BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1205
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 1205 (Monning) - As Amended:  April 3, 2014 

          Policy Committee:                             InsuranceVote:13-0

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

           SUMMARY  

          This bill requires an existing California Department of  
          Insurance (CDI) board that develops the education curriculum for  
          agents and brokers to develop or recommend courses of study on  
          commercial earthquake risk management.

           FISCAL EFFECT  

          Minor costs to CDI to review and approve the curriculum and  
          courses of study recommended by the curriculum board. 

           COMMENTS  

           1)Purpose  .  According to the author, there has been little  
            attention paid to commercial earthquake insurance, despite the  
            threat underinsured or uninsured businesses pose to the  
            economy following a major earthquake. This legislation is  
            intended to ensure agents and brokers have access to approved  
            training to fully understand and assist their clients in  
            managing their earthquake risk.  

           2)Background  .  The Senate Committee on Insurance held an  
            informational hearing on March 26, 2014 looking at the risks a  
            major earthquake poses to California businesses and the  
            economy. According to the Senate Committee, a major earthquake  
            in the San Francisco Bay Area or in southern California could  
            have an even greater impact on businesses, employees, and  
            payrolls in the area than Hurricane Katrina had in Louisiana  
            and Mississippi. Yet, according to data from the CDI, only  
            about 8.3 percent of California businesses have earthquake  
            insurance. 









                                                                  SB 1205
                                                                  Page  2

            The board this bill charges with developing recommendations is  
            an existing entity, appointed by the Insurance Commissioner  
            and authorized to develop the prelicensing and continuing  
            education curriculum for agents and brokers. 

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