BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1395
                                                                  Page  1

          Date of Hearing:   May 1, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

            AB 1395 (Committee on Insurance) - As Amended:  April 2, 2013 

          Policy Committee:                              InsuranceVote:13  
          - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill deletes the requirement that every surplus line broker  
          must make a Surplus Line Tax filing even if the broker has not  
          transacted any business subject to the Surplus Line Tax. In  
          addition, this bill authorizes the Insurance Commissioner to  
          waive or modify filing requirements where no payment is due by  
          means of notice published on the Department of Insurance (DOI)  
          Internet Web site.

           FISCAL EFFECT  

          Costs associated with this legislation should be minor and  
          absorbable within existing Department of Insurance (DOI)  
          resources. 

           COMMENTS  

           1)Purpose  . In recent years, the number of surplus line licenses  
            has dramatically increased.  However, many of these licensees  
            hold the license as a convenience, and frequently do not  
            transact under that license in a given year.  As a result, the  
            volume of "no taxes due" tax filings has dramatically  
            increased.  The bill is designed to eliminate an unnecessary  
            burden on both these licensees and the DOI.

           2)Surplus Line Insurance  . Current law authorizes non-admitted  
            insurance companies (i.e., companies that are not licensed in  
            California) to issue policies when the insurance that the  
            policyholder needs is not available from admitted California  
            insurers. This type of insurance is referred to as surplus  
            line insurance. Only a specially licensed surplus line broker  








                                                                  AB 1395
                                                                  Page  2

            can arrange for the sale of surplus line insurance. 


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081