BILL NUMBER: AB 705	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Blumenfield

                        FEBRUARY 17, 2011

   An act to amend Section 1241.1 of the Insurance Code, relating to
insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 705, as introduced, Blumenfield. Insurance: risk retention.
   Existing law prohibits domestic insurers from acquiring foreign
investments from or located in foreign jurisdictions designated as
state sponsors of terrorism by the United States Secretary of State.
   This bill would require that an admitted foreign insurer's foreign
investments, located in foreign jurisdictions designated as state
sponsors of terrorism by the United States Secretary of State, be
disallowed and treated as nonadmitted assets on the financial
statements of the admitted foreign insurer filed with the Insurance
Commissioner. The bill would also require that if a jurisdiction was
not so designated when an investment was made, the investment be
disallowed and treated as nonadmitted.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1241.1 of the Insurance Code is amended to
read:
   1241.1.  (a)  No   A  domestic insurer
shall  not  acquire any investment  (1)  respecting
a foreign jurisdiction,  (2) supporting economic or political
activity in, or military activity by or on behalf of, that foreign
jurisdiction,  or  any investment   (3)
 denominated in the currency of that foreign jurisdiction, if
that jurisdiction is designated as a state sponsor of terrorism by
the United States Secretary of State pursuant to Section 6(j) of the
Export Administration Act, Section 40 of the Arms Export Control Act,
and Section 620A of the Foreign Assistance Act.  If any
investment made pursuant to Section 1241 later becomes prohibited by
this section, that investment shall not be retained as an investment
made pursuant to this code.
   (b)  If any investment made pursuant to Section 1241 later
becomes prohibited by this section, that investment shall not be
retained as an investment made pursuant to this code.  
Any   investment of an admitted foreign insurer (1)
respecting a foreign jurisdiction, (2) supporting economic or
political activity in, or military activity by or on behalf of, that
foreign jurisdiction, or (3) denominated in the currency of that
foreign jurisdiction, if that jurisdiction is designated as a state
sponsor of terrorism by the United States Secretary of State pursuant
to Section 6(j) of the Export Administration Act, Section 40 of the
Arms Export Control Act, and Section 620A of the Foreign Assistance
Act, shall be disallowed and treated as a nonadmitted asset on the
financial statements of the foreign insurer filed with the commiss
  ioner. If a jurisdiction was not so designated when an
investment was made, the investment shall be disallowed and treated
as nonadmitted on statements filed with the commissioner after the
designation is made.