Bill Text: CA AB1072 | 2015-2016 | Regular Session | Amended

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

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Bill Title: Insurance: firefighters' or police officers' benefit and relief associations.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-10-05 - Chaptered by Secretary of State - Chapter 503, Statutes of 2015. [AB1072 Detail]

Download: California-2015-AB1072-Amended.html

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BILL NUMBER: AB 1072	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 28, 2015
	AMENDED IN ASSEMBLY  APRIL 13, 2015

INTRODUCED BY   Assembly Member Daly

                        FEBRUARY 27, 2015

   An act to add and repeal Section 11401.5 of the Insurance Code,
relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1072, as amended, Daly. Insurance:  firefighters
  firefighters'  or police officers' benefit and
relief associations.
   Existing law generally provides for the regulation of insurers by
the Department of Insurance pursuant to laws set forth in the
Insurance Code. Existing law authorizes the Insurance Commissioner to
make certain examinations, investigations, and prosecutions and,
upon making a determination of the existence of certain conduct,
conditions, or grounds, to issue orders reasonably necessary to
correct, eliminate, or remedy the conduct, conditions, or grounds.
   Existing law exempts from the requirements set forth in the
Insurance Code firemen's, policemen's, and peace officers' benefit
and relief associations that comply with specified criteria,
including, among other things, a requirement that the membership
consist solely of peace officers, members of police or fire
departments, and emergency medical personnel employed by fire
departments, as specified. Existing law prohibits an association from
operating or doing business in the state without a certificate of
authority.
   This bill would require every association that holds a certificate
of authority to submit to the commissioner the opinion, as
specified, of a qualified actuary as to whether the reserves and
related actuarial items that support the policies or contracts issued
are based on assumptions that satisfy contractual provisions, are
consistent with prior reported amounts, and are based on specified
actuarial standards and procedures. The bill would also require an
association seeking a certificate of authority to file an opinion
that meets specified requirements and that establishes that it would
have adequate resources to provide benefits, as specified, as
required to satisfy its proposed contractual obligations. The bill
would require the commissioner to notify the association of the
deficiencies in the filing if the association fails to provide an
opinion and supporting memoranda to the commissioner that meets the
requirements of the bill, as specified. The bill would also require
the commissioner, if he or she determines that the laws governing
these associations are inadequate to protect the interests of the
members of the associations, to develop and deliver recommendations
to the Assembly Committee on Insurance and the Senate Committee on
Insurance regarding changes in the law that would better protect the
interests of members of the associations. The provisions of the bill
would remain in effect only until December 31, 2018, and as of that
date are repealed.
   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 11401.5 is added to the Insurance Code, to
read:
   11401.5.  (a) (1) Each association that holds a certificate of
authority pursuant to this chapter shall submit to the commissioner
the opinion of a qualified actuary as to whether the reserves and
related actuarial items that support the policies or contracts issued
pursuant to this chapter, including policies and contracts issued by
entities established by these associations that provide benefits
described in this chapter, are based on assumptions that satisfy
contractual provisions, are consistent with prior reported amounts,
and are based on actuarial standards and procedures established by
the American Academy of Actuaries and the Actuarial Standards Board.
An association that holds a certificate of authority pursuant to this
chapter shall file its initial opinion no later than July 1,
 2016, and each July 1 thereafter.   2016. 

   (2) An association seeking a certificate of authority pursuant to
this chapter shall file an opinion, to the extent feasible, that
establishes that it would have adequate resources to provide benefits
described in this chapter as required to satisfy its proposed
contractual obligations.
   (b) The opinion required by subdivision (a) shall include an
opinion with supporting memoranda consistent with the same qualified
actuary as to whether the reserves and related actuarial items held
in support of the policies and contracts, when considered in light of
the assets held by the association with respect to the reserves and
related actuarial items, including, but not limited to, the
investment earnings on the assets and the considerations anticipated
to be received and retained under the policies and contracts, and
shall make adequate provision for the association's obligations under
the policies and contracts, including, but not limited to, the
benefits under any expenses associated with the policies and
contracts.
   (c) The opinion required by subdivision (b) shall be governed by
the following provisions:
   (1) It shall include a memorandum, in form and  substance,
  substance  consistent with actuarial standards
and procedures established by the American Academy of Actuaries and
the Actuarial Standards Board, in support of the opinion.
   (2) If the association fails to provide an opinion and supporting
memoranda to the commissioner that meets the requirements of this
section, the commissioner shall notify the association of the
deficiencies in the filing, and shall make a specific request that
identifies the issues that should be addressed in an amended filing.
   (d) If the commissioner determines, after a review of the filings
from the  associations   associations, 
that the laws governing these associations are inadequate to protect
the interests of the members of the associations, he or she shall
develop and deliver recommendations to the Assembly Committee on
Insurance and the Senate Committee on Insurance regarding changes in
the law that would better protect the interests of members of the
associations.
   (e) This section shall remain in effect only until December 31,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before December 31, 2018, deletes or extends
that date.