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Warning! This is a not the current version of this legislative bill.
Italicized text includes proposed additions to law or the previous version of the bill.
Struck text includes proposed deletions to law or the previous version of the bill.

(pdf version)
AMENDED IN SENATE JUNE 19, 2012
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 submit to the
commissioner, by July 1, 2012 2013 , a
report on its minority, women, and disabled veteran-owned business
procurement efforts, as specified. The bill would provide that the
failure to file the report by July 1, 2012
2013
, 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 2015 , 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
2013 , 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.
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. 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 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 veteran
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 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 2013
, each admitted insurer, with California
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
the 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, with each category aggregated separately, to
the extent that information is readily accessible. An insurer
may also include other relevant information in the report.


(3) An insurer that does not enter into contracts to procure goods
or services in California satisfies the requirements of paragraph
(2) by filing a statement with the commissioner attesting that it
does not enter into procurement contracts in California.

(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 2013 , 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). An insurer may request, and the commissioner
may grant, a 30-day extension to file the report if needed due to
unintended or unforeseen delays.
If the insurer has failed to
file the report within 30 days of a written notice by the
commissioner that the insurer has failed to file the report
, 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. This subdivision
is the sole means for enforcement of this section.

(e) Commencing July 1, 2014 2015 ,
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.
(f) By July 31, 2012 2013 , 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. The commissioner
shall include a statement on the department's Internet Web site that
the information contained in the
insurer's report on
minority, women, and disabled veteran-owned businesses is provided
for informational purposes only.

927.3. In order to facilitate the participation of 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.