Existing law requires each admitted insurer with premiums written equal to or in excess of $100,000,000 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 those insurers to also report to the commissioner on their minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts, as specified. Under the bill, a failure to report the information by the reporting deadline would subject the admitted insurer to civil penalties to be fixed and enforced by the commissioner, as provided. The bill would also require each of those insurers to report to the commissioner regarding the demographic makeup of the insurers governing board and the insurers goals regarding board diversity. The bill would require an insurer to provide each board member with an opportunity to participate in a survey for the purposes of collecting the demographic information, and would require an insurer to submit that information to the department in the aggregate. Under the bill, the demographic information would be confidential and the bill would prohibit the department or an insurer from releasing that information, except as provided by the bill.

The bill would require the above-described information to be reported to the commissioner on July 1, 2020, and then biennially thereafter. The bill would require the commissioner, by November 1 of each reporting year, to establish and maintain a link on the departments internet website that provides public access to the reported information.

The bill would require the commissioner to establish and appoint an Insurance Diversity Task Force to advise the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

 UNFINISHED BUSINESS  

Bill No: SB 534

Author: Bradford (D)

Amended: 7/3/19

Vote: 21

SENATE INSURANCE COMMITTEE: 9-0, 4/10/19

AYES: Rubio, Archuleta, Dodd, Galgiani, Glazer, Hueso, Mitchell, Portantino, Roth

NO VOTE RECORDED: Jones, Bates, Borgeas, Moorlach

SENATE JUDICIARY COMMITTEE: 7-0, 4/23/19

AYES: Jackson, Allen, Caballero, Monning, Stern, Umberg, Wieckowski

NO VOTE RECORDED: Borgeas, Jones

SENATE APPROPRIATIONS COMMITTEE: 4-0, 5/13/19

AYES: Portantino, Bradford, Hill, Wieckowski

NO VOTE RECORDED: Bates, Jones

SENATE FLOOR: 32-1, 5/29/19

AYES: Allen, Archuleta, Atkins, Bates, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NOES: Borgeas

NO VOTE RECORDED: Grove, Moorlach, Morrell, Nielsen, Stone

ASSEMBLY FLOOR: 61-4, 8/22/19 - See last page for vote

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

SOURCE: California Department of Insurance

DIGEST:

This bill reenacts and expands the insurer Supplier Diversity Survey, codifies the insurer Governing Board Diversity Survey, and establishes procedures for the California Department of Insurance (CDI) to administer both and publish the results.

Assembly Amendments make corrections and clarifications to the provisions that authorize an insurer in an insurance holding company to submit the diversity survey data in a single filing on behalf of the entire group of affiliated companies.

ANALYSIS: Existing law requires an insurer domiciled in this state to submit a Corporate Governance Annual Disclosure. Contents include the board’s duties, the insurer’s plans for developing CEO and senior management succession, a description of how the insurer recruits and elects members, including whether there is a diversity policy in place and how it functions, and other matters.

This bill:

1. Makes legislative findings and declarations that corporate leadership opportunities should be available to all Californians and that insurers are well positioned to have their boards of directors reflect the state’s diversity.
2. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts and results during the reporting period (“Supplier Diversity Survey”).
   1. Establishes the criteria for or defines minority, women, LGBT, veteran, and disabled veteran-owned businesses.
   2. Requires the report to include the insurer’s supplier diversity statement, outreach and communications efforts, and the appropriate contact information, as well as information about which procurements are made from minority, women, LGBT, and veteran business enterprises such as the total procurement contract dollars awarded, to the extent that information is readily accessible.
   3. Allows an insurer that does not enter into procurement contracts in California to satisfy the requirement by filing a statement to that effect.
   4. Penalizes noncompliant insurers up to $5,000 or, if the failure to comply is “willful,” $10,000.
   5. Requires CDI to publish each insurer’s reported supplier diversity information on the CDI Web site.
3. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI its efforts to increase diversity on its governing board and current demographic information about the board (“Governing Board Diversity Survey”).
   1. Requires the insurer to provide each board member with an opportunity to participate in the survey.
      1. Requires the insurer to notify board members that participation is voluntary and that the aggregate data for each category will be reported.
      2. Requires the insurer to collect the information using a standard form.
      3. Requires an insurer to maintain the anonymity of respondents and confidentiality of information.
   2. Prohibits CDI and any insurer from attempting to influence the board member’s decision to participate in any way.
   3. Requires CDI, by November 1 of the reporting year, to publish aggregated survey responses without identifying individual respondents or insurers.
   4. Provides that the data collected is confidential and prohibits CDI or an insurer from releasing the data under any circumstances, except as provided.
   5. Authorizes CDI to adopt regulations regarding the survey.
4. Provides that the surveys do not require quotas, set-asides, or preferences.
5. Permits an insurer that is a member of an insurance holding company to submit the required data for both surveys in a single filing on behalf of the entire group of affiliated companies.
6. Establishes the Insurance Diversity Task Force appointed by the Insurance Commissioner to recommend ways to increase procurement from diverse suppliers and increase diversity on insurer governing boards and assist the CDI in promoting outreach to insurance companies on those issues. Prohibits compensation to members, but allows reimbursement for expenses.

