BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 396|
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VETO
Bill No: SB 396
Author: Calderon (D)
Amended: 7/9/09
Vote: 21
SENATE BANKING, FINANCE, AND INS. COMMITTEE : 11-0, 4/29/09
AYES: Calderon, Cogdill, Correa, Cox, Florez, Harman,
Kehoe, Liu, Lowenthal, Padilla, Wolk
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 36-0, 5/18/09 (Consent)
AYES: Aanestad, Alquist, Ashburn, Benoit, Calderon,
Cogdill, Corbett, Correa, Cox, Denham, DeSaulnier,
Ducheny, Dutton, Hancock, Harman, Hollingsworth, Huff,
Kehoe, Leno, Liu, Lowenthal, Maldonado, Negrete McLeod,
Oropeza, Padilla, Pavley, Runner, Simitian, Steinberg,
Strickland, Walters, Wiggins, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Cedillo, Florez, Romero, Vacancy
SENATE FLOOR : 34-4, 9/8/09
AYES: Alquist, Calderon, Cedillo, Cogdill, Corbett,
Correa, Cox, Denham, DeSaulnier, Ducheny, Dutton, Florez,
Harman, Huff, Kehoe, Leno, Liu, Lowenthal, Maldonado,
Negrete McLeod, Oropeza, Padilla, Pavley, Price, Romero,
Runner, Simitian, Steinberg, Strickland, Wiggins, Wolk,
Wright, Wyland, Yee
NOES: Aanestad, Ashburn, Benoit, Hollingsworth
NO VOTE RECORDED: Hancock, Walters
ASSEMBLY FLOOR : 66-5, 9/3/09 - See last page for vote
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SUBJECT : Insurance Commissioner: reports
SOURCE : Author
DIGEST : This bill requires an existing report on agent
licensure activity (within the Department of Insurances
Annual Report) to include information on the number of
first-time examinees who passed the exam and their overall
pass rate by category of license and also the total number
of examinations and mean examination score for all
examinees by license category, and if the overall pass rate
is less than 65 percent for a specific license category
then the Insurance Commissioner shall calculate the pass
rate of examinees by demographic information including
ethnicity/race, gender, and level of education.
Assembly Amendments provide if the overall pass rate is
less than 65 percent for a specific license category then
the Insurance Commissioner shall calculate the pass rate of
examinees by demographic information including
ethnicity/race, gender, and level of education.
ANALYSIS :
Existing Law
1. The Insurance Commissioner is required, on or before the
first day of August each year, to submit an Annual
Report to the Governor, the Legislature, and to the
Senate and Assembly committees with jurisdiction over
insurance that reports on the activities of that office
and which shows, generally, the condition of the
insurance business and interests in this state.
2. Effective 2008, California began issuing three new
classes of insurance agent licenses. The new license
classes are (a) a limited lines auto-only agent license,
(b) a life-only agent license, and (c) an accident and
health agent license.
3. These three new limited classes of license are subject
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to licensure and continuing education requirements
appropriate to the limited scope of the license, with
the aim of facilitating entry of qualified personnel
into the agency profession to better ensure that the
insurance needs of Californians are met.
4. To facilitate monitoring the results of this revised
approach to licensing, the Insurance Commissioner, for a
five-year period, is required to include in that
office's Annual Report information for the previous
calendar year summarizing:
A. The total number of applications filed for a fire
and casualty broker-agent license, a personal lines
broker-agent license, a limited lines auto-only agent
license, a life-only agent license, and an accident
and health agent license.
B. The total number of licensees issued a fire and
casualty license, a personal lines license, a limited
lines automobile license, a life-only license, and an
accident and health license.
C. The total number of licensees with both a
life-only agent license and an accident and health
agent license.
This bill:
1. Requires that the Insurance Commissioner's Annual Report
include information on the overall pass rate for first
time examinees, for the following classes of applicants:
(a) fire and casualty broker-agent license, (b)
personal lines broker-agent license, (c) auto-only agent
license, (d) life-only agent license, and (e) accident
and health agent license.
2. Requires the report to include the total number of
examinations administered and the mean examination score
of all examinees for each of the license categories
reported upon.
3. Provides that if the overall pass rate for any category
of license noted in #1A above, is less than 65 percent,
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then the Insurance Commissioner shall calculate, for
that category of license, based on demographic
information voluntarily provided by applicants, the pass
rate of examinees by each of the following:
ethnicity/race, gender, and level of education.
4. Requires the Insurance Commissioner to include the
demographic information noted in #2 above, in the next
Department of Insurance annual report to the Governor
and Legislature.
Background
The American Council of Life Insurers and the National
Association of Insurance and Financial Advisors are
embarking on a multi-faceted project to improve the way in
which the states test and license life insurance agents.
They have concluded that comprehensive reform of the life
agent testing and licensing processes are necessary to
attract new entrants to the field of career life agent, and
to grow delivery of needed life and income protection
products to the middle market.
Prior Legislation
AB 720 (De Leon) and AB 797 (Coto), 2007-08 Session,
established the limited lines which are the subject of this
bill, including the five-year long reporting process for
monitoring licensing activity in the affected lines which
this bill modifies.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 9/4/09)
American Council of Life Insurers
Association of California Life and Health Insurance
Companies
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 396 without my signature.
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This bill is unnecessary. The Insurance Commissioner
has the ability to report the information required in
this bill under current law.
For this reason, I am unable to sign this bill."
ASSEMBLY FLOOR :
AYES: Adams, Anderson, Arambula, Beall, Bill Berryhill,
Tom Berryhill, Block, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Cook, Coto, De La
Torre, De Leon, Duvall, Emmerson, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Fuller, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hayashi, Hernandez, Hill,
Huber, Huffman, Jones, Krekorian, Lieu, Bonnie Lowenthal,
Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, John A. Perez, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada
NOES: Blakeslee, Harkey, Jeffries, Knight, Logue
NO VOTE RECORDED: Ammiano, Chesbro, Conway, Davis, DeVore,
Furutani, Hall, Bass, Vacancy
JJA:mw 1/7/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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