BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 131
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 131 (Gaines) - As Amended:  June 28, 2011 

          Policy Committee:                              InsuranceVote:11 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill clarifies reporting requirements by surplus lines 
          brokers when two or more brokers are involved in a transaction.  


           FISCAL EFFECT  

          Costs associated with this legislation would be minor and 
          absorbable within the Department of Insurance's (DOI) resources.

           COMMENTS  

           1)Rationale  . According to the author, the bill is intended to 
            clarify reporting requirements when there are multiple surplus 
            lines brokers involved in a particular transaction.  In the 
            case of surplus lines insurance, there is frequently more than 
            one broker involved because the nature of this insurance is 
            often complex and requires many parties to complete.  
            Currently, the law appears to require each surplus lines 
            broker involved to separately report such a transaction to the 
            Insurance Commissioner, as if it were the only broker 
            involved.

           2)Surplus Line Insurance  . Current law authorizes non-admitted 
            insurance companies (i.e., companies that are not licensed in 
            California) to issue policies when the insurance that the 
            policyholder needs is not available from admitted California 
            insurers. This type of insurance is referred to as surplus 
            line insurance. Only a specially licensed surplus line broker 
            can arrange for the sale of surplus line insurance. 









                                                                  SB 131
                                                                  Page  2

           3)Related Legislation  . AB 315 (Solorio; Chapter 83, Statutes of 
            2011) conforms California law applicable to surplus line 
            insurance to mandatory changes included in the federal 
            Nonadmitted and Reinsurance Reform Act provisions of last 
            year's Dodd-Frank Wall Street Reform and Consumer Protection 
            Act.     

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