Background

This bill renews the Supplier Diversity Survey and codifies the Governing Board Diversity Survey. It also codifies the diversity task force that advises the Insurance Commissioner.

Supplier Diversity Survey. AB 53 (Solorio, Chapter 414, Statutes of 2012) codified the Supplier Diversity Survey, until January 1, 2019, which requires larger insurers to report to CDI the procurements they make from diverse suppliers (businesses owned by women, minorities, and disabled veterans). These suppliers may offer marketing, legal, information technology, and other services. According to the author, AB 53 has resulted in insurer procurement from diverse businesses to rise by 93%. This bill enacts an expanded version of that survey.

Governing Board Diversity Survey. This bill codifies, with some revisions, the Governing Board Diversity Survey, which CDI has been administering for the last several years. (For a more detailed discussion, see the Senate Insurance Committee Analysis.) This survey requires insurers to report the number of members on its governing board by sex and race/ethnicity, as well as those that publicly identify as LGBT. Aggregated results will be published on CDI’s Web site.

The author notes that in 2017 insurers across the state reported that nearly 80% of insurance company governing board seats were held by men and only 12% held by persons of color. Of the nearly 2,400 board seats, only 14 members self-identified as LGBT. Out of 792 insurance companies, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Assembly Appropriations Committee, this bill may result in costs to CDI of approximately $20,000 in 2020-21 and $10,000 ongoing to support the Insurance Diversity Take Force, including payment of reimbursable meeting expenses for task force members.

SUPPORT: (Verified 8/23/19)

California Department of Insurance (source)

AAA Appraisal Management Company, LLC

AP42, LLC

ARTEMIA Communications, Inc.

Asian Business Association

Asian Journal Publications, Inc.

Association of California Life and Health Insurance Companies

Black Business Association

California Asian Pacific Islander Chamber of Commerce

California Association of Micro Enterprise Opportunity

Carson Chamber of Commerce

Charles Jacobsen, Inc.

Community Connections, LLC

Consumer Attorneys of California

CSAA Insurance Group

Domar Companies, LLC

Dorsey Group LLC CA Leadership

DVBE Insurance & Financial Services, LLC

El Concilio of San Mateo County

El Mundo

Equality California

Fraser Communications

Fresno Metro Black Chamber of Commerce

Golden Gate Business Association

Greenlining Institute

Helenistic

ICE Safety Solutions

InSight Consulting Partners, Inc.

Impact Southern California CDC

Jesse Miranda Center for Hispanic

Latino Coalition for Community Leadership

Latino Coalition for a Healthy California

Leadership Education for Asian Pacifics

Los Angeles Business Council

Los Angeles Gay & Lesbian Chamber of Commerce

Los Angeles Latino Chamber of Commerce

Matthew K. Fust, Senior advisor to Out Leadership/Quorum

Macedonia CDC

National Diversity Coalition

National Asian American Coalition

National LGBT Chamber of Commerce

National Veteran Business Development Council

NORCAL Group

Oasis Center International

PFN Insurance Services

Rainbow Chamber of Commerce Silicon Valley

Riviera Advisors, Inc.

Sacramento Black Chamber of Commerce

Small Business Majority

State Compensation Insurance Fund

The East Los Angeles Community Union

TRINUS Corporation

Veterans in Business Network

Vasquez & Company, LLP

OPPOSITION: (Verified 8/23/19)

None received

ARGUMENTS IN SUPPORT: Numerous organizations support this bill because it fuels economic opportunities for diverse businesses. It also benefits insurers by having more of these companies compete for insurer business.

CDI explains that research shows that boards are better able to make informed decisions and carry out their fiduciary and other duties when they contain a diverse mix of members. Recent studies also indicate that companies with greater governing board diversity have stronger financial performance.

ASSEMBLY FLOOR: 61-4, 8/22/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Daly, Eggman, Friedman, Gabriel, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Maienschein, Mayes, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Wicks, Wood, Rendon

NOES: Brough, Kiley, Melendez, Obernolte

NO VOTE RECORDED: Choi, Diep, Flora, Fong, Frazier, Gallagher, Gray, Lackey, Low, Mathis, Patterson, Voepel, Waldron, Weber

Prepared by: Hugh Slayden / INS. / (916) 651-4110

8/23/19 13:58:14

**** END ****

SENATE THIRD READING

STR Bill Id:SB 534

Author:(Bradford)

As Amended Ver:July 3, 2019

Majority vote

SUMMARY:

Directs the Department of Insurance (DOI) to undertake a number of insurance diversity activities.

Major Provisions

Requires, in every even numbered year beginning in 2020, an insurer to report to the DOI its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts during the previous two years.

Requires, in every even numbered year beginning in 2020, an insurer to report to the DOI on its governing board and board diversity efforts during the previous two years.

