BILL NUMBER: SB 131	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 17, 2011
	AMENDED IN SENATE  MAY 3, 2011
	AMENDED IN SENATE  APRIL 13, 2011

INTRODUCED BY   Senator Gaines
   (Principal coauthor: Senator Calderon)

                        JANUARY 27, 2011

   An act to amend Section 1774 of the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 131, as amended, Gaines. Insurance: surplus line brokers:
statement of business transacted.
   Existing law requires, on or before the first day of March of each
year, the surplus line broker to file with the Insurance
Commissioner a sworn statement of all business transacted under his
or her surplus line license during the last preceding calendar year.
"Business done" or "business transacted" under a surplus line broker'
s license means all insurance regarding which that surplus line
broker is required to file a confidential written report with the
commissioner or the commissioner's designee, as provided. Existing
law further provides that if 2 or more persons licensed as surplus
line brokers are involved in placing an insurance policy, only the
one responsible for negotiating, effecting the placement, remitting
the premium to the nonadmitted insurer to its representatives, and
filing the confidential written report is considered transacting
under his or her surplus line broker's license.
   This bill would instead require that when 2 or more persons
licensed as surplus line brokers are involved in placing an insurance
policy  only the one who is responsible for filing the
confidential written report shall be considered transacting business
and  only one licensed surplus line broker shall include the
policy in his or her sworn statement, as specified. 
   The bill would also provide that the surplus line broker who is
required to include the policy in his or her sworn statement is
either the one who is responsible for filing the confidential written
report, or the one who is delegated the responsibility for filing
the report pursuant to a written agreement between those two surplus
line brokers, as provided. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1774 of the Insurance Code is amended to read:
   1774.  (a) On or before the first day of March of each year, the
surplus line broker shall file with the commissioner a sworn
statement of all business transacted under his or her surplus line
license during the last preceding calendar year. That statement shall
contain an account of the business done by the surplus line broker
for the prior year.
   (b) For purposes of this chapter, "business done" or "business
transacted" under a surplus line broker's license means all insurance
regarding which that surplus line broker is required to file a
confidential written report with the commissioner or the commissioner'
s designee pursuant to subdivision (a) of Section 1763. If two or
more persons licensed as surplus line brokers are involved in placing
a policy,  only the one who is responsible for filing the
confidential written report pursuant to subdivision (a) of Section
1763 shall be considered transacting business and  then only one
licensed surplus line broker shall include the policy in his or her
sworn statement. The surplus line broker who is required to include
the policy in his or her own statement is either (1) the one who is
responsible for negotiating, effecting the placement, remitting the
premium to the nonadmitted insurer or its representatives, and filing
the confidential written report pursuant to subdivision (a) of
Section 1763, or (2) the one surplus line broker who is delegated the
responsibility for the filing of the confidential written report
pursuant to subdivision (a) of Section 1763 pursuant to a written
agreement that is (A) by and among  all of  the
surplus line brokers  referenced in (1) and (2)  involved in
the transaction, (B) signed by  all  the surplus
line brokers  referenced in (1) and (2)  involved in the
transaction, and (C) provides by its terms that the agreement shall
be made available to the commissioner or his or her designee, upon
request.
   (c) The date on which the surplus line broker transacting a policy
prepares a bill or invoice for payment of all or part of the
premiums due, shall be considered the date on which that business was
done or transacted, subject to paragraph (d). This date shall be
shown on the face of the bill or invoice and shall be referred to as
the "invoice date."
   (d) (1) The invoice date shall be no more than 60 days after the
policy effective date and no more than 60 days after the insurance
was placed with a nonadmitted insurer, except as provided in
paragraph (2) of this section.
   (2) For purposes of this chapter, the amount of gross premium to
be reported, if premiums are billed and payable in installments,
shall be the amount of the installment premium, provided the amount
and due date of each installment, or the basis for determining each
installment, is identifiable in the policy or an endorsement, and
either of the following conditions is satisfied:
   (A) Installments under the policy are not billed more frequently
than once per month.
   (B) If more than one installment is billed in any month, the
commissioner determines, in his or her discretion, that the
installment billing method used does not unduly burden the
commissioner's ability to accurately determine the amount of premium
paid by the insured.