Amended in Assembly March 19, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2128

Introduced by Assembly Member Gordon

February 20, 2014

An act to amend begin delete Section end delete begin insert Sections end insert 926.2 begin insert and 12939.2 end insert of the Insurance Code, relating to insurer investments.

LEGISLATIVE COUNSEL’S DIGEST

AB 2128, as amended, Gordon. Insurer investments: community development.

Existing law requires each admitted insurer to provide information by January 1, 2014, to the Insurance Commissioner on all of its community development investments and community development infrastructure investments begin delete , as defined, end delete in California. begin insert Community development investments are investments where all or a portion of the investment has as its primary purpose community development for, or that directly benefits, California low- or moderate-income individuals, families, or communities, and includes, but is not limited to, investments in California in or through the California Organized Investment Network (COIN), certified community development financial institutions (CDFIs), and investments made pursuant to the requirements of federal, state, or local community development investment programs or community development investment tax incentive programs, including green investments, if these investments directly benefit low- or moderate-income individuals, families, and communities and are consistent with applicable provisions. end insert The commissioner and the Department of Insurance are required to provide certain information on begin delete these end delete begin insert community development investments and community development infrastructure end insert investments to the public, as specified, by May 31, 2014, and biennally with regard to green investments. These provisions are to remain in effect only until January 1, 2015, and are repealed as of that date.

This bill would extend the repeal date to January 1, 2020.

begin insert

Existing law requires the department, COIN, or any successor thereof, to require the CDFIs receiving specified tax credit investments to submit reports to the department, COIN, or any successor thereof, on their use of the program. Existing law authorizes the commissioner to establish and appoint a California Organized Investment Network Advisory Board. The term of each board member is 2 years and is staggered as provided. The board has certain powers and duties, including, but not limited to, advising COIN, or any successor thereof, on the best methods to increase the level of insurance industry capital in safe and sound investments while providing fair returns to investors and social benefits to underserved communities, meeting quarterly or as deemed necessary by the commissioner, and recommending programmatic guidelines, but not specific allocations of the tax credit amount, to the COIN program. The provisions regarding the board are in effect only until December 1, 2015, and are repealed as of that date.

end insert begin insert

This bill would authorize the commissioner, in his or her discretion, to extend or reduce a board member’s 2-year term, and would delete the staggered terms requirement. The bill would delete the quarterly meeting requirement, and would instead require a minimum of 3 or more meetings per year. The bill would also extend the repeal date to January 1, 2020.

end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 926.2 of the Insurance Code is amended
to read:

926.2.  

(a) (1) Each insurer admitted in California shall provide
information, by January 1, 2014, to the commissioner on all of its
community development investments and community development
infrastructure investments in California. This information shall be
provided as part of the required filing pursuant to Section 900 or
Section 11131, or through a data call, or by other means as
determined by the commissioner. COIN shall provide insurers
with information on why investments, if any, were found not to
be qualified by the commissioner.

(2) Nothing in this subdivision shall preclude an insurer that is
a member of an insurance holding company system, as defined in
Article 4.7 (commencing with Section 1215) of Chapter 2, from
complying with paragraph (1) through a single filing on behalf of
the entire group of affiliated companies, provided that the data so
filed accurately reflects the investments made by each of the
affiliates, and accurately attributes, by National Association of
Insurance Commissioners (NAIC) number or other identifier
required by the commissioner, which of the investments were made
by each affiliated company.

(3) This subdivision shall not preclude an insurer from satisfying
the requirements of paragraph (1) through a filing made by a
community development financial institution, provided all of the
following conditions are met:

(A) The insurer has no less than a 10 percent ownership interest
in a COIN-certified community development financial institution.

(B) The insurer makes community development investments
and community development infrastructure investments in and
through the community development financial institution.

(C) The community development financial institution accurately
files the information required by paragraph (1) with the
commissioner on behalf of the insurer and accurately attributes,
by NAIC number or other identifier required by the commissioner,
which investments, including the dollar amounts of the investments,
were made by each insurer on whose behalf the community
development financial institution is reporting.

(b) The commissioner shall, by May 31, 2014, provide
information on the department’s Internet Web site on the aggregate
insurer community development investments and community
development infrastructure investments. Insurers that make
investments that are innovative, responsive to community needs,
not routinely provided by insurers, qualify as green investments,
or have a high degree of positive impact on the economic welfare
of low- or moderate-income individuals, families, or communities
in urban or rural California shall be identified.

(c) The department shall also, by May 31, 2014, provide
information on the department’s Internet Web site regarding the
aggregate amount of California public debt (including all debt
issued by the State of California or a California state or local
government agency) purchased by insurers as reported to the
department in their NAIC annual statement filing pursuant to
Section 900 or Section 11131.

(d) The department shall also, by May 31, 2014, provide on its
Internet Web site the aggregate amount of identified California
investments, as reported to the NAIC in the annual statement filed
pursuant to Section 900 or Section 11131.

(e) The department shall also biennially provide information
on its Internet Web site regarding the aggregate amount of
identified California insurer investments in green investments.

(f) This article shall remain in effect only until January 1, 2020,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2020, deletes or extends that date.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 12939.2 of the end insert begin insert Insurance Code end insert begin insert is amended to
read: end insert

12939.2.  

(a) The commissioner may establish and appoint a
California Organized Investment Network Advisory Board.

(b) For purposes of this section, all of the following shall apply:

(1) “Commissioner” means the Insurance Commissioner of this
state.

(2) “Board” means the California Organized Investment
Network Advisory Board.

(3) “Licensed attorney” means an attorney who resides in this
state who has successfully passed the California bar examination
and has been admitted to practice in this state or has otherwise
been licensed to practice law in this state by the State Bar of
California.

(c) The board shall include the commissioner, or his or her
designee, three executives in the insurance investment industry,
and one volunteer from each of the following categories:

(1) A licensed attorney practicing insurance law.

(2) A member of the public, appointed by the Speaker of the
Assembly.

(3) A member of the public, appointed by the Senate Committee
on Rules.

(4) A member of a consumer advocacy group.

(5) An affordable housing practitioner.

(6) A local economic development practitioner.

(7) A member of a financial institution or a community
development financial institution.

(8) A representative with experience seeking investments for
low- to moderate-income or rural communities.

(d) The board shall elect, from among its members, a chair.

(e) The term of each member shall be for two years begin delete . Staggered
terms shall be established by drawing lots at the first meeting of
the advisory board so that a simple majority of the members shall
initially serve a two-year term, and the remainder initially a
one-year term. end delete begin insert and may be extended or reduced at the discretion
of the commissioner. end insert

(f) The board shall have all of the following powers and duties:

(1) To advise the California Organized Investment Network, or
any successor thereof, on the best methods to increase the level of
insurance industry capital in safe and sound investments while
providing fair returns to investors and social benefits to
underserved communities.

(2) To meet begin delete quarterly, end delete begin insert a minimum of three or more times per
year, end insert or as deemed necessary by the commissioner.

(3) To facilitate contacts among executives at insurance
companies, community-based organizations, and community
development financial institutions.

(4) To recommend programmatic guidelines, but not specific
allocations of the tax credit amount, to the California Organized
Investment Network program.

(g) The members of the board shall not receive compensation
from the state for their services under this section but, when called
to attend a meeting of the board, may be reimbursed for their actual
and necessary expenses incurred in connection with the meeting.

begin delete

(h) This section shall remain in effect only until December 1,
2015, and as of that date is repealed.

end delete begin insert

(h) This section shall remain in effect only until January 1, 2020,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2020, deletes or extends that date.

end insert