Describes in statute the existing DOI Insurance Diversity Task Force.

COMMENTS:

The DOI established the Insurance Diversity Initiative in 2012. According to the DOI, the Initiative focuses on transparency and administers surveys to understand the state of supplier diversity and governing board diversity amongst insurers. DOI reports that between 2012 and 2015, insurers increased their procurement with California diverse businesses by $586.6 million. In 2016, DOI engaged with five other jurisdictions (Minnesota, New York, Washington, Oregon, and the District of Columbia) to generate a combined data call known as the Multi-State Insurance Diversity Survey (MIDS) to query insurers on a broader basis regarding their diversity efforts. That survey confirmed the notion that insurance industry leadership is composed overwhelmingly of white males. The survey results indicate that 80% of board members were male, 77% were white (6% - African American, 3% - Hispanic / Latino, 2% - Asian / Pacific Islander, 1% - Mixed Race), and 12 out of the over 2300 board members identified themselves as LGBT.

AB 53, Chapter 414, Statutes of 2012, was authored by Assemblyman Jose Solorio (who was then Chair of the Assembly Insurance Committee) to establish a mandatory data call regarding the demographic characteristics of suppliers used by California insurers. The bill was sponsored by the Greenlining Institute and was inspired by a similar program at the Public Utilities Commission. The bill applied the data call to insurers with more than $100 million in California premium and specified that the data be submitted every other year beginning in 2013, and established January 1, 2019 sunset date. The 2013 data call issued by the DOI included the vendor demographic categories included in AB 53 ("disabled veteran business enterprise", "minority business enterprise", and "women business enterprise"). The DOI expanded the categories beyond those provided for in AB 53 by adding "LGBT business enterprises" to the 2015 data call. The requirements of AB 53 expired on January 1, 2019 as prior legislative efforts to extend the sunset date (and make a number of the updates included in this bill) were not successful.

According to the Author:

A crucial piece of the Insurance Code has lapsed. Assembly Bill 53, enacted in 2012, expired on January 1, 2019. That bill highlighted the importance of diversity within the insurance industry, and the industry increased procurement from diverse businesses by 93% after its enactment. SB 534 re-enacts and updates the Supplier Diversity Survey that was required by AB 53 so that this important work can continue. SB 534 also codifies the Governing Board Diversity Survey which has been conducted by the commissioner since 2011. The results of prior surveys illustrated the lack of diversity on insurer governing boards. Out of 792 insurers, at least 13% reported zero women and 35% reported zero persons of color on their governing boards. Lastly, this bill creates a statutory mandate for the Insurance Commissioner's Insurance Diversity Task Force that will carry on the work of encouraging diversity in the insurance industry.

Arguments in Support:

This bill encourages competitive business procurement and governing board opportunities for all people by continuing the Insurance Supplier Diversity Survey, expanding diverse business categories to include LGBT-owned and veteran-owned business in addition to continuing minority, women, and disabled veteran-owned business categories, adding the Governing board Diversity Survey, and codifying the Insurance Diversity Task Force.

Arguments in Opposition:

None received.

FISCAL COMMENTS:

Costs to the California Department of Insurance of approximately $20,000 in 2020-21 and $10,000 ongoing to support the Insurance Diversity Take Force, including payment of reimbursable meeting expenses for task force members.

VOTES:

SENATE FLOOR: 32-1-5

YES: Allen, Archuleta, Atkins, Bates, Beall, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Pan, Portantino, Roth, Rubio, Skinner, Stern, Umberg, Wieckowski, Wiener, Wilk

NO: Borgeas

ABS, ABST OR NV: Grove, Moorlach, Morrell, Nielsen, Stone

ASM JUDICIARY: 9-2-1

YES: Mark Stone, Chau, Chiu, Gonzalez, Holden, Kalra, Maienschein, Petrie-Norris, Reyes

NO: Kiley, Obernolte

ABS, ABST OR NV: Gallagher

ASM INSURANCE: 12-0-2

YES: Daly, Berman, Bigelow, Calderon, Chen, Chu, Cooley, Cooper, Frazier, Gipson, Grayson, Kamlager-Dove

ABS, ABST OR NV: Mayes, Voepel

ASM APPROPRIATIONS: 13-3-2

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Maienschein, Petrie-Norris, Quirk, Robert Rivas

NO: Brough, Diep, Obernolte

ABS, ABST OR NV: Bigelow, Fong

UPDATED:

VERSION: July 3, 2019

CONSULTANT: Paul Riches / INS. / (916) 319-2086 FN: 0001399

Date of Hearing: August 14, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 534

Author:(Bradford) – As Amended Ver:July 3, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the California Department of Insurance (CDI) to require insurers to report on their supplier diversity and board member diversity, as well as efforts to increase diversity, and establishes a related task force to recommend to CDI methods to increase insurers’ procurement with diverse suppliers and to increase diversity on governing boards.

