Insurance Commissioner Dave Jones Applauds Passage of SB 1448 by California Senate Committee on Insurance
News: 2012 Press Release
Insurance Commissioner Dave Jones today announced that the California Senate Committee on Insurance passed SB 1448, authored by Senate Insurance Committee Chair Ron Calderon (D-Los Angeles) by a vote of 8 to 0. The bill, which received bipartisan support, is sponsored by Commissioner Jones and the California Department of Insurance. It updates California law to conform to recent revisions to the National Association of Insurance Commissioners (NAIC) Holding Company System Regulatory Act.
Holding company systems are large and complex, and SB 1448 gives the Commissioner much-needed new tools to evaluate the activities of non-insurance entities within a system that could pose a risk to an insurer. "This expanded oversight will provide a more comprehensive picture of an insurer's financial condition and this means better protection of policyholders," said Commissioner Jones.
One principal provision in the bill would require the controlling person of the holding company system to disclose an enterprise risk. Enterprise risk is any situation involving one or more affiliates of an insurer that, if not quickly corrected will adversely affect the financial condition of the insurer. The bill would also authorize the Commissioner to participate in "supervisory colleges". These colleges are meetings of international regulators for internationally active insurance groups to share financial and operational information.
The need for a greater ability to evaluate risks within insurance groups stems from the financial difficulties faced by some affiliates of the AIG insurance holding company system during the 2008 financial crisis.
SB 1448 now heads to the Senate Appropriations Committee for consideration.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.