BILL ANALYSIS �
SENATE INSURANCE COMMITTEE
Senator Ronald Calderon, Chair
AB 1425 (Committee on Insurance)Hearing Date: June 22, 2011
As Amended: May 19, 2011
Fiscal: Yes
Urgency: No
SUMMARY Would standardize the adoption of future regulations
implementing California's life settlement law under standard,
rather than emergency, Administrative Procedures Act procedures.
DIGEST
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 Insurance Commissioner may adopt regulations
reasonably necessary to govern life settlements pursuant to
the emergency regulation procedures.
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
under the Administrative Procedures Act as reasonably
necessary to implement the life settlement law and provides
that authorization shall be prospective only and nothing in
the bill shall be interpreted to interfere with or overrule
regulations adopted prior to the effective date of this act
COMMENTS
AB
1425 (Committee on Insurance), Page 2
Purpose of the bill 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 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.
1. Background and Discussion:
This bill is intended to update SB 98 of the 2009 Session which
established a comprehensive legal and regulatory framework for
the conduct of the life settlement business in California (SB 98
was enacted as Chapter 343 of the Statutes of 2009) It is
intended to modify the SB 98's delegation to the Insurance
Commissioner of authority to adopt regulations related to life
settlement law. As originally adopted, SB 98 constituted a
long, complex bill which created a substantive new regulatory
program.
In SB 98, authority to adopt regulations and an emergency
regulation procedure were adopted in two separate places in the
statute. In addition, SB 98 authorized routine use of
procedures for emergency regulation adoption rather than
standard APA procedures. In 2009, the Legislative intent was to
grant this expedited authority given the importance of the
subject matter and the absence of an effective regulatory
program in California. 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 and provides it should apply prospectively
only and nothing in the bill shall be interpreted to interfere
with or overrule regulations adopted prior to the effective date
of this act.
2. Summary of Arguments in Support:
AB
1425 (Committee on Insurance), Page 3
a. A clean-up to SB 98 of 2009 providing important,
prospective-only guidance pertaining to the future
adoption of regulations pertinent to California's life
settlement law.
3. Summary of Arguments in Opposition:
a. None received
4. Amendments:
a. None
5. Prior and Related Legislation:
a. SB 98 (Calderon), adopted as Chapter 343 of the
Statutes of 2009
b. SB 1242 (Calderon) relating to life settlements.
LIST OF REGISTERED SUPPORT/OPPOSITION
Support
None
Opposition
None
Consultant: Ken Cooley (916) 651-4110