Bill Text: CA AB2128 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurer investments: community development.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-17 - Chaptered by Secretary of State - Chapter 384, Statutes of 2014. [AB2128 Detail]

Download: California-2013-AB2128-Amended.html

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BILL NUMBER: AB 2128	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 1, 2014
	AMENDED IN ASSEMBLY  MARCH 19, 2014

INTRODUCED BY   Assembly Member Gordon

                        FEBRUARY 20, 2014

   An act to amend Sections 926.2  , 926.3,  and 12939.2 of
the Insurance Code, relating to insurer investments.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2128, as amended, Gordon. Insurer investments: community
development.
   Existing law requires each admitted insurer to provide information
by January 1, 2014, to the Insurance Commissioner on all of its
community development investments and community development
infrastructure investments in California. Community development
investments are investments where all or a portion of the investment
has as its primary purpose community development for, or that
directly benefits, California low- or moderate-income individuals,
families, or communities, and includes, but is not limited to,
investments in California in or through the California Organized
Investment Network (COIN), certified community development financial
institutions (CDFIs), and investments made pursuant to the
requirements of federal, state, or local community development
investment programs or community development investment tax incentive
programs, including green investments, if these investments directly
benefit low- or moderate-income individuals, families, and
communities and are consistent with applicable provisions. The
commissioner and the Department of Insurance are required to provide
certain information on community development investments and
community development infrastructure investments to the public 
on the department's Internet Web site  , as specified, by May
31, 2014, and  biennally   biennially  with
regard to green investments. These provisions are to remain in
effect only until January 1, 2015, and are repealed as of that date.

   This bill would extend the repeal date to January 1, 2020.
 
   This bill would revise and recast these provisions by instead
requiring each admitted insurer with annual premiums written in
California equal to or in excess of $100,000,000 for any reporting
year to provide information to the commissioner on all of its
community development investments, community development
infrastructure investments, and green investments in California. The
bill would require the information be reported by January 1, 2017, as
provided. The bill would revise the information that the
commissioner and the department are required to provide on the
department's Internet Web site by including information on the
actions taken by COIN to analyze the data by insurers for the purpose
of creating and identifying potential investment opportunities, as
specified. The bill would extend the department's Internet Web site
publication date from May 31, 2014, to November 1, 2017, inclusive,
would delete the biennial publication requirement for green
investments and instead require a publication deadline of November 1,
2017. The bill would also extend the repeal date to January 1, 2020.
 
   Existing law requires each insurer admitted in California that
writes premium in California equal to or in excess of $100,000,000
annually to develop, and file with the commissioner no later than
July 1, 2011, a policy statement on community development investments
and community development infrastructure investments that expresses
the insurer's goals for those investments during the filing year and
following calendar year. Thereafter, each insurer that these
provisions apply to is required to biennially review its policy
statement, and, if the insurer revises or changes its policy
statement, submit the new policy statement to the commissioner no
later than July 1 of each odd-numbered year.  
   This bill would delete the provisions requiring a biennial review
by each insurer of its policy statement and the submission of a new
policy statement if there is a revision or change. 
   Existing law requires the department, COIN, or any successor
thereof, to require the CDFIs receiving specified tax credit
investments to submit reports to the department, COIN, or any
successor thereof, on their use of the program. Existing law
authorizes the commissioner to establish and appoint a California
Organized Investment Network Advisory Board. The term of each board
member is 2 years and is staggered as provided. The board has certain
powers and duties, including, but not limited to, advising COIN, or
any successor thereof, on the best methods to increase the level of
insurance industry capital in safe and sound investments while
providing fair returns to investors and social benefits to
underserved communities, meeting quarterly or as deemed necessary by
the commissioner, and recommending programmatic guidelines, but not
specific allocations of the tax credit amount, to the COIN program.
The provisions regarding the board are in effect only until December
1, 2015, and are repealed as of that date.
   This bill would authorize the commissioner, in his or her
discretion, to extend or reduce a board member's 2-year term, and
would delete the staggered terms requirement. The bill would delete
the quarterly meeting requirement, and would instead require a
minimum of 3 or more meetings per year. The bill would also extend
the repeal date to January 1, 2020.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 926.2 of the Insurance Code is amended to read:

