BILL ANALYSIS Ó
AB 553
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
553 (Daly) - As Amended April 22, 2015
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| |Judiciary | |10 - 0 |
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Urgency: Yes State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill adopts corporate governance model laws adopted by the
National Association of Insurance Commissioners (NAIC) and
clarifies existing law relating to the oversight of financially
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troubled international insurers
FISCAL EFFECT:
1)Approximately $40,000 annually to the Department of Insurance
for oversight of large, multi-national insurers (Insurance
Fund).
2)Minor costs to collect and review reports (Insurance Fund).
COMMENTS:
1)Purpose. According to the author, this bill adopts the NAIC
model law on corporate governance. The report required by
this bill provides the California Insurance Commissioner with
a summary of an insurer or insurance group's corporate
practices and governance framework. This bill also adopts
changes to the Insurance Holding Company System Regulatory Act
that clarify to other regulators (e.g., international and/or
federal regulators) that the California Department of
Insurance has the authority to participate in or act as the
group-wide supervisor of a large internationally active
insurance group.
2)NAIC Model Laws. The NAIC's primary mission is to promote
uniform practices amongst states in regulating multi-state
insurers. To support this effort, NAIC maintains an insurance
regulator accreditation program and develops uniform standards
known as Model Laws. The Model Laws are intended to provide
inter-jurisdictional uniformity and cooperation among
regulators in a manner that builds in quality control and
allows one jurisdiction to comfortably rely on another
NAIC-accredited jurisdiction because, by statute, the
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regulatory processes and standards applied are substantially
similar.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081