Bill Text: CA SB534 | 2019-2020 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2019-09-05 - Chaptered by Secretary of State. Chapter 249, Statutes of 2019. [SB534 Detail]
Download: California-2019-SB534-Amended.html
SECTION 1. Article 10.2 (commencing with Section 927) is added to Chapter 1 of Part 2 of Division 1 of the Welfare and Institutions Code , to read: reporting period. previous two years.
Bill Title: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2019-09-05 - Chaptered by Secretary of State. Chapter 249, Statutes of 2019. [SB534 Detail]
Download: California-2019-SB534-Amended.html
|
Amended
IN
Senate
March 28, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Senate Bill | No. 534 |
| Introduced by Senator Bradford |
February 21, 2019 |
An act to add Article 10.2 (commencing with Section 927) to Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 534, as amended, Bradford.
Insurers: minority, women, disabled veteran, LGBT, veteran, and disabled veteran business enterprises.
Existing law requires each admitted insurer with premiums written equal to or in excess of $100,000,000 to provide information to the Insurance Commissioner on all of its community development investments and community development infrastructure investments in California.
This bill would require those insurers to also submit to the commissioner a report on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts, as specified. The bill would provide that the failure to file the report by the reporting deadline subjects the admitted insurer to civil penalties to be fixed and enforced by the commissioner, as provided. The bill would also require each of those insurers to submit a report regarding its governing board and board diversity goals. The bill would require each report to be submitted on July 1, 2020,
and then biennially thereafter. The bill would require the commissioner, by November 1 of each reporting year, to establish and maintain a link on the department’s internet website that provides public access to those reports.
The bill would require the commissioner to establish and appoint an Insurance Diversity Task Force to advise the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Article 10.2 (commencing with Section 927) is added to Chapter 1 of Part 2 of Division 1 of the Insurance Code, to read:Article 10.2. Minority, Women, LGBT, Veteran, and Disabled Veteran Business Enterprises
927.
The Legislature finds and declares all of the following:(a) It is in the state’s interest to encourage competitive business opportunities for all of its people. Insurers are uniquely positioned to build relationships within the communities they serve through the development, inclusion, and utilization of certified minority, women, LGBT, veteran, and disabled veteran-owned business enterprises whenever possible. National companies are able to leverage buying power to save costs to the benefit of policyholders.
(b) It is in the state’s interest to encourage corporate leadership opportunities for all of its people. Insurers are uniquely
positioned to build relationships within the communities they serve through the development of a corporate board that represents the diversity of the state.
(c) By requiring each major insurer to submit to the Insurance Commissioner a report explaining the insurer’s supplier diversity statement, expressing its goals regarding certified minority, women, LGBT, veteran, and disabled veteran-owned business enterprises, and detailing the insurer’s efforts and goals regarding board diversity, and by having the commissioner place that information on the department’s internet website, will help facilitate these relationships.
927.1.
For the purposes of this article, the following definitions apply:(a) “Control” means to exercise the power to make policy decisions.
(b) “Disabled veteran business enterprise” has the same meaning as defined in subparagraph (A) of paragraph (7) of subdivision (b) of Section 999 of the Military and Veterans Code, or any successor provision. Disabled veteran business enterprise certification eligibility requirements shall be consistent with those imposed by the Department of General Services, and this section applies only to those disabled veteran business enterprises certified by the Department of General Services.
(c)“Diverse business enterprise” means a business enterprise that meets the definition of a certified minority, women, LGBT, veteran, or disabled veteran business enterprise under this section or that meets the definition of a “disadvantaged business enterprise” as contained in the federal Disadvantaged Business Enterprise Program (Part 26 of Title 49 of the Code of Federal Regulations).
(d)
(c) “LGBT business enterprise” means a business enterprise that is 51 percent owned, managed, operated, and controlled by one or more lesbian, gay, bisexual, or transgender (LGBT) individuals who are citizens or lawful permanent residents of the United States,
individuals, has been legally formed in the United States, and exercises independence from any non-LGBT business enterprise.
(e)
(d) “Minority business enterprise” means a business enterprise, physically located in the United States or its trust territories, that is at least 51 percent owned by a minority group or groups, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more minority groups, and whose management and daily business operations are controlled by one or more of those individuals. “Minority”
includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans who provide proof of United States citizenship or legal resident alien status.
Americans.
(f)
(e) “Operate” means to be actively involved in the day-to-day management of the enterprise and not to be merely officers or directors.
(g)
(f) “Women business enterprise” means a business enterprise physically located in the United
States or its trust territories, that is at least 51 percent owned by a woman or women, or, in the case of any publicly owned business at least 51 percent of the stock of which is owned by one or more women, and whose management and daily business operations are controlled by one or more of those individuals, who provide proof of United States citizenship or legal resident alien status.
individuals.
(h)
(g) “Veteran business enterprise” means a business enterprise physically located in the United States or its trust territories that is at least 51 percent owned by one or more veteran groups or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one or more veteran groups, and whose management and daily business operations are controlled by one or more of those individuals.
927.2.
(a) (1) Commencing July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer, with California premiums written of one hundred million dollars ($100,000,000) or more, shall submit a report to the commissioner on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts during the(2) The report shall include all of the following:
(A) The insurer’s supplier diversity policy statement.
(B) The insurer’s outreach and communications to minority, women, LGBT, veteran, and disabled veteran business enterprises, including:
(i) How the insurer encourages and seeks out minority, women, LGBT, veteran, and disabled veteran-owned business enterprises to become potential suppliers.
