BILL ANALYSIS Ó SB 1205 Page 1 Date of Hearing: July 2, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 1205 (Monning) - As Amended: April 3, 2014 Policy Committee: InsuranceVote:13-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill requires an existing California Department of Insurance (CDI) board that develops the education curriculum for agents and brokers to develop or recommend courses of study on commercial earthquake risk management. FISCAL EFFECT Minor costs to CDI to review and approve the curriculum and courses of study recommended by the curriculum board. COMMENTS 1)Purpose . According to the author, there has been little attention paid to commercial earthquake insurance, despite the threat underinsured or uninsured businesses pose to the economy following a major earthquake. This legislation is intended to ensure agents and brokers have access to approved training to fully understand and assist their clients in managing their earthquake risk. 2)Background . The Senate Committee on Insurance held an informational hearing on March 26, 2014 looking at the risks a major earthquake poses to California businesses and the economy. According to the Senate Committee, a major earthquake in the San Francisco Bay Area or in southern California could have an even greater impact on businesses, employees, and payrolls in the area than Hurricane Katrina had in Louisiana and Mississippi. Yet, according to data from the CDI, only about 8.3 percent of California businesses have earthquake insurance. SB 1205 Page 2 The board this bill charges with developing recommendations is an existing entity, appointed by the Insurance Commissioner and authorized to develop the prelicensing and continuing education curriculum for agents and brokers. Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081