BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1426
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                           ASSEMBLY COMMITTEE ON INSURANCE
                                 Jose Solorio, Chair
             AB 1426 (Committee on Insurance) - As Introduced:  March 22, 
                                        2011
           
          SUBJECT  :   Insurance: credit insurance agents and low-cost auto 
          insurance

           SUMMARY :   Repeals an obsolete reporting requirement by the 
          Insurance Commissioner (IC) regarding credit insurance agents, 
          and repeals the requirement to adopt emergency regulations in 
          connection with implementing the low-cost automobile insurance 
          program.  Specifically,  this bill  :

          1)Repeals the obsolete requirement that the IC report by June 
            30, 2004, on the effectiveness of a set of laws regulating 
            credit insurance agents.

          2)Repeals the requirement that the IC adopt emergency 
            regulations in connection with the implementation of the 
            low-cost automobile insurance program.

           EXISTING LAW  :

          1)Requires the IC to report to the Legislature by June 30, 2004, 
            on the effectiveness of a set of laws regulating credit 
            insurance agents.  The set of laws are the ones that establish 
            the licensing requirements to become licensed as a credit 
            insurance agent or endorsee, specifies the authorized lines of 
            insurance, specifies the conditions for the sale of credit 
            insurance, and details prohibited acts.

          2)Requires the IC to adopt emergency regulations in implementing 
            the low-cost automobile insurance program.

           FISCAL EFFECT  :   None.

           COMMENTS  :   

           1)Background  .  Each year the Assembly Insurance Committee 
            introduces a set of committee bills, authored by a majority of 
            the committee Members, to address non-controversial issues.  
            This bill would remove obsolete language from the Insurance 








                                                                  AB 1426
                                                                  Page  2

            Code.

           2)Emergency regulations.   Existing law requires the IC to 
            implement the low-cost automobile insurance program in the 
            County of Los Angeles and the City and County of San Francisco 
            within 60 days of effective date of the law (January 1, 2000). 
             Existing law provides that the implementing regulations shall 
            be adopted as emergency regulations.  Another provision of 
            existing law requires the IC to implement this program in the 
            other counties of the state by means of emergency regulations. 
             Since the low-cost automobile insurance program has been 
            implemented statewide for several years now, the basis for the 
            emergency regulations has passed.

          Emergency regulations provide fewer days of public notice and 
            opportunity to comment.  Also, emergency regulations are not 
            subject to the review process by the Office of Administrative 
            Law as to necessity and consistency with other laws.  Since 
            the low-cost auto insurance program has been implemented 
            statewide for several years, any further regulations should be 
            adopted as regular regulations which require an adequate 
            notice to the public and an appropriate period to comment.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None received.

           Opposition 
           
          None received.
           
          Analysis Prepared by  :    Manny Hernandez / INS. / (916)319-2086