SB 696 — Insurance: principle-based valuation.

Summary

Existing law governs the issuance of life and disability insurance and authorizes the Insurance Commissioner to regulate those insurers. Existing law requires every life and disability insurer doing business in this state to annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and comply with applicable state law. Among other things, existing law requires insurers to calculate the minimum standard for the valuation of those policies and contracts using specified mortality tables approved by the commissioner, sets forth the applicable interest rates, and establishes the reserve requirements for various types of life and disability policies and contracts. This bill would explicitly refer to the body of laws imposing those requirements, as specified, as the Standard Valuation Law. The bill would require the commissioner and companies engaging in specified activities relating to the business of life insurance to incorporate the methodology employed by a specified manual of valuation instructions adopted by the National Association of Insurance Commissioners in making determinations relating to reserve requirements and the minimum standard of valuation for policies and contracts, as specified. The bill would require a company to establish reserves using a principle-based valuation that meets specified conditions in the valuation manual, including quantifying the benefits, guarantees, and funding associated with the contracts, and would require the company to develop and file with the commissioner, upon request, a principle-based valuation report. The bill would require a company to submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual. This bill would authorize the commissioner to impose an annual assessment on each insurance company, based on the company's gross annual life insurance premium written by the insurer in California during the immediately preceding year, thereby imposing a tax. The bill would exempt certain information submitted by a company to the commissioner from disclosure pursuant to the California Public Records Act and would provide that it is not subject to subpoena or discovery or admissible in evidence in any private civil action. The bill would also authorize the commissioner to hire and assign Department of Insurance staff, and retain nondepartmental actuaries and other consultants, to assist the commissioner in implementing principle-based valuation. This bill would provide that the valuation manual would not be operative until the commissioner certifies that adequate funding has been appropriated by the Legislature, and all other necessary resources, including, but not limited to, adequate staff, are available and sufficient to enable the commissioner to carry out the duties required by specified provisions of the bill. The bill would require the commissioner to make that certification by submitting a letter to the Chairs of the Assembly Committee on Insurance and the Senate Committee on Insurance stating that the funding and other necessary resources are available and sufficient to carry out those duties. The bill would also require the commissioner to post a notice on the department's Internet Web site immediately after submitting that certification letter stating that the certification letter has been submitted and that the provisions of the valuation manual are in effect. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

Bill Text

• Chaptered 10/08/15 - Chaptered Current pdf October 08, 2015
• Enrolled 09/10/15 - Enrolled pdf September 10, 2015
• Amended 08/28/15 - Amended Assembly pdf August 28, 2015
• Amended 07/16/15 - Amended Assembly pdf July 16, 2015
• Amended 07/02/15 - Amended Assembly pdf July 02, 2015
• Amended 06/29/15 - Amended Assembly pdf June 29, 2015
• Amended 05/05/15 - Amended Senate pdf May 05, 2015
• Amended 04/14/15 - Amended Senate pdf April 14, 2015
• Introduced 02/27/15 - Introduced pdf February 27, 2015
• SB696 View text html

Action History

1. October 08, 2015

   Chaptered by Secretary of State. Chapter 658, Statutes of 2015.

2. October 08, 2015

   Approved by the Governor.

3. September 15, 2015

   Enrolled and presented to the Governor at 9:30 a.m.

4. September 10, 2015

   Assembly amendments concurred in. (Ayes 39. Noes 0. Page 2670.) Ordered to engrossing and enrolling.

5. September 08, 2015

   In Senate. Concurrence in Assembly amendments pending.

6. September 08, 2015

   Read third time. Passed. (Ayes 78. Noes 0. Page 2962.) Ordered to the Senate.

7. August 31, 2015

   Read second time. Ordered to third reading.

8. August 28, 2015

   Read second time and amended. Ordered to second reading.

9. August 28, 2015

   From committee: Do pass as amended. (Ayes 17. Noes 0.) (August 27).

10. August 19, 2015

    August 19 set for first hearing. Placed on APPR. suspense file.

11. July 16, 2015

    Read second time and amended. Re-referred to Com. on APPR.

12. July 15, 2015

    From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (July 14).

13. July 08, 2015

    From committee: Do pass and re-refer to Com. on JUD. (Ayes 13. Noes 0.) (July 8). Re-referred to Com. on JUD.

14. July 02, 2015

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS.

15. June 29, 2015

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS.

16. June 18, 2015

    Referred to Coms. on INS. and JUD.

17. June 02, 2015

    In Assembly. Read first time. Held at Desk.

18. June 01, 2015

    Read third time. Passed. (Ayes 38. Noes 1. Page 1210.) Ordered to the Assembly.

19. May 28, 2015

    Read second time. Ordered to third reading.

20. May 28, 2015

    From committee: Do pass. (Ayes 6. Noes 0. Page 1159.) (May 28).

21. May 23, 2015

    Set for hearing May 28.

22. May 18, 2015

    May 18 hearing: Placed on APPR. suspense file.

23. May 08, 2015

    Set for hearing May 18.

24. May 05, 2015

    Read second time and amended. Re-referred to Com. on APPR.

25. May 04, 2015

    From committee: Do pass as amended and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 6. Noes 0. Page 820.) (April 28).

26. April 23, 2015

    Set for hearing April 28.

27. April 22, 2015

    From committee: Do pass and re-refer to Com. on JUD. (Ayes 7. Noes 0. Page 727.) (April 22). Re-referred to Com. on JUD.

28. April 14, 2015

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on INS.

29. March 27, 2015

    Set for hearing April 22.

30. March 19, 2015

    Referred to Coms. on INS. and JUD.

31. March 02, 2015

    Read first time.

32. March 02, 2015

    From printer. May be acted upon on or after April 1.

33. February 27, 2015

    Introduced. To Com. on RLS. for assignment. To print.

Sponsors

• Roth · Primary

Votes

Subjects