BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2733
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 2733 (Insurance Committee)
          As Amended  May 12, 2014
          2/3 vote. Urgency
           
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          |ASSEMBLY:  |75-0 |(April 24,      |SENATE: |32-0 |(June 26,      |
          |           |     |2014)           |        |     |2014)          |
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           Original Committee Reference:    INS.  

           SUMMARY  :  Repeals the sunset clause on the small business  
          third-party administrator program for voluntary disability  
          programs, and declares that the bill is an urgency measure, to  
          take effect immediately.

           The Senate amendments  adopt minor clarifying and clean-up  
          language suggested by the Employment Development Department.  
           
           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.

           COMMENTS  :  

          1)Purpose.  According to the proponents, the small business  
            third-party administrator program has enabled over 2,100 small  
            businesses employing nearly 37,000 employees to participate in  
            enhanced disability insurance programs that, prior to creation  
            of the program in 2010, were for all practical purposes  
            unavailable to small businesses' employees.  The program was  
            created in 2010, with a sunset clause to enable an evaluation  
            of whether or not the program would operate as intended.   
            According to Applied Underwriters, the program has proven to  
            be a sound way to deliver enhanced benefits to a class of  
            employee previously excluded from benefitting from prior law.

          2)Prior legislation.  AB 2778 (Insurance Committee), Chapter  
            399, Statutes of 2010, established the small business third  
            party administrator program.
           
           There is no opposition on file.
           
          Analysis Prepared by  :    Mark Rakich / INS. / (916) 319-2086 









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