Bill Text: CA AB53 | 2011-2012 | Regular Session | Amended

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

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Bill Title: Insurers: procurement contracts: minority, women, and

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Passed) 2012-09-21 - Chaptered by Secretary of State - Chapter 414, Statutes of 2012. [AB53 Detail]

Download: California-2011-AB53-Amended.html

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BILL NUMBER: AB 53	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 10, 2012
	AMENDED IN ASSEMBLY  MAY 19, 2011
	AMENDED IN ASSEMBLY  MAY 11, 2011
	AMENDED IN ASSEMBLY  MARCH 21, 2011

INTRODUCED BY   Assembly Member Solorio
   (Coauthors: Assembly Members Davis, Furutani, Mendoza, and
Portantino)
   (Coauthor: Senator Price)

                        DECEMBER 6, 2010

   An act to add Article 10.2 (commencing with Section 927) to
Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to
insurers.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 53, as amended, Solorio. Insurers: procurement contracts:
minority, women, and disabled veteran business enterprises.
   Existing law requires each admitted insurer to provide information
to the Insurance Commissioner on all of its community development
investments and community development infrastructure investments in
California.
   This bill would require that each admitted insurer with premiums
written equal to or in excess of $100,000,000  to 
submit to the commissioner, by July 1, 2012, a report on its
minority, women, and disabled  veteran  
veteran-owned  business  enterprises 
procurement efforts, as specified. Failure   The
bill would provide that the failure  to file the report
,  by July 1, 2012,  would subject 
 subjects  the admitted insurer to civil penalties to be
fixed by the commissioner, as provided.
   The bill would require, among other things, that commencing July
1, 2014, each eligible admitted insurer biennially update its
supplier diversity report and submit a new report, containing
additional elements, to the commissioner no later than July 1.
   The bill would require that, by July 31, 2012, the commissioner
establish and maintain a link on the department's Internet Web site
that provides public access to the contents of each admitted insurer'
s report on minority, women, and disabled veteran-owned business
procurement efforts. 
   The bill would require that a supplier firm that provides a
materially false statement regarding its status as a minority, women,
or disabled veteran business enterprise be barred for up to 3 years
from being considered as one of those enterprises. 
   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.  Article 10.2 (commencing with Section 927) is added to
Chapter 1 of Part 2 of Division 1 of the Insurance Code, to read:

      Article 10.2.   Women,  Minority,  Women,
 and Disabled Veteran Business Enterprises


