BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 396
                                                                  Page  1

          Date of Hearing:   August 19, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    SB 396 (Calderon) - As Amended:  July 9, 2009 

          Policy Committee:                               
          InsuranceVote:10-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill increases the amount of information available in the  
          California Department of Insurance (CDI) annual report about the  
          passing rate for first-time applicants for insurance licenses.  
          Specifically, this bill: 

          1)Requires the Insurance Commissioner (IC) of the California  
            Department of Insurance (CDI) to report through December 2012  
            on the pass rate for first-time applicants for specified  
            licenses including fire and casualty, personal lines,  
            auto-only, life-only, and health agent and/or broker. 

          2)Requires the IC to report through December 2012 on the total  
            number of exams and the mean examination scores for all  
            applicants for specified licenses. 

          3)Requires the IC to determine pass rates by ethnicity/race,  
            gender, and level of education if the pass rate falls below  
            65% for any category of license after January 1, 2011.  
            Requires this information to be included in the next annual  
            report by CDI.

           FISCAL EFFECT  

          One-time fee-supported special fund costs of $30,000 to CDI for  
          database reconfiguration and on-going absorbable costs to CDI to  
          comply with the reporting requirements established by this bill.  


           COMMENTS  

          1)       Rationale  . This bill increases the amount of information  
            available about performance on initial licensing exams for  
            various insurance sales professionals. According to the  





                                                                  SB 396
                                                                  Page  2

            American Council of Life Insurers and (ACLI) and the National  
            Association of Insurance and Financial Advisors (NAIFA)  
            concerns have been growing about the decline in the number of  
            insurance agents licensed in recent decades and the impact of  
            changing demographics on Californian's access to various  
            insurance products. This bill increases the amount of  
            information available about who is testing to be an insurance  
            agent and related performance. This information may provide  
            the groundwork for future efforts in increasing both the  
            number and diversity of insurance agents and brokers. 
           
          2)       Background  . Under current law CDI produces a lengthy  
            annual report that is submitted to the Legislature and  
            governor. This bill increases the specificity of reporting  
            contained in that annual report to identify demographic  
            trends. 
            Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081