BILL ANALYSIS
AB 2367
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 2367 (Calderon) - As Introduced: February 19, 2010
SUBJECT : Insurance: financial statements
SUMMARY : Requires a notice that the Insurance Commissioner
(IC) is required to provide to insurers concerning financial
statement forms to be in writing.
EXISTING LAW :
1)Requires every insurer admitted (licensed) to transact
insurance in California to file quarterly and annual financial
statements.
2)Provides that the IC shall require each insurer to use the
statement forms and instructions adopted by the National
Association of Insurance Commissioners (NAIC).
3)Requires insurers to complete the forms in conformity with the
NAIC's Accounting Practices and Procedures Manual.
4)Authorizes the IC to make changes from time to time in the
form of the financial statements and method of filing the
reports in order to best acquire a true exhibit of insurers'
financial condition.
5)Requires the IC to notify each insurer of any changes he or
she has made to the NAIC forms.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose . According to the author, the purpose of this bill is
to clarify existing law, which does not specify the method the
IC must use to carry out the statutory mandate to notify
insurers of any changes that have been made to the standard
NAIC forms.
2)Current practice . According to the Department of Insurance
(DOI), it does not send a specific notice to each of the 1400
AB 2367
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admitted insurers specifying the modifications to the NAIC
financial statement forms that the IC has determined to be
appropriate to obtain a true exhibit of insurers' financial
condition. Rather, as part of the DOI's efforts to be as
paperless as possible, the information is posted on the
Department's internet website and is readily available to
insurers.
3)Support . The Personal Insurance Federation supports the bill
as a measure to clarify that insurers are entitled to an
actual notice that there are changes to the standard NAIC
forms. In fact, the insurers have suggested, although the
bill does not require, that the notice ought to be made by the
beginning of the year for which the financial statements will
be filed, so that the insurer can track the necessary
information during the course of the year, or otherwise plan
its financial strategy knowing all of the rules. The author
should consider discussing the notice date issue with the DOI.
4)Electronic notice . The DOI has indicated that it supports
paperless transactions, whenever possible. The author should
discuss with the DOI how to implement a procedure whereby an
electronic "written" notice can be delivered to a designated
person at each insurer.
REGISTERED SUPPORT / OPPOSITION :
Support
Personal Insurance Federation of California
Opposition
None received.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086