Bill Text: CA AB2128 | 2013-2014 | Regular Session | Chaptered
Bill Title: Insurer investments: community development.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-09-17 - Chaptered by Secretary of State - Chapter 384, Statutes of 2014. [AB2128 Detail]
Download: California-2013-AB2128-Chaptered.html
BILL NUMBER: AB 2128 CHAPTERED
BILL TEXT
CHAPTER 384
FILED WITH SECRETARY OF STATE SEPTEMBER 17, 2014
APPROVED BY GOVERNOR SEPTEMBER 17, 2014
PASSED THE SENATE AUGUST 13, 2014
PASSED THE ASSEMBLY AUGUST 18, 2014
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN SENATE JULY 1, 2014
AMENDED IN ASSEMBLY MARCH 19, 2014
INTRODUCED BY Assembly Member Gordon
FEBRUARY 20, 2014
An act to amend Sections 926.1, 926.2, 926.3, and 12939.2 of the
Insurance Code, relating to insurer investments.
LEGISLATIVE COUNSEL'S DIGEST
AB 2128, Gordon. Insurer investments: community development.
Existing law requires each admitted insurer to provide information
by January 1, 2014, to the Insurance Commissioner on all of its
community development investments and community development
infrastructure investments in California. Community development
investments are investments where all or a portion of the investment
has as its primary purpose community development for, or that
directly benefits, California low- or moderate-income individuals,
families, or communities, and includes, but is not limited to,
investments in California in or through the California Organized
Investment Network (COIN)-certified community development financial
institutions (CDFIs) and investments made pursuant to the
requirements of federal, state, or local community development
investment programs or community development investment tax incentive
programs, including green investments, if these investments directly
benefit low- or moderate-income individuals, families, and
communities and are consistent with applicable provisions. The
commissioner and the Department of Insurance are required to provide
certain information on community development investments and
community development infrastructure investments to the public on the
department's Internet Web site, as specified, by May 31, 2014, and
biennially with regard to green investments. These provisions are to
remain in effect only until January 1, 2015, and are repealed as of
that date.
This bill would revise and recast these provisions by instead
requiring each admitted insurer with annual premiums written in
California equal to or in excess of $100,000,000 for any reporting
year to provide information to the commissioner on all of its
community development investments, community development
infrastructure investments, and green investments in California. The
bill would require the information be reported by July 1, 2016, as
provided. The bill would revise the information that the commissioner
and the department are required to provide on the department's
Internet Web site by, among other things, including information on
the actions taken by COIN to analyze the data by insurers for the
purpose of creating and identifying potential investment
opportunities, as specified. The bill would extend the department's
Internet Web site publication date from May 31, 2014, to December 31,
2016, and would delete the biennial publication requirement for
green investments and instead require a publication deadline of
December 31, 2016. The bill would also extend the repeal date to
January 1, 2020.
Existing law requires each insurer admitted in California that
writes premium in California equal to or in excess of $100,000,000
annually to develop, and file with the commissioner no later than
July 1, 2011, a policy statement on community development investments
and community development infrastructure investments that expresses
the insurer's goals for those investments during the filing year and
following calendar year. Thereafter, each insurer that these
provisions apply to is required to biennially review its policy
statement, and, if the insurer revises or changes its policy
statement, submit the new policy statement to the commissioner no
later than July 1 of each odd-numbered year.
This bill would delete the provisions requiring a biennial review
by each insurer of its policy statement and the submission of a new
policy statement if there is a revision or change.
Existing law requires the department, COIN, or any successor
thereof, to require the CDFIs receiving specified tax credit
investments to submit reports to the department, COIN, or any
successor thereof, on their use of the program. Existing law
authorizes the commissioner to establish and appoint a California
Organized Investment Network Advisory Board. The term of each board
member is 2 years and is staggered as provided. The board has certain
powers and duties, including, but not limited to, advising COIN, or
any successor thereof, on the best methods to increase the level of
insurance industry capital in safe and sound investments while
providing fair returns to investors and social benefits to
underserved communities, meeting quarterly or as deemed necessary by
the commissioner, and recommending programmatic guidelines, but not
specific allocations of the tax credit amount, to the COIN program.
The provisions regarding the board are in effect only until December
1, 2015, and are repealed as of that date.
This bill would delete the board members' staggered terms
requirement. The bill would delete the quarterly meeting requirement,
and would instead require a minimum of 3 or more meetings per year.
The bill would also extend the repeal date to January 1, 2020.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 926.1 of the Insurance Code is amended to read:
926.1. As used in this article, the following terms shall have
the following meanings:
(a) "Area median income" (AMI) means either of the following:
(1) The median family income for the Metropolitan Statistical Area
(MSA), if a person or geography is located in an MSA, or for the
metropolitan division, if a person or geography is located in an MSA
that has been subdivided into metropolitan divisions.
(2) The statewide nonmetropolitan median family income, if a
person or geography is located outside an MSA.
