BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 712
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

             SB 712 (Committee on Insurance) - As Amended:  May 3, 2011 

          Policy Committee:                              InsuranceVote:11 
          - 0 
                        Governmental Organization             14 - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill requires every admitted property and casualty insurer, 
          unless exempt, to annually submit a Statement of Actuarial 
          Opinion with supporting documents and an Actuarial Opinion 
          Summary.  In addition, it exempts from public disclosure, 
          required under the California Public Records Act (CPRA), all 
          actuarial reports, work papers, or opinion summaries submitted 
          in support of the Statement of Actuarial Opinion, and states 
          that such records would not be subject to subpoena or discovery, 
          or be admissible in evidence in any private party civil action.  


           FISCAL EFFECT  

          There are no significant costs associated with this legislation.

           COMMENTS  

           Purpose  . Effective January 1, 2010 the National Association of 
          Insurance Commissioners (NAIC) added a requirement for states to 
          adopt the NAIC Property and Casualty Opinion Model Law.  The 
          accreditation standard for this Model Law requires states to 
          codify annual submission of an actuarial opinion, and annual 
          submission of an actuarial opinion summary. In addition, the 
          actuarial opinion must be provided with the Annual Statement and 
          treated as a public document, and the various documents related 
          to the actuarial report or actuarial opinion summary must be 
          privileged and treated as confidential by law because they 
          contain significant proprietary information. 









                                                                  SB 712
                                                                  Page  2

          Last year, during an interim annual review of the California 
          Department of Insurance, the NAIC found that California had not 
          codified the NAIC Property and Casualty Opinion Model Law.  In 
          order for California to preserve its NAIC accreditation status, 
          the NAIC Property and Casualty Opinion Model Law needs to be 
          codified.  SB 712 fulfills that goal. 


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