FISCAL EFFECT:

Costs to CDI of approximately $20,000 in 2020-21 and $10,000 ongoing to support the Insurance Diversity Take Force, including payment of reimbursable meeting expenses for task force members.

COMMENTS:

1. Purpose. According to the author, a prior bill established supplier diversity reporting, but was allowed to sunset in 2019. This bill reestablishes the requirement for insurers to report to the CDI its minority, women, LGBT, veteran and disabled veteran-owned business procurement efforts during the previous two years. It also codifies an existing Governing Board Diversity Survey, which has been conducted by the commissioner since 2011.
2. Background. CDI established the Insurance Diversity Initiative in 2012. It focuses on transparency and administers surveys to understand the state of supplier diversity and governing board diversity amongst insurers. In 2016, CDI engaged with five other jurisdictions to generate a combined survey known as the Multi-State Insurance Diversity Survey (MIDS) to query insurers on a broader basis regarding their diversity efforts. That survey confirmed the notion that insurance industry leadership is composed overwhelmingly of white males. The survey results indicate that 80% of board members were male, 77% were white (6% - African American, 3% - Hispanic / Latino, 2% - Asian / Pacific Islander, 1% - Mixed Race), and 12 out of the over 2,300 board members identified themselves as LGBT. Out of 792 insurers, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.
3. Prior Legislation. AB 53 (Solorio), Chapter 414, Statutes of 2012, establish a mandatory data call regarding the demographic characteristics of suppliers used by California insurers.

SB 488 (Bradford), of the 2017-18 Legislative Session, contained provisions similar to those in this bill and was held on the Suspense File of this committee.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: July 10, 2019

ASSEMBLY COMMITTEE ON INSURANCE

Tom Daly, Chair

SBPCA Bill Id:SB 534

Author:(Bradford) – As Amended Ver:July 3, 2019

SENATE VOTE: 32-1

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

SUMMARY: Authorizes the Department of Insurance (DOI) to issue vendor and board member diversity data calls. Specifically, this bill:

1. Requires, in every even numbered year beginning in 2020, an insurer to report to the DOI its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts during the previous two years.
2. Requires that the report include:
   1. The insurer’s supplier diversity statement;
   2. The insurer’s outreach and communications to minority, women, LGBT, veteran, and disabled veteran business enterprises;
   3. Information about which procurements are made from minority, women, LGBT, and veteran business enterprises with a headquarters’ address in California, and from disabled veteran business enterprises, to the extent the information is readily available; and
   4. Information related to total procurement contract dollars awarded, to the extent that information is readily accessible.
3. Provides that a failure to submit the report by the reporting deadline shall subject the insurer to a civil penalty of up to five thousand dollars ($5,000) and up to ten thousand dollars ($10,000) for a willful failure to submit the report.
4. Requires the DOI to publish each insurer’s reported vendor diversity information on the DOI website.
5. Requires, in every even numbered year beginning in 2020, an insurer to report to the DOI on its governing board and board diversity efforts during the previous two years.
6. Requires that the report include:
   1. The demographic makeup of the insurer’s governing board; and
   2. The insurer’s goals regarding board diversity, including outreach and communication strategies to diversify its board.
7. Provides that the information collected is confidential and is not to be released by the DOI.
8. Requires the DOI to publish the board diversity data in an aggregate form on the DOI website.
9. Requires the Insurance Commissioner (commissioner) to establish an Insurance Diversity Task Force (task force).
10. Requires the task force to include the following members who will serve staggered two year terms:
    1. The commissioner or the commissioner’s designee;
    2. Two members who are representatives in the insurance industry, one who is a practitioner in the field of supplier diversity, and one with expertise in governing board diversity;
    3. Two members who are representatives of a minority owned business enterprise;
    4. Two members who are representatives of a women owned business enterprise;
    5. A member who is a representative of a disabled veteran business enterprise or a veteran owned business enterprise;
    6. A member who is a representative of an LGBT owned business enterprise;
    7. Two members with expertise in the field of supplier diversity; and
    8. Two members with expertise in the field of governing board diversity.
11. Provides that the task force will:
    1. Advise and provide recommendations to the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry.
    2. Meet quarterly, or as deemed necessary by the commissioner.
    3. Assist the DOI in promoting and providing outreach to insurance companies that are actively engaged in supplier and governing board diversity issues.
12. Makes various findings and declarations related to the need for diversity in the insurance industry and the maintenance of personal privacy.

EXISTING LAW:

1. Required, beginning July 1, 2013, an insurer collecting at least $100 million in California premium to biennially respond to a supplier diversity data call.
2. Defined "disabled veteran business enterprise", "minority business enterprise", and "women business enterprise" for the purpose of the supplier diversity data call.
3. Required the supplier diversity data call response to include the insurer's supplier diversity policy and a description of the insurer's efforts to encourage the use of diverse suppliers.
4. Required the department to publish the results of the supplier diversity data call on its website.
5. Established a sunset date of January 1, 2019 for the supplier diversity data call.