(b) "Community development investment" means an investment where
all or a portion of the investment has as its primary purpose
community development for, or that directly benefits, California low-
or moderate-income individuals, families, or communities. "Community
development investment" includes, but is not limited to, investments
in California in the following:
(1) Affordable housing, including multifamily rental and ownership
housing, for low- or moderate-income individuals or families.
(2) Community facilities or community services providers
(including providers of education, health, or social services)
directly benefiting low- or moderate-income individuals, families, or
communities.
(3) Economic development that demonstrates benefits, including,
but not limited to, job creation, retention, or improvement, or
provision of needed capital, to low- or moderate-income, individuals,
families, or communities, including urban or rural communities, or
businesses or nonprofit community service organizations that serve
these communities.
(4) Activities that revitalize or stabilize low- or
moderate-income communities.
(5) Investments in or through California Organized Investment
Network (COIN)-certified community development financial institutions
(CDFIs) and investments made pursuant to the requirements of
federal, state, or local community development investment programs or
community development investment tax incentive programs, including
green investments, if these investments directly benefit low- or
moderate-income individuals, families, and communities and are
consistent with this article.
(6) Community development infrastructure investments.
(7) Investments in a commercial property or properties located in
low- or moderate-income geographical areas and are consistent with
this article.
(c) "Community development infrastructure" means California public
debt (including all debt issued by the State of California or a
California state or local government agency) where all or a portion
of the debt has as its primary purpose community development for, or
that directly benefits, low- or moderate-income communities and is
consistent with subdivision (b).
(d) "Geography" means a census tract delineated by the United
States Bureau of the Census in the most recent decennial census.
(e) "Green investments" means investments that emphasize renewable
energy projects, economic development, and affordable housing
focused on infill sites so as to reduce the degree of automobile
dependency and promote the use and reuse of existing urbanized lands
supplied with infrastructure for the purpose of accommodating new
growth and jobs. "Green investments" also means investments that can
help communities grow through new capital investment in the
maintenance and rehabilitation of existing infrastructure so that the
reuse and reinvention of city centers and existing transportation
corridors and community space, including projects offering energy
efficiency improvements and renewable energy generation, including,
but not limited to, solar and wind power, mixed-use development,
affordable housing opportunities, multimodal transportation systems,
and transit-oriented development, can advance economic development,
jobs, and housing.
(f) "High-impact investments" means investments that are
innovative, responsive to community needs, not routinely provided by
insurers, or have a high degree of positive impact on the economic
welfare of low- or moderate-income individuals, families, or
communities in urban or rural areas of California.
(g) "Insurer" means an admitted insurer as defined in Section 24,
including the State Compensation Insurance Fund, or a domestic
fraternal benefit society as defined in Section 10990.
(h) "Investment" means a lawful equity or debt investment, or
loan, or deposit obligation, or other investment or investment
transaction allowed by the Insurance Code.
(i) "Low-income" means an individual income that is less than 50
percent of the AMI, or a median family income that is less than 50
percent of the AMI in the case of a geographical area.
(j) "MSA" means a metropolitan statistical area as defined by the
Director of the Office of Management and Budget.
(k) "Moderate-income" means an individual income that is at least
50 percent but less than 80 percent of the AMI, or a median family
income that is at least 50 percent but less than 80 percent of the
AMI in the case of a geographical area.
(l) "Nonmetropolitan area" means any area that is not located in
an MSA.
SEC. 2. Section 926.2 of the Insurance Code is amended to read:
926.2. (a) (1) Each admitted insurer with annual premiums written
in California equal to or in excess of one hundred million dollars
($100,000,000) for any reporting year shall provide information to
the commissioner on all of its community development investments,
community development infrastructure investments, and green
investments in California. This information shall be reported by July
1, 2016, on investments made or held during the calendar years 2013,
2014, and 2015 and list, if applicable, investments that are
high-impact, green, or rural. The information reported by insurers
may include investments both held and originated, the percentage of
any investment that qualifies, and why an investment qualifies. This
information shall be provided as part of the required filing pursuant
to Section 900 or 11131, or through a data call, or by other means
as determined by the commissioner. The California Organized
Investment Network (COIN) shall provide insurers with information on
why investments, if any, were found not to be qualified by the
commissioner.
(2) Nothing in this subdivision shall preclude an 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 paragraph (1) through a single filing on behalf of the
entire group of affiliated companies, provided that the data so
filed accurately reflects the investments made by each of the
affiliates, and accurately attributes, by National Association of
Insurance Commissioners (NAIC) number or other identifier required by
the commissioner, which of the investments were made by each
affiliated company.
(3) This subdivision shall not preclude an insurer from satisfying
the requirements of paragraph (1) through a filing made by a
community development financial institution, provided all of the
following conditions are met:
(A) The insurer has no less than a 10 percent ownership interest
in a COIN-certified community development financial institution.
(B) The insurer makes community development investments and
community development infrastructure investments in and through the
community development financial institution.
