BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 690
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 690 (Solorio) - As Amended:  April 25, 2011 

          Policy Committee:                              InsuranceVote:11 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill updates the laws governing the sale of insurance in 
          connection with portable electronic devices and their 
          accessories and associated services. Specifically, this bill: 

          1)Updates state statute to expand the current law governing 
            "communications devices" to include insurance for all 
            "portable electronics." 

          2)Authorizes the Insurance Commissioner (IC) to issue a portable 
            electronics insurance agent license that authorizes the 
            licensee and its employees and authorized representatives to 
            sell insurance in connection with, and incidental to, the sale 
            of "portable electronics" or the sale or provision of 
            accessories or services related to the use of portable 
            electronics.

          3)Requires vendors to clearly disclose to a customer the fact 
            that a charge for insurance coverage has been included in the 
            costs associated with the purchase or lease of a portable 
            electronic device. 

          4)Prohibits a portable electronics insurance agent from paying 
            an employee or authorized representative any compensation, 
            fee, or commission based primarily on the number of customers 
            electing coverage under the portable electronics insurance 
            agent's license.  

           FISCAL EFFECT 

          Cost for the Department of Insurance would be minor and 








                                                                  AB 690
                                                                  Page  2

          absorbable within existing resources.

           COMMENTS  

           1)Rationale  . This bill is designed to update current law to keep 
            pace with the changes in wireless technology that have come 
            about since the original implementing legislation was passed 
            in 2002.

          2)Related Legislation  . AB 2856 (Chaves; Chapter 437, Statutes of 
            2002) created a regulatory framework for the sale of 
            communications equipment insurance in California.  As enacted, 
            this law provides the Insurance Commissioner with the 
            authority to issue to retail vendors selling communications 
            equipment the limited authority to sell insurance covering 
            communications equipment to its customers.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081