FISCAL EFFECT: Undetermined

COMMENTS:

1. Purpose. According to the author, a crucial piece of the Insurance Code has lapsed. Assembly Bill 53, enacted in 2012, expired on January 1, 2019. That bill highlighted the importance of diversity within the insurance industry, and the industry increased procurement from diverse businesses by 93% after its enactment. SB 534 re-enacts and updates the Supplier Diversity Survey that was required by AB 53 so that this important work can continue. SB 534 also codifies the Governing Board Diversity Survey which has been conducted by the commissioner since 2011. The results of prior surveys illustrated the lack of diversity on insurer governing boards. Out of 792 insurers, at least 13% reported zero women and 35% reported zero persons of color on their governing boards. Lastly, this bill creates a statutory mandate for the Insurance Commissioner’s Insurance Diversity Task Force that will carry on the work of encouraging diversity in the insurance industry.
2. Insurance Diversity. The DOI established the Insurance Diversity Initiative in 2012. According to the DOI, the Initiative focuses on transparency and administers surveys to understand the state of supplier diversity and governing board diversity amongst insurers. DOI reports that between 2012 and 2015, insurers increased their procurement with California diverse businesses by $586.6 million. In 2016, DOI engaged with five other jurisdictions (Minnesota, New York, Washington, Oregon, and the District of Columbia) to generate a combined data call known as the Multi-State Insurance Diversity Survey (MIDS) to query insurers on a broader basis regarding their diversity efforts. That survey confirmed the notion that insurance industry leadership is composed overwhelmingly of white males. The survey results indicate that 80% of board members were male, 77% were white (6% - African American, 3% - Hispanic / Latino, 2% - Asian / Pacific Islander, 1% - Mixed Race), and 12 out of the over 2300 board members identified themselves as LGBT.
3. Diversity Data Calls. AB 53 (Statutes of 2012, Chapter 414) was authored by Assemblyman Jose Solorio (who was then Chair of the Assembly Insurance Committee) to establish a mandatory data call regarding the demographic characteristics of suppliers used by California insurers. The bill was sponsored by the Greenlining Institute and was inspired by a similar program at the Public Utilities Commission. The bill applied the data call to insurers with more than $100 million in California premium and specified that the data be submitted every other year beginning in 2013, and established January 1, 2019 sunset date. The 2013 data call issued by the DOI included the vendor demographic categories included in AB 53 ("disabled veteran business enterprise", "minority business enterprise", and "women business enterprise"). The DOI expanded the categories beyond those provided for in AB 53 by adding "LGBT business enterprises" to the 2015 data call. The requirements of AB 53 expired on January 1, 2019 as prior legislative efforts to extend the sunset date (and make a number of the updates included in this bill) were not successful.

REGISTERED SUPPORT / OPPOSITION:

Support

Department of Insurance

Association of California Life and Health Insurance Companies

Small Business California

Equality California

Fresno Metro Black Chamber of Commerce

Greenlining Institute

CSAA Insurance Group

California Asian Chamber of Commerce

Quorum

NORCAL Group

Insight Consulting Partners

AP 42

Los Angeles Gay and Lesbian Chamber of Commerce

State Fund

Opposition

None received

Analysis Prepared by: Paul Riches / INS. / (916) 319-2086

Date of Hearing: June 25, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 534

Author:(Bradford) – As Amended Ver:May 24, 2019

SENATE VOTE: 32-1

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

KEY ISSUES:

1. SHOULD THE STATUTORY AUTHORITY FOR THE DEPARTMENT OF INSURANCE’S Supplier Diversity Survey BE REIMPOSED ON A PERMANENT BASIS?
2. SHOULD THE DEPARTMENT OF INSURANCE REQUIRE ADMITTED INSURERS TO TRANSMIT VOLUNTARILY SELF-REPORTED DATA ABOUT THE DEMGRAPHICS OF THEIR GOVERNING BOARDS TO THE DEPARTMENT OF INSURANCE FOR THE PURPOSE OF DEVELOPING AN AGGREGATED REPORT ON INDUSTRY DIVERSITY?

SYNOPSIS

In 2011, then-Insurance Commissioner Dave Jones established the Insurance Diversity Initiative to study diversity issues in the insurance industry. In 2012, the Legislature codified this effort and mandated that insurers submit to the Department of Insurance specified information about supplier diversity programs. (AB 53 (Solorio) Chap. 414, Stats. 2012.) Despite the success of that program in highlighting the progress the industry is making to boost diversity of its suppliers, these reporting requirements expired in January 2019.

This non-controversial measure would restore the reporting requirements associated with the Insurance Diversity Initiative and enhance the reporting requirements to include a voluntary survey of insurance industry governing boards in order to better understand the demographics of key industry decision makers. Additionally, this measure would codify the Insurance Commissioner’s Insurance Diversity Task Force. In order to encourage parties to openly complete the demographic data surveys, this bill would protect the individualized survey data submitted to the Department of Insurance from public disclosure. In light of the aggregate data reporting requirements of this bill and the sensitive nature of the survey data, these protections appear appropriate.

