BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1425|
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THIRD READING
Bill No: AB 1425
Author: Assembly Insurance Committee
Amended: 8/31/11 in Senate
Vote: 21
SENATE INSURANCE COMMITTEE : 9-0, 6/22/11
AYES: Calderon, Gaines, Anderson, Corbett, Correa, Lieu,
Lowenthal, Price, Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/26/11 (Consent) - See last page
for vote
SUBJECT : Life insurance
SOURCE : Author
DIGEST : This bill standardizes the adoption of future
regulations implementing Californias life settlement law
under standard, rather than emergency, Administrative
Procedures Act procedures, repeals an obsolete reporting
requirement by the Insurance Commissioner regarding credit
insurance agents, and repeals the requirement to adopt
emergency regulations in connection with implementing the
low-cost automobile insurance program.
Senate Floor Amendments of 8/31/11 specify application of a
mandatory disclosure under current law to sales of workers
compensation insurance.
CONTINUED
AB 1425
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Senate Floor Amendments of 8/24/11 add the contents of AB
1426 (Assembly Insurance Committee) to this bill. AB 1426
passed the Senate (33-0) on Consent.
ANALYSIS :
Existing law:
1. Establishes a comprehensive regulatory structure
governing life settlement transactions.
2. Defines a life settlement generally as a sale of a life
insurance policy by the owner of the policy to a buyer.
3. Provides that the Insurance Commissioner (IC) may adopt
regulations reasonably necessary to govern life
settlements pursuant to the emergency regulation
procedures.
This bill:
1. Repeals the delegation of authority to the IC to adopt
regulations relating to life settlements.
2. Repeals the authorization to adopt those regulations as
emergency regulations.
3. Provides an authorization for the IC to adopt
regulations under the Administrative Procedures Act as
reasonably necessary to implement the life settlement
law and provides that authorization shall be prospective
only and nothing in this bill shall be interpreted to
interfere with or overrule regulations adopted prior to
the effective date of this act.
4. Repeals the obsolete requirement that the IC report by
June 30, 2004, on the effectiveness of a set of laws
regulating credit insurance agents.
5. Repeals the requirement that the IC adopt emergency
regulations in connection with the implementation of the
low-cost automobile insurance program.
AB 1425
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6. Specifies that a workers' compensation insurer may
comply with recently enacted requirements on notice of
return of premium if other than pro rata by providing
the disclosure with the quote accompanying the offer of
insurance rather than at other times.
Background
This bill is intended to update SB 98 (Calderon), Chapter
343, Statutes of 2009, which established a comprehensive
legal and regulatory framework for the conduct of the life
settlement business in California. This bill is intended
to modify the SB 98's delegation to the IC of authority to
adopt regulations related to life settlement law. As
originally adopted, SB 98 constitutes a long, complex bill
which created a substantive new regulatory program.
In SB 98, authority to adopt regulations and an emergency
regulation procedure were adopted in two separate places in
the statute. In addition, SB 98 authorizes routine use of
procedures for emergency regulation adoption rather than
standard Administrative Procedures Act procedures. In
2009, the Legislative intent was to grant this expedited
authority given the importance of the subject matter and
the absence of an effective regulatory program in
California. However, the bill did not specify that the
emergency regulation authority was limited to the initial
regulations.
This bill adopts standard language on authority and
procedure in the same code section and provides it should
apply prospectively only and nothing in this bill shall be
interpreted to interfere with or overrule regulations
adopted prior to the effective date of this act.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 75-0, 5/26/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Carter,
AB 1425
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Chesbro, Conway, Cook, Dickinson, Donnelly, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Campos, Cedillo, Davis, Gorell, Jones
JJA:kc 9/1/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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