BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2734
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

           AB 2734 (Committee on Insurance) - As Amended:  March 18, 2014 

          Policy Committee:                             InsuranceVote:12-0
                       Revenue and Taxation             Vote: 9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill contains several technical or noncontroversial changes  
          to the Insurance Code.  Specifically, this bill:  

          1)Raises from $5,000 to $20,000 the threshold that triggers an  
            obligation on surplus line brokers and insurers to make their  
            tax payments in quarterly installments. 

          2)Clarifies what constitutes a "California business" for  
            purposes of insurers' duty to file information with the  
            Insurance Commissioner concerning procurement contracts with  
            minority, women, and disabled veteran-owned businesses.

          3)Delays from July 31 to September 30 of each year the date by  
            which the Insurance Commissioner must post the diversity in  
            procurement data on the Department of Insurance (DOI) internet  
            web site.

          4)Changes an annual data call of information relating to private  
            passenger automobile liability and physical damage information  
            to an every-other-year data call.

          5)Allows a nonprofit cooperative assessment association as  
            specified in the Insurance Code to provide its members with  
            limited accidental death benefits, in addition to the loss of  
            wages benefits currently authorized.

           FISCAL EFFECT  

          The surplus line brokers and insurers tax threshold provisions  
          of the bill are expected to result in an annual revenue loss of  








                                                                  AB 2734
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          slightly more than $40,000 due to fewer companies being above  
          the quarterly payment threshold, as well as decreased penalties  
          and interest from late paying entities.

           COMMENTS  

           Purpose  .  As a matter of convenience to the Department of  
          Insurance and to the industries that are governed by the  
          Insurance Code, this bill serves as a vehicle for  
          noncontroversial statutory changes that would be too minor for a  
          stand-alone bill.  

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081