Legislation, sponsored by California Insurance Commissioner John Garamendi is unnecessary, will increase costs and will further complicate data collection, said the American Insurance Association (AIA).
AB 925, authored by Assemblyman Mark Ridley-Thomas, D, requires insurers to report California community-related investments to the insurance commissioner every two years. It was heard in the Senate Banking, Finance and Insurance Committee yesterday.
“California insurers are the largest purchaser of municipal bonds in the state,” said Steve Suchil, AIA, assistant vice president, Western Region. “Insurers have demonstrated their significant commitment to California communities by investing more than $23 billion in state and local bonds, which includes funding for schools, as well as low-income housing and redevelopment. Insurers also are major contributors to California’s General Fund, paying $2.3 billion in premium taxes in 2005-06. In 2005, Commissioner Garamendi himself praised insurers for investing more than $7 billion in emerging and underserved communities.
“The Insurance Commissioner already has the authority to request this information from insurers at any time,” Suchil continued. “Nothing in state law prevents him from asking for this information and posting it on the Department of Insurance website. AB 925 does not benefit anyone, but it will require insurers to change their data and information collection processes in order to comply,” said Suchil.
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