This bill is sponsored by the Department of Insurance and Insurance Commissioner Ricardo Lara, and is supported by a coalition of minority chambers of commerce and other diversity advocates. The supporters highlight the success of the prior program and the opportunity this bill provides for growing opportunities for diverse business owners in the insurance industry. Following amendments in the Senate, this bill has no known opposition. This measure was approved by the Senate in a bi-partisan manner and should this bill be approved by this Committee, the bill will be heard by the Assembly Committee on Insurance.

SUMMARY: Requires insurance companies authorized to conduct business in the state to file various reports to the Insurance Commissioner detailing their minority-owned business enterprise procurement efforts and the diversity of the insurance company’s board. Specifically, this bill:

1. Requires, commencing on July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer, with California premiums written of one hundred million dollars ($100,000,000) or more, shall report to the commissioner on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts during the previous two years.
2. Provides that as a part of the report required pursuant to 1) the admitted insurer must provide:
   1. The insurers supplier diversity statement;
   2. The insurers outreach and communications to minority, women, LGBT, veteran, and disabled veteran business enterprises;
   3. Information about which procurements are made from minority, women, LGBT, and veteran business enterprises with a headquarters’ address in California, and from disabled veteran business enterprises, to the extent the information is readily available; and
   4. Information related to total procurement contract dollars awarded, to the extent that information is readily accessible.
3. Provides that nothing in 1) or 2) requires quotas, set-asides, or preferences in an admitted insurer’s procurement of goods or services, and does not apply to insurer producer or licensee contracts. Provides that admitted insurers retain the authority to use business judgment to select the supplier for a particular contract.
4. Provides that a failure to submit the report required by 1) by the reporting deadline, shall subject the admitted insurer to a civil penalty to be fixed by the Insurance Commissioner, not to exceed five thousand dollars ($5,000).
5. Provides that if the insurer has failed to report the information required by 1) within 30 days of a written notice by the Insurance Commissioner that the insurer has failed to report the information, the commissioner may find that the failure to report the information was willful and increase the civil penalty to an amount not to exceed ten thousand dollars ($10,000).
6. Provides that the insurer may request, and the Insurance Commissioner may grant, a 30-day extension to file the report required by 1) due to unintended or unforeseen delays.
7. Provides that by November 1 of the reporting year, the Insurance Commissioner must establish and maintain a link on the department’s internet website that provides public access to the contents of each admitted insurer’s reported information on minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts, and include a statement on the Department of Insurance’s internet website that the information on minority, women, LGBT, veteran, and disabled veteran-owned businesses posted for informational purposes only.
8. Requires commencing July 1, 2020, and biennially on July 1 of each even-numbered year thereafter, each admitted insurer with California premiums written of one hundred million dollars ($100,000,000) or more, shall report to the Insurance Commissioner on its governing board and board diversity efforts during the previous two years.
9. Provides that the report required by 8) must include:
   1. The demographic makeup of the insurers governing board; and
   2. The insurer’s goals regarding board diversity, including outreach and communication strategies to diversify its board.
10. Provides that an insurer shall collect the information and distribute a notice to board members a written disclosure prior to, or concurrently with, the survey. Provides that the disclosure shall notify the board member that the board member’s decision to disclose their demographic information is voluntary, that no adverse action may be taken against the board member or the insurer if the board member declines to participate in the survey, and that the aggregate data collected for each demographic category will be reported.
11. Provides that nothing in 9) or 10) requires quotas, set-asides, or preferences in regard to an admitted insurer’s governing board.
12. Provides that the information collected pursuant to 8) is confidential and is not to be released by the Department of Insurance except as provided in 13).
13. Requires, by November 1 of the reporting year, the Insurance Commissioner to establish and maintain a link on the Department of Insurance’s internet website that provides public access to the information submitted pursuant 8), in the aggregate and devoid of any specific identification of an individual respondent or insurer. Requires the Insurance Commissioner to include a statement that the information is provided for informational purposes only.
14. Requires the Insurance Commissioner to establish and appoint an Insurance Diversity Task Force.
15. Requires the task force established pursuant to 14) to include the following members who will serve staggered two year terms:
    1. The commissioner or the commissioner’s designee;
    2. Two members who are representatives in the insurance industry, one of whom shall, at the time of appointment, serve as a practitioner in the field of supplier diversity, and one of whom shall, at the time of appointment, have expertise in governing board diversity;
    3. Two members who are representatives of a minority business enterprise;
    4. Two members who are representatives of a women business enterprise;
    5. A member who is a representative of a disabled veteran business enterprise or a veteran business enterprise;
    6. A member who is a representative of an LGBT business enterprise;
    7. Two members with expertise in the field of supplier diversity; and
    8. Two members with expertise in the field of governing board diversity.
16. Provides that the task force will have all of the following duties:
    1. To advise and provide recommendations to the department on the best methods to increase procurement with diverse suppliers and to increase diversity on governing boards within the insurance industry;
    2. To meet quarterly, or as deemed necessary by the commissioner, or the commissioner’s designee; and
    3. Assist the Department of Insurance in promoting and providing outreach to insurance companies that are actively engaged in supplier and governing board diversity issues.
17. Provides that the members of the task force shall not receive compensation from the state for their services but may be reimbursed for their actual and necessary expenses incurred in connection with attending a task force meeting.
18. Makes various findings and declarations related to the need for diversity in the insurance industry and the maintenance of personal privacy.