   926.2.  (a) (1) Each  insurer admitted in California shall
provide information, by January 1, 2014, to the commissioner on all
of its community development investments and community development
infrastructure investments in California.   admitted
insurer with annual premiums written in California equal to or in
excess of one hundred million dollars ($100,000,000) for any
reporting year shall provide information to the commissioner on all
of its community development investments, community development
infrastructure investments, and green investments in California. This
information shall be reported by January 1, 2017,   on
investments made during the calendar years 2013, 2014, and 2015 and
list, if applicable, investments that are high impact, green, or
rural.  This information shall be provided as part of the
required filing pursuant to Section 900 or Section 11131, or through
a data call, or by other means as determined by the commissioner.
 COIN   The California Organized Investment
Network (COIN)  shall provide insurers with information on why
investments, if any, were found not to be qualified by the
commissioner.
   (2) Nothing in this subdivision shall preclude an insurer that is
a member of an insurance holding company system, as defined in
Article 4.7 (commencing with Section 1215) of Chapter 2, from
complying with paragraph (1) through a single filing on behalf of the
entire group of affiliated companies, provided that the data so
filed accurately reflects the investments made by each of the
affiliates, and accurately attributes, by National Association of
Insurance Commissioners (NAIC) number or other identifier required by
the commissioner, which of the investments were made by each
affiliated company.
   (3) This subdivision shall not preclude an insurer from satisfying
the requirements of paragraph (1) through a filing made by a
community development financial institution, provided all of the
following conditions are met:
   (A) The insurer has no less than a 10 percent ownership interest
in a COIN-certified community development financial institution.
   (B) The insurer makes community development investments and
community development infrastructure investments in and through the
community development financial institution.
   (C) The community development financial institution accurately
files the information required by paragraph (1) with the commissioner
on behalf of the insurer and accurately attributes, by NAIC number
or other identifier required by the commissioner, which investments,
including the dollar amounts of the investments, were made by each
insurer on whose behalf the community development financial
institution is reporting.
   (b) The commissioner shall, by  May 31, 2014, provide
  information   November 1, 2017,
provide all of the following: 
   (1)     Information  on the department'
s Internet Web site on the aggregate insurer community development
investments and community development infrastructure investments.
Insurers that make investments that are innovative, responsive to
community needs, not routinely provided by insurers, qualify as green
investments, or have a high degree of positive impact on the
economic welfare of low- or moderate-income individuals, families, or
communities in urban or rural California shall be identified. 
   (2) Information on the department's Internet Web site on the
actions taken by COIN to analyze the data by insurers for the purpose
of creating and identifying potential investment opportunities,
including the development of investment opportunity bulletins. This
information shall state the efforts made by COIN to market and expand
outreach to communities. 
   (c) The department shall also, by  May 31, 2014, 
 November 1, 2017,  provide information on the department's
Internet Web site regarding the aggregate amount of California
public debt (including all debt issued by the State of California or
a California state or local government agency) purchased by insurers
as reported to the department in their NAIC annual statement filing
pursuant to Section 900 or Section 11131.
   (d) The department shall also, by  May 31, 2014, 
 November 1, 2017,  provide on its Internet Web site the
aggregate amount of identified California investments, as reported to
the NAIC in the annual statement filed pursuant to Section 900 or
Section 11131.
   (e) The department shall also  biennially  
by November 1, 2017,  provide information on its Internet Web
site regarding the aggregate amount of identified California insurer
investments in green investments.
   (f) This article shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
   SEC. 2.    Section 926.3 of the   Insurance
Code   is amended to read: 
   926.3.  (a) It is the policy of the State of California that (1)
insurers should, where practicable, be supportive of community
development investments and community development infrastructure
investments, and insurers should be encouraged to invest in prudent
community development investments and community development
infrastructure investments that benefit California and California's
low- and moderate-income communities; (2) every admitted insurer that
writes a substantial amount of insurance in the state should
consider community development investments and community development
infrastructure investments; and (3) the California Organized
Investment Network is a part of the department, and has the
responsibility to pursue active measures to encourage community
development investing by admitted insurers.
   (b) Each insurer admitted in California that writes premium in
California equal to or in excess of one hundred million dollars
($100,000,000) annually shall develop, and file with the commissioner
no later than July 1, 2011, a policy statement on community
development investments and community development infrastructure
investments that expresses the insurer's goals for these investments
during the current and following calendar year.  Thereafter,
each insurer subject to this subdivision shall biennially review its
policy statement on community development investments and community
development infrastructure investments and, if the insurer revises or
changes its policy statement, submit the new policy statement to the
commissioner no later than July 1 of each odd-numbered year. The
initial policy statement filed with the commissioner shall satisfy
the requirement of this subdivision if the insurer's policy statement
has not changed.  These filings shall be public
information. For purposes of this subdivision, "policy statement"
means a statement of principle intended to influence a decision or
action. The policy statement may include general goals or specific
investment goals, but is not required to contain specific investment
goals or thresholds.
   (c) The commissioner shall establish a link on the department's
Internet Web site that provides public access to the contents of each
insurer's policy statement and the data on community development
investments and community development infrastructure investments
provided by each insurer pursuant to subdivision (b).
   SEC. 2.   SEC. 3.   Section 12939.2 of
the Insurance Code is amended to read:
   12939.2.  (a) The commissioner may establish and appoint a
California Organized Investment Network Advisory Board.
   (b) For purposes of this section, all of the following shall
apply:
   (1) "Commissioner" means the Insurance Commissioner of this state.

   (2) "Board" means the California Organized Investment Network
Advisory Board.
   (3) "Licensed attorney" means an attorney who resides in this
state who has successfully passed the California bar examination and
has been admitted to practice in this state or has otherwise been
licensed to practice law in this state by the State Bar of
California.
   (c) The board shall include the commissioner, or his or her
designee, three executives in the insurance investment industry, and
one volunteer from each of the following categories:
   (1) A licensed attorney practicing insurance law.
   (2) A member of the public, appointed by the Speaker of the
Assembly.
   (3) A member of the public, appointed by the Senate Committee on
Rules.
   (4) A member of a consumer advocacy group.
   (5) An affordable housing practitioner.
   (6) A local economic development practitioner.
   (7) A member of a financial institution or a community development
financial institution.
   (8) A representative with experience seeking investments for low-
to moderate-income or rural communities.
   (d) The board shall elect, from among its members, a chair.
   (e) The term of each member shall be for two years and may be
extended or reduced at the discretion of the commissioner.
   (f) The board shall have all of the following powers and duties:
   (1) To advise the California Organized Investment Network, or any
successor thereof, on the best methods to increase the level of
insurance industry capital in safe and sound investments while
providing fair returns to investors and social benefits to
underserved communities.
   (2) To meet a minimum of three or more times per year, or as
deemed necessary by the commissioner.
   (3) To facilitate contacts among executives at insurance
companies, community-based organizations, and community development
financial institutions.
   (4) To recommend programmatic guidelines, but not specific
allocations of the tax credit amount, to the California Organized
Investment Network program.
   (g) The members of the board shall not receive compensation from
the state for their services under this section but, when called to
attend a meeting of the board, may be reimbursed for their actual and
necessary expenses incurred in connection with the meeting.
   (h) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.