(C) The community development financial institution accurately
files the information required by paragraph (1) with the commissioner
on behalf of the insurer and accurately attributes, by NAIC number
or other identifier required by the commissioner, which investments,
including the dollar amounts of the investments, were made by each
insurer on whose behalf the community development financial
institution is reporting.
(b) The commissioner shall, by December 31, 2016, provide all of
the following:
(1) Information on the department's Internet Web site on the
aggregate insurer community development investments and community
development infrastructure investments. Insurers that make
high-impact investments that are defined as innovative, responsive to
community needs, not routinely provided by insurers, or have a high
degree of positive impact on the economic welfare of low- or
moderate-income individuals, families, or communities in urban or
rural areas of California shall be identified.
(2) Information on the department's Internet Web site on the
actions taken by COIN to analyze the data by insurers for the purpose
of creating and identifying potential investment opportunities,
including the development of investment opportunity bulletins. This
information shall state the efforts made by COIN to market and expand
outreach to communities.
(c) The department shall also, by December 31, 2016, provide
information on the department's Internet Web site regarding the
aggregate amount of California public debt (including all debt issued
by the State of California or a California state or local government
agency) purchased by insurers as reported to the department in their
NAIC annual statement filing pursuant to Section 900 or 11131.
(d) The department shall also, by December 31, 2016, provide on
its Internet Web site the aggregate amount of identified California
investments, as reported to the NAIC in the annual statement filed
pursuant to Section 900 or Section 11131.
(e) The department shall also by December 31, 2016, provide
information on its Internet Web site regarding the aggregate amount
of identified California insurer investments in green investments.
(f) This article shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 3. Section 926.3 of the Insurance Code is amended to read:
926.3. (a) It is the policy of the State of California that (1)
insurers should, where practicable, be supportive of community
development investments and community development infrastructure
investments, and insurers should be encouraged to invest in prudent
community development investments and community development
infrastructure investments that benefit California and California's
low- and moderate-income communities; (2) every admitted insurer that
writes a substantial amount of insurance in the state should
consider community development investments and community development
infrastructure investments; and (3) the California Organized
Investment Network is a part of the department, and has the
responsibility to pursue active measures to encourage community
development investing by admitted insurers.
(b) Each insurer admitted in California that writes premium in
California equal to or in excess of one hundred million dollars
($100,000,000) annually shall develop, and file with the commissioner
no later than July 1, 2011, a policy statement on community
development investments and community development infrastructure
investments that expresses the insurer's goals for these investments
during the current and following calendar year. These filings shall
be public information. For purposes of this subdivision, "policy
statement" means a statement of principle intended to influence a
decision or action. The policy statement may include general goals or
specific investment goals, but is not required to contain specific
investment goals or thresholds.
(c) The commissioner shall establish a link on the department's
Internet Web site that provides public access to the contents of each
insurer's policy statement and the data on community development
investments and community development infrastructure investments
provided by each insurer pursuant to subdivision (b).
SEC. 4. Section 12939.2 of the Insurance Code is amended to read:
12939.2. (a) The commissioner may establish and appoint a
California Organized Investment Network Advisory Board.
(b) For purposes of this section, all of the following shall
apply:
(1) "Commissioner" means the Insurance Commissioner of this state.
(2) "Board" means the California Organized Investment Network
Advisory Board.
(3) "Licensed attorney" means an attorney who resides in this
state who has successfully passed the California bar examination and
has been admitted to practice in this state or has otherwise been
licensed to practice law in this state by the State Bar of
California.
(c) The board shall include the commissioner, or his or her
designee, three executives in the insurance investment industry, and
one volunteer from each of the following categories:
(1) A licensed attorney practicing insurance law.
(2) A member of the public, appointed by the Speaker of the
Assembly.
(3) A member of the public, appointed by the Senate Committee on
Rules.
(4) A member of a consumer advocacy group.
(5) An affordable housing practitioner.
(6) A local economic development practitioner.
(7) A member of a financial institution or a community development
financial institution.
(8) A representative with experience seeking investments for low-
to moderate-income or rural communities.
(d) The board shall elect, from among its members, a chair.
(e) The term of each member shall be for two years.
(f) The board shall have all of the following powers and duties:
(1) To advise the California Organized Investment Network, or any
successor thereof, on the best methods to increase the level of
insurance industry capital in safe and sound investments while
providing fair returns to investors and social benefits to
underserved communities.
(2) To meet a minimum of three or more times per year, or as
deemed necessary by the commissioner.
(3) To facilitate contacts among executives at insurance
companies, community-based organizations, and community development
financial institutions.
(4) To recommend programmatic guidelines, but not specific
allocations of the tax credit amount, to the California Organized
Investment Network program.
(g) The members of the board shall not receive compensation from
the state for their services under this section but, when called to
attend a meeting of the board, may be reimbursed for their actual and
necessary expenses incurred in connection with the meeting.
(h) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