EXISTING LAW:

1. Provides the Insurance Commissioner access to a summary of an insurer or insurance group’s corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer’s corporate governance framework and outline the requirements for completing a corporate governance annual disclosure with the Insurance Commissioner. (Insurance Code Section 936.1.)
2. Requires an insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the Insurance Commissioner a Corporate Governance Annual Disclosure document. (Insurance Code 936.3 (a).)
3. Provides that all documents, materials, or other information in the possession or control of the Department of Insurance that are obtained by, created by, or disclosed to, the Insurance Commissioner pursuant to 1) and 2) are trade secrets, confidential, and prohibited from being disclosed. (Insurance Code Section 936.6.)
4. Imposes a fee on an insurer or insurance group that fails, without good cause, to submit their Corporate Governance Annual Disclosure document. (Insurance Code Section 936.8.)
5. Authorizes the Insurance Commissioner to collect a late filing fee of seven hundred five dollars ($705) from any admitted insurer that fails to make and file in the commissioner’s office within the time prescribed by law any statements or stipulations required by law, including the disclosures contained in a Corporate Governance Annual Disclosure document. After the first month, the Insurance Commissioner shall also collect a late filing fee of eight hundred forty-nine dollars ($849) for each and every month or fractional part of a month thereafter that the insurer continues to transact the business of insurance until those statements and stipulations are filed. (Insurance Code Section 924.)
6. Requires, until January 1, 2020, each admitted insurer with premiums written equal to or in excess of $100 million to provide information to the Insurance Commissioner on all of its community development investments, community development infrastructure investments, and green investments in California and requires the Department of Insurance to post information regarding those investments on its website, as specified. (Insurance Code Section 926.2.)
7. Provides that the acts and orders of the Insurance Commissioner are subject to such review, or other action by a court of competent jurisdiction, as is permitted or authorized by law. (Insurance Code Section 12940.)
8. Provides for an administrative review process whereby parties can contest the decisions of state agencies. (Government Code Section 11500 et seq.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: Beginning in 2011, then-Insurance Commissioner Dave Jones created the Insurance Diversity Initiative, within the Department of Insurance (Department), whereby the Department collected information from insurance companies regarding the industry’s procurement contracting with minority, women, and disabled-veteran-owned businesses. This program was formally codified a year later, but the statute authorizing the program expired, pursuant to a sunset provision in the law, on January 1, 2019. This bill seeks to reimpose, expand, and make permanent the reporting to the Department regarding minority business procurement. Additionally, this bill proposes additional reporting regarding the diversity of the corporate board of California’s insurance carriers. In support of this bill the author states:

A crucial piece of California’s Insurance Code has lapsed. AB 53, from 2012, highlighted the importance of diversity within the insurance industry and resulted in insurer procurement from diverse businesses to rise by 93%. Specifically, AB 53 required insurers to report their procurement efforts from minority-, women-, and disabled veteran-owned businesses. Unfortunately, AB 53 sunset on January 1, 2019. SB 534 reestablishes this Supplier Diversity Survey to ensure procurement data from diverse suppliers continues to be collected and used to yield positive results. SB 534 also updates the survey to include historically excluded communities, such as the LGBT community.

SB 534 builds upon our state’s efforts by adding the Governing Board Diversity Survey, helping ensure that California diversity is reflected at the highest levels of governance. Started in 2011, the survey illustrated the deficiency in diverse management. Out of 792 insurers, at least 13% reported zero women and 35% reported zero persons of color on their governing boards. Finally, SB 534 codifies the Insurance Diversity Task Force that will assist CDI in encouraging diversity in the industry. Without the surveys and task force, meaningful data will not be collected and diverse representation in the industry will fall by the wayside.

It appears that the Insurance Diversity Initiative successfully promoted diversity in the insurance industry. The Insurance Diversity Initiative was implemented with the goal of increasing supplier diversity in the insurance industry. Although it is not clear the degree to which the Department’s increased focus on diversity pushed the industry, the Department’s data highlights meaningful increases in the diversity of suppliers working with the insurance industry since the Department’s Diversity Initiative program began. For example, in 2017, the Department noted that insurance carriers were spending $1.6 billion on goods and services obtained from businesses owned by underrepresented groups, a $670 million increase from the time that the Department started the Insurance Supplier Diversity Program. (Insurance industry increases spending with California diverse suppliers by nearly $670 million (2017) California Department of Insurance, available at http://www.insurance.ca.gov/0400-news/0100-press-releases/archives/release132-17.cfm.)

