Current Legislation

Last Update: March 2008

California Legislature

AB 2956 (COTO)

This bill will be heard in the Assembly insurance committee on April 2 or 16. The bill would codify the traditional "totality of the circumstances" test for determining whether an insurance professional is acting as a broker or as an agent. Insurance producers need clear guidelines to determine which activities constitute agency and which constitute brokerage. This legislation was negotiated among the Commissioner's Agents and Brokers Advisory Committee. Through many conference calls, meetings, e-mails and reams of paper, the SLA and CIWA were instrumental in making sure the wholesale distribution system is not harmed by this bill. The bill ads a disclosure requirement from retail brokers to the insured and from wholesale brokers to the originating producer in order for the statutory "presumption of broker" to apply. The wholesaler disclosure would include the nature and amount of fees and the fact of any insurer compensation it receives. The prospects for this legislation are unclear -- opposition is expected from the trial bar.

AB 1699 (DUVALL)

Referred to Senate Committee on Banking, Finance and Insurnace - may be heard on March 27. This is a two-year bill that may be amended at the request of the CDI to further reduce the licensing fees for surplus line brokers who transact insurance solely for a licensed surplus line broker organization. Keith Kuzmich of the CDI licensing bureau has provided a detailed explanation of the CDI proposed amendments which would provide licensing fee refunds via credits to the 1,398 brokers licensed as individual surplus line brokers after 1/1/08. The credits would occur over a two-year period. Moreover, the CDI has proposed the licensing fee for these brokers be reduced to $250 once every two years.

AB 2044 (DUVALL)

This bill, sponsored by the Department of Insurance, is intended to be a technical clean-up bill. However, the department has indicated that is intends to add provisions that would reduce from 30 hours to 24 hours the mandatory continuing education requirement for property and casualty brokers/agents and allow the department to issue citations to producers for minor violations of the insurance code. The CDI needs this bill to bring California in compliance with the NAIC uniform standard for broker licensing.

AB 3054 (CALIFORNIA DEPARTMENT OF INSURANCE)

This bill is an insurance omnibus bill intended as a technical cleanup of the insurance code but includes one provision dealing with the interest calculation for surplus line broker premium tax late payments. The SLA has determined that his bill will have no material impact on Surplus Line Brokers.