   927.  The Legislature finds and declares all of the following:
   (a) It is in the state's interest to encourage competitive
business opportunities for all of its people. Insurers are uniquely
positioned to build relationships within the communities they serve
through the development, inclusion, and utilization of certified
minority, women, and disabled veteran-owned business enterprises
whenever possible. National companies are able to leverage buying
power to save costs to the benefit of policyholders.
   (b) By providing that each major insurer submit to the Insurance
Commissioner a report  and plan containing  
explaining  the insurer's supplier diversity statement and
expressing its goals regarding certified minority, women, and
disabled veteran-owned business enterprises, and the commissioner
placing that information on the department's Internet Web site, that
online resource will help facilitate these supplier relationships.
   927.1.  For the purposes of this article, the following
definitions apply:
   (a) "Control" means to exercise the power to make policy
decisions.
   (b) "Disabled veteran business enterprise" has the same meaning as
defined in subparagraph (A) of paragraph (7) of subdivision (b) of
Section 999 of the Military and Veterans Code, or any successor
provision. Disabled veterans business enterprise certification
eligibility requirements shall be consistent with those imposed by
the Department of General Services, and this section applies only to
those disabled veteran business enterprises certified by the
Department of General Services.
   (c) "Minority business enterprise" means a business enterprise,
physically located in the United States or its trust territories,
that is at least 51 percent owned by a minority group or groups, or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more minority groups, and whose
management and daily business operations are controlled by one or
more of those individuals. "Minority" includes African Americans,
Hispanic Americans, Native Americans, and Asian Pacific Americans who
provide proof of United States citizenship or legal resident alien
status.
   (d) "Operate" means to be actively involved in the day-to-day
management of the enterprise and not to be merely officers or
directors.
   (e) "Women business enterprise" means a business enterprise
physically located in the United States or its trust territories,
that is at least 51 percent owned by a woman or women, or, in the
case of any  publically   publicly  owned
business at least 51 percent of the stock of which is owned by one or
more women, and whose management and daily business operations are
controlled by one or more of those individuals, who provide proof of
United States citizenship or legal resident alien status.
   927.2.  (a) (1) By July 1, 2012, each admitted insurer, with
premiums written of one hundred million dollars ($100,000,000) or
more, shall submit a report to the commissioner on its minority,
women, and disabled veteran-owned business procurement efforts 
during t   he reporting period  .
   (2) The report shall include all of the following:
   (A) The insurer's supplier diversity policy statement.
   (B) The insurer's outreach and communications to minority, women,
and disabled veteran business enterprises, including:
   (i) How the insurer encourages and seeks out minority, women, and
disabled veteran owned business enterprises to become potential
suppliers.
   (ii) How the insurer encourages its employees involved in
procurement to seek out minority, women, and disabled veteran-owned
business enterprises to become potential suppliers.
   (iii) How the insurer conducts outreach and communication to
minority, women, and disabled veteran business enterprises.
   (iv) How the insurer supports organizations that promote or
certify minority, women, and disabled veteran-owned business
enterprises.
   (v) Information regarding appropriate contacts at the insurer for
interested business enterprises.
   (C) The report shall include information about which procurements
are made from minority, women, and disabled veteran business
enterprises with at least a majority of the enterprise's workforce in
California, to the extent that information is readily accessible.
   (b) Nothing in this section shall be construed to require quotas,
set-asides, or preferences in an admitted insurer's procurement of
goods or services, nor does this section apply to insurer producer or
licensee contracts. Admitted insurers retain the authority to use
business judgment to select the supplier for a particular contract.
   (c) Nothing in this section shall preclude an admitted 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 paragraphs (1) and (2) of subdivision (a) through a
single filing on behalf of the entire group of affiliated companies.
   (d) Failure to file the report required by subdivision (a), by
July 1, 2012, shall subject the admitted insurer to a civil penalty
to be fixed by the commissioner, not to exceed five thousand dollars
($5,000), or if the act or practice was willful, a civil penalty not
to exceed ten thousand dollars ($10,000). If the insurer has failed
to file the report within 30 days of a written notice by the
commissioner, the commissioner may find that the failure to file the
report was willful and increase the civil penalty to an amount not to
exceed ten thousand dollars ($10,000). The penalty imposed by this
section is appealable by means of any remedy provided by Section
12940, or by Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code.
   (e)  (1)  Commencing July 1, 2014, each admitted
insurer specified in subdivision (a) shall biennially update its
supplier diversity report and submit the new report to the
commissioner no later than July 1. 
   (2) By July 1, 2014, each insurer specified in subdivision (a)
shall, as part of the supplier diversity report, submit to the
commissioner a plan that includes the goals and outreach efforts that
are planned in connection with procurement from minority, women, and
disabled veteran business enterprises during the current and
following calendar year. The plan shall also include all of the
elements contained in subdivision (a). 
   (f) By July 31, 2012, the commissioner shall establish and
maintain a link on the department's Internet Web site that provides
public access to the contents of each admitted insurer's report on
minority, women, and disabled veteran-owned business procurement
efforts. 
   (g) Each insurer required to submit a report or plan pursuant to
this section may request verification of the status of any supplier
that asserts it qualifies as a women business enterprise, a minority
business enterprise, or a disabled veteran business enterprise from
the Public Utilities Commission, the Department of General Services,
the Department of Insurance, or any entity selected or recognized by
these agencies for the purpose of verifying the accuracy of that
assertion.  
   (h) (1) In the event that the report or plan includes a goal to
increase procurement from minority, women, or disabled veteran
business enterprises, then the procurement attributed to a minority,
women, or disabled veteran business enterprise, for statistical
purposes, shall be one that is verified as one of those enterprises
by the primary entity selected by the Public Utilities Commission, by
the Department of General Services, or by the Department of
Insurance for this purpose, or by another entity or organization that
is recognized by any of these agencies to conduct supplier
verifications. Insurers are encouraged to utilize these verification
resources.  
   (2) This subdivision does not require any state agency to conduct
these verifications, contract with any entity to conduct these
verifications, or to recognize any other entity or organization for
this purpose.  
   (i) A supplier firm that provides a materially false statement
regarding its status as a minority, women, or disabled veteran
business enterprise shall be barred for up to 3 years from being
counted as one of those enterprises for purposes of this section.

   927.3.  In order to facilitate the participation of 
women-owned businesses,  minority-owned businesses, 
women-owned businesses,  disabled veteran-owned businesses, and
small businesses in contract procurement, any insurer subject to this
article may consider the following measures to include those
businesses in all phases of their contracting:
   (a) Timely or progressive payments to those businesses.
   (b) The provision of assistance to those businesses by securing
contract payments to those businesses with letters of credit,
negotiable securities, or other financing arrangements or measures.