Legislative ReportAB842: which provides for an "Export List," was passed and signed into law by Governor Wilson. It will allow certain risks to be placed with approved, nonadmitted insurers without a "Due Diligent Search" requirement. Your Association worked closely with the Agents and Brokers Legislative Council (ABL), who sponsored this legislation as well as other industry groups in the passage of this new law. It will help reduce unnecessary paperwork on many placements. We plan to be active in establishing the actual "Export List." AB1307: was also passed. This law cleaned up last years law that changed the "trigger" for payment of taxes from the effective date to the surplus line brokers invoice date. Your Association spent considerable time and effort on this bill working closely with the Department of Insurance. Among other items, it created an appeals procedure if there is a conflict between the Department of Insurance and the surplus line broker on the amount of taxes due. Both of the above bills become effective January 1, 1996. Two other bills of interest to surplus line brokers were changed to two-year bills. This means in order to become law, they must be passed in the 1996 legislative session. They are: SB1021: This bill would hold insurance brokers, agents and surplus line brokers liable for all damages incurred by any and all persons suffering financial loss if coverage is placed with an unauthorized insurer.
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Because of its broad implications, insurance retailers and wholesalers opposed this legislation as did your Association. Our Chairman, Jerry Sullivan, spent considerable time in Sacramento meeting with the bills' sponsor, Senator Pat Johnston, explaining the potential problem this bill would create for California insureds and licensees.
We are trying to reach an agreeable compromise, which will satisfy Senator Johnston's goal of keeping the "black hats" out of our business without putting strict liability into our law. We will keep you informed as to the progress of this bill.
AB328: This bill was introduced to amend Section 1616 and 1620 of the California Insurance Code. It would eliminate the current requirement that under certain circumstances eligible surplus line insurers must file a pre-answer bond to defend themselves in legal actions in California courts. Your Association as well as NAPSLO, AAMGA and other industry associations are in favor of this law. Unless relief is obtained, California may become less attractive for some insurers and restrict insurance availability for California insureds. Other bills that have been signed into law that our members should note are: AB23 which increases the insurance brokers bond requirement from $5,000 to $10,000, effective January 1, 1996, and AB702, which will require all licensees to include their license number on all stationery, business cards and quotes, effective January 1, 1997. It is important that each of us continue to be active in the political arena. Get to kno~v your current member of the California Assembly and Senate. When legislative issues arise that affect your business, spend a few minutes writing a personal letter or fax to your legislative representatives. They want and need your input.
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