AB 553 — Insurance: corporate governance: insurance holding companies.

Summary

(1) Existing law regulates the business of insurance, including, but not limited to, requiring that each domestic, foreign, and alien insurer doing business in this state annually, on or before the first day of March of each year, file with the National Association of Insurance Commissioners a copy of its annual statement convention blank, along with any additional filings as prescribed by the Insurance Commissioner for the preceding year. The California Public Records Act requires state and local agencies to make their records available for public inspection and to make copies available upon request and payment of a fee unless the records are exempt from disclosure. This bill would encourage an insurer or insurance group of which the insurer is a member, to, no later than June 1 of each calendar year, submit to the commissioner a Corporate Governance Annual Disclosure (CGAD) that contains specified information relating to corporate governance structure, policies, and practices. The bill would provide, with exceptions, that the documents, materials, or other information in the possession or control of the Department of Insurance that are obtained by, created by, or disclosed to the commissioner or any other person pursuant to these provisions are confidential and privileged, are not subject to disclosure by the commissioner pursuant to the California Public Records Act, are not subject to subpoena, and are not subject to discovery from the commissioner or admissible in evidence in any civil action if obtained from the commissioner, as specified. The bill would make related findings on the confidentiality of these records. The bill would provide that an insurer who fails, without just cause, to timely file the CGAD as required by these provisions would be subject to specified late filing fees. (2) The Insurance Holding Company System Regulatory Act, requires each insurer that is authorized to do business in this state and that is a member of an insurance holding company system to register with the commissioner and to file a registration statement containing specified information, including the capital structure and general financial condition of the insurer and specified transactions between the insurer and its affiliates. The act prohibits a person from making a tender offer for, or a request or invitation for tenders of, or from entering into an agreement to exchange securities for or acquire in the open market, any voting security, or any security convertible into a voting security, of a domestic insurer or of any other person controlling a domestic insurer, if the other person is not substantially engaged in any businesses other than insurance, if that would result in the person acquiring control of the insurer. Existing law also prohibits a person from entering into an agreement to merge with or otherwise acquire control of a domestic insurer. These prohibitions do not apply if, at the time copies of the offer, purchase, request, or invitation are first published, sent, or given to security holders or the agreement or transaction is entered into, the person has filed with the commissioner, and has sent to the insurer, a statement containing specified information and any additional information the commissioner prescribes in the public interest or to protect policyholders or shareholders. Under the act, a domestic insurer or commercially domiciled insurer, and a person in its insurance holding company system, may only enter into specified affiliate transactions, including reinsurance or pooling agreements, if the insurer has notified the commissioner in writing of its intent to enter into the transaction with at least 30 days' notice, or a shorter period that the commissioner allows, and the commissioner has not disapproved the transaction within that period. The act provides that any insurer or any director, officer, employee, or agent of the insurer that commits a willful violation of the act is subject to criminal proceedings. This bill would require the tender offer or merger statement and the notification of proposed affiliate transaction filed with the commissioner to be submitted on a form and in a format prescribed by the National Association of Insurance Commissioners. Because a willful violation of this provision would be subject to criminal proceedings, the bill would create a state-mandated local program. This bill would authorize the commissioner to act as groupwide supervisor, as defined, for any internationally active insurance group, as defined, or, alternatively, authorize the commissioner to acknowledge another regulatory official as the groupwide supervisor if the internationally active insurance group meets any specified condition pertaining to its insurance operations in the state. The bill would also authorize the commissioner, as the groupwide supervisor, to engage in specified supervision activities, including, but not limited to: (A) assessing the enterprise risks within the internationally active insurance group; (B) requesting relevant information from any member of that group; and (C) coordinating and compelling development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to its member. The bill would also make technical, nonsubstantive, and conforming changes. (3) 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. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (5) This bill would declare that it is to take effect immediately as an urgency statute.

Bill Text

• Chaptered 08/17/15 - Chaptered Current pdf August 17, 2015
• Enrolled 07/13/15 - Enrolled pdf July 13, 2015
• Amended 04/22/15 - Amended Assembly pdf April 22, 2015
• Amended 04/06/15 - Amended Assembly pdf April 06, 2015
• Introduced 02/23/15 - Introduced pdf February 23, 2015
• AB553 View text html

Action History

1. August 17, 2015

   Chaptered by Secretary of State - Chapter 213, Statutes of 2015.

2. August 17, 2015

   Approved by the Governor.

3. August 03, 2015

   Enrolled and presented to the Governor at 3 p.m.

4. July 09, 2015

   In Assembly. Ordered to Engrossing and Enrolling.

5. July 09, 2015

   Read third time. Urgency clause adopted. Passed. Ordered to the Assembly. (Ayes 39. Noes 0. Page 1878.).

6. July 07, 2015

   Read second time. Ordered to Consent Calendar.

7. July 06, 2015

   From committee: Be placed on second reading file pursuant to Senate Rule 28.8 and ordered to consent calendar.

8. June 24, 2015

   From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (June 23). Re-referred to Com. on APPR.

9. June 11, 2015

   From committee: Do pass and re-refer to Com. on JUD. with recommendation: To Consent Calendar. (Ayes 9. Noes 0.) (June 10). Re-referred to Com. on JUD.

10. May 28, 2015

    Referred to Coms. on INS. and JUD.

11. May 14, 2015

    In Senate. Read first time. To Com. on RLS. for assignment.

12. May 14, 2015

    Read third time. Urgency clause adopted. Passed. Ordered to the Senate. (Ayes 78. Noes 0. Page 1448.).

13. May 07, 2015

    Read second time. Ordered to Consent Calendar.

14. May 06, 2015

    From committee: Do pass. To Consent Calendar. (Ayes 17. Noes 0.) (May 6).

15. April 23, 2015

    Re-referred to Com. on APPR.

16. April 22, 2015

    Read second time and amended.

17. April 21, 2015

    From committee: Amend, and do pass as amended and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 10. Noes 0.) (April 21).

18. April 09, 2015

    From committee: Do pass and re-refer to Com. on JUD. with recommendation: To Consent Calendar. (Ayes 12. Noes 0.) (April 8). Re-referred to Com. on JUD.

19. April 07, 2015

    Re-referred to Com. on INS.

20. April 06, 2015

    From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.

21. March 05, 2015

    Referred to Coms. on INS. and JUD.

22. February 24, 2015

    From printer. May be heard in committee March 26.

23. February 23, 2015

    Read first time. To print.

Sponsors

• Daly · Primary

Votes

Subjects