant: Katie Johnson       Policy Vote: B. F. I. 11-0
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          BILL SUMMARY:  AB 76 would extend a $1 fee based on individual  
          life insurance and annuity products worth $15,000 or more issued  
          by insurers until January 1, 2015, that is dedicated to  
          protecting consumers of insurance products and would require the  
          Insurance Commissioner to annually publish a report detailing  
          certain consumer protections.
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                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                                                  
          $1 fee revenueApproximately $1 million - $1.5 million  
          annuallySpecial*

          *Life and Annuity Consumer Protection Fund
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          STAFF COMMENTS: 

          Existing law provides for the regulation of insurance products  
          by the California Department of Insurance (CDI).

          Existing law, AB 2316 (Chan), Chapter 835, Statutes of 2004,  
          establishes the Life and Annuity Consumer Protection Fund. Fund  
          revenues are generated by a $1 fee on insurers based on the  
          number of individual life insurance and annuity products worth  
          $15,000 or more issued annually and the amount of money in the  
          fund is capped at $5 million each year. These funds are then  
          dedicated as follows: 50 percent are distributed within CDI for  
          consumer protection related functions including investigating  
          and prosecuting financial abuse, responding to consumer  
          complaints, and educating consumers on the aspects of life  
          insurance and annuity products; the remaining 50 percent are  
          distributed to district attorneys for investigating and  
          prosecuting individual life insurance and annuity product  










          financial abuse cases. Existing law provides that this fund and  
          fee would cease to exist January 1, 2010.

          This bill would extend the life of this fund and fee until  
          January 1, 2015. Current annual and anticipated ongoing revenues  
          are approximately $1 million - $1.5 million.

          This bill would also require the Insurance Commissioner to  
          provide a report on the department's Web site that would include  
          specified information pertaining to consumer protections within  
          the life insurance and annuity market. Costs to the department  
          to produce this report would be minor and absorbable since CDI  
          currently collects much of the required information.