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