(ii) How the insurer encourages its employees involved in procurement to seek out minority, women, LGBT, veteran, and disabled veteran-owned business enterprises to become potential suppliers.
(iii) How the insurer conducts outreach and communication to minority,
women, LGBT, veteran, and disabled veteran business enterprises.
(iv) How the insurer supports organizations that promote or certify minority, women, LGBT, veteran, and disabled veteran-owned business enterprises.
(v) Information regarding appropriate contacts at the insurer for interested business enterprises.
(C) Information about which procurements are made from minority, women, LGBT, and veteran business enterprises with a headquarters’ address in California, and from disabled veteran business enterprises, as defined in subdivision (b) of Section 927.1, with each category aggregated separately, to the extent that information is readily accessible. An insurer may also include other relevant information in the
report.
(D) Information about which procurements are made from minority, women, LGBT, veteran, and disabled veteran business enterprises with at least a majority of the enterprise’s workforce in California, with each category aggregated separately, to the extent that information is readily accessible. An insurer may also include other relevant information in the report.
(E) Information related to total procurement contract dollars awarded, to the extent that information is readily accessible. An insurer may also include other relevant information in the report.
(3) An insurer that does not enter into contracts to procure goods or services in
California satisfies the requirements of paragraph (2) by filing a statement with the commissioner attesting that it does not enter into procurement contracts in California.
(b) This section does not require quotas, set-asides, or preferences in an admitted insurer’s procurement of goods or services, and this section does not apply to insurer producer or licensee contracts. Admitted insurers retain the authority to use business judgment to select the supplier for a particular contract.
(c) This section does not preclude an admitted 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 paragraphs (1) and (2) of subdivision (a) through a single filing on behalf of the entire group of
affiliated companies.
(d) Failure to file the report required by subdivision (a), by the reporting deadline, shall subject the admitted insurer to a civil penalty to be fixed by the commissioner, not to exceed five thousand dollars ($5,000), or if the act or practice was willful, a civil penalty not to exceed ten thousand dollars ($10,000). An insurer may request, and the commissioner may grant, a 30-day extension to file the report if needed due to unintended or unforeseen delays. If the insurer has failed to file the report within 30 days of a written notice by the commissioner that the insurer has failed to file the report, the commissioner may find that the failure to file the report was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000). The penalty imposed by this section shall be enforced
by the commissioner and is appealable by means of any remedy provided by Section 12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section.
(e) By November 1 of the reporting year, the commissioner shall establish and maintain a link on the department’s internet website that provides public access to the contents of each admitted insurer’s report on minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts. The commissioner shall include a statement on the department’s internet website that the information contained in the insurer’s report on minority, women, LGBT, veteran, and disabled veteran-owned businesses is provided for informational purposes
only.
927.3.
(a) (1) Commencing July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer with California premiums written of one hundred million dollars ($100,000,000) or more, shall submit a report to the commissioner on its governing board and board diversity efforts during the previous two years.(2) The report shall include the following information:
(A) The demographic makeup of the insurer’s governing board.
(B) The insurer’s goals surrounding board diversity, including outreach and communication
strategies to diversify its board.
(b) An insurer shall provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting the information described in subparagraph (A) of paragraph (2) of subdivision (a).
(c) This section does not require quotas, set-asides, or preferences in regard to an admitted insurer’s governing board.
(d) This section does not preclude an admitted 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 paragraphs (1) and (2) of subdivision (a) through a single filing on behalf of an entire group of affiliated companies.
(e) By November 1 of the reporting year, the commissioner shall establish and maintain a link on the department’s internet website that provides public access to the contents of each admitted insurer’s report submitted pursuant to this section. The commissioner shall include a statement on the department’s internet website that the information contained in the insurer’s report is provided for informational purposes only.
927.4.
(a) The commissioner shall establish and appoint an Insurance Diversity Task Force.(b) The task force shall be comprised of at least 13, but not more than 15, members as follows:
(1) The commissioner or the commissioner’s designee.
(2) Two members who are representatives in the insurance industry, one of whom shall, at the time of appointment, serve as a practitioner in the field of supplier diversity, and one of whom shall, at the time of appointment, have expertise in governing
board diversity.
(3) Two members who are representatives of a minority business enterprise.
(4) Two members who are representatives of a women business enterprise.
(5) A member who is a representative of a disabled veteran business enterprise or a veteran business enterprise.
(6) A member who is a representative of an LGBT business enterprise.
(7) Two members with expertise in the field of supplier diversity.
(8) Two members with expertise in the field of governing board diversity.
(c) The term of each member shall be for two years. Staggered terms shall be established by drawing lots at the first meeting of the task force so that a simple majority of the members shall initially serve a two-year term, and the remainder shall initially serve a one-year term.
(d) The task force shall have all of the following duties:
(1) To advise and provide recommendations to the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry.
(2) To meet quarterly, or as deemed necessary by the commissioner, or the commissioner’s designee.
(3) Assist the department in promoting and providing outreach to insurance companies that are actively engaged in supplier and governing board diversity issues.
(e) The members of the task force shall not receive compensation from the state for their services under this section but may be reimbursed for their actual and necessary expenses incurred in connection with attending a task force meeting.
(f) The department shall review and revise, if necessary, the department’s conflicts of interest regulations to ensure that each task force member is required to disclose conflicts of interest to the public.
