BILL ANALYSIS �
AB 1425
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 1425 (Committee on Insurance) - As Introduced: March 22,
2011
SUBJECT : Life insurance
SUMMARY : Requires regulations adopted by the Insurance
Commissioner (IC) relating to life settlements to be adopted
pursuant to the Administrative Procedure Act (APA).
Specifically, this bill :
1)Repeals the delegation of authority to the IC to adopt
regulations relating to life settlements.
2)Repeals the authorization to adopt those regulations as
emergency regulations.
3)Provides an authorization for the IC to adopt regulations as
reasonably necessary to implement the life settlement law
using the non-emergency procedures required by the APA.
EXISTING LAW :
1)Establishes a comprehensive regulatory structure governing
life settlement transactions.
2)Defines a life settlement generally as a sale of a life
insurance policy by the owner of the policy to a buyer.
3)Provides that the IC may adopt regulations relating to life
settlements pursuant to the emergency regulation procedures.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose . This Committee bill is intended to modify the
delegation to the IC of authority to adopt regulations to
implement the life settlement law. When initially enacted,
the bill was lengthy, and created a new regulatory program.
The authority to adopt regulations and the emergency
regulation procedure were adopted in two separate places in
AB 1425
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the statute. Further, the procedure as enacted authorized use
of the emergency regulation procedure on an ongoing basis.
The Legislative intent was to grant this expedited authority
for the initial round of regulations necessary to implement
the new law. However, the bill did not specify that the
emergency regulation authority was limited to the initial
regulations. This bill adopts standard language on authority
and procedure in the same code section.
2)Prior legislation . SB 98 (Calderon), Statutes 2009, Chapter
343, enacted the comprehensive regulatory program for life
settlements. SB 1242 (Calderon) of 2010 would have made
several changes to SB 98, including the change proposed by
this bill. However, SB 1242 was not taken up in the Assembly
Appropriations Committee after being passed by the Insurance
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None received.
Opposition
None received.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086