Despite the progress made by the insurance industry, ongoing oversight remains critical. While the industry’s efforts may continue whether or not the Insurance Diversity Initiative remains in place, the data tracking that was associated with the program helps policy makers guide efforts to increase business diversity across a range of industries. To that end, the Department created the Insurance Diversity Task Force to oversee the industry and develop strategies for continuing efforts to improve supplier diversity in the insurance field.

This bill. Recognizing the importance of maintaining a focus on diversity in the insurance industry, this bill would reauthorize the Department’s collection of supplier diversity data. Furthermore, this bill expands upon the former Insurance Diversity Initiative program by collecting additional data: information about the make-up of insurance companies’ boards of directors though the use of voluntary, self-reporting surveys. The bill requires all of the survey data to be updated biennially in order to track progress over time, and mandates that the Department post the aggregated data on its website biennially. Regarding the individualized data, this bill provides that the information is private and not subject to public disclosure. Finally, this bill proposes to formally codify the fifteen member Insurance Diversity Task Force that advises and assists the Department in promoting diversity in the insurance industry.

Ensuring due process in the imposition of civil penalties. This bill provides for the imposition of civil penalties up to $5,000 in the event an insurer fails to file information regarding their supplier diversity programs in a timely manner. If the Department sends an insurer notice of their noncompliance, and the insurer fails to submit the information within 30 days of receiving such notice, the Department may deem the failure to comply with the law willful and impose a $10,000 penalty. It should be noted that these penalties are significantly higher than the penalties imposed on insurers for failure to submit most required filings to the Department.

Nonetheless, insurers are not without recourse should they believe that a civil penalty were wrongfully imposed. This bill provides that an insurer may seek administrative review of the penalty in a manner consistent with existing law for reviewing an agency’s decision-making before an administrative law judge, or may seek to have the penalty reviewed in court. Both provisions appear to provide ample avenues for review of the Department’s imposition of a civil penalty, thus negating any concerns arising from the size of the penalties proposed by this bill.

Ensuring board members’ privacy will likely improve survey results. In addition to reviving the Department’s authority to collect data on supplier diversity, this bill also proposes a new provision: the collection of voluntarily submitted data regarding the demographic make-up of the boards of directors of the companies regulated by the Department. The data that the Department is seeking to collect is very similar to data collected by other state regulatory agencies, as well as information that the state collects about its own staff. Of note to this Committee, the data collection proposed by this bill is very similar to the reports regarding the demographic of the judiciary compiled annually by the Judicial Council.

Similar to the Judicial Council’s data collection, this bill proposes that the data collection be voluntary. Additionally, this bill proposes significant privacy provisions that would exempt the data from most public disclosure, other than the aggregated data report by the Department. Although this Committee tends to strongly disfavor any restriction on the public’s access to records submitted to government agencies, the provisions in this bill appear appropriate given the voluntary nature of the reported information. The Department noted to this Committee that ensuring that respondents can be confident in the privacy of their data is likely to boost response rates. Furthermore, the most valuable information for the public is the aggregated data about diversity on corporate boards, which is required to be released to the public pursuant to the bill. Understanding whether an individual board member identifies as African American or LGBTQ is of comparatively less public value than the industry-wide data. Accordingly, because the public record restrictions in this bill are limited to the provisions regarding the voluntarily reported demographic data of board members and the individualized responses that are utilized to generate that data, the restriction appears to be appropriate.

ARGUMENTS IN SUPPORT: This bill is sponsored by the Department of Insurance and Insurance Commissioner Ricardo Lara. The bill is also supported by a coalition of minority chambers of commerce from across the state. In support of the bill, Insurance Commissioner Lara writes:

This bill encourages competitive business procurement and governing board opportunities for all people by continuing the Insurance Supplier Diversity Survey, expanding diverse business categories to include LGBT-owned and veteran-owned business in addition to continuing minority, women, and disabled veteran-owned business categories, adding the Governing board Diversity Survey, and codifying the Insurance Diversity Task Force.

I believe the impact of supplier diversity leads to great economic benefits for California. In particular, when diverse suppliers receive contracts from corporations, they in turn, put wealth back into their communities which fosters greater economic development.

Diversifying insurer governing boards to reflect a broader set of backgrounds and perspectives remains a challenge. In 2017, insurers reported that nearly 80 percent of governing board seats were held by men and only 12 percent of board seats were held by persons of color. Out of 792 companies that reported, at least 100 companies lacked women on their governing board, and 280 insurance companies reported zero persons of color on their governing boards.

REGISTERED SUPPORT / OPPOSITION:

Support

Department of Insurance, Insurance Commissioner Ricardo Lara (Sponsor)

AP 42

Association of California Life & Health Insurance Companies

California Asian Pacific Islander Chamber of Commerce

CSAA Insurance Group

Equality California

Fresno Black Metro Chamber of Commerce

Insight Consulting Partners, Inc.

Los Angeles Gay & Lesbian Chamber of Commerce

NorCal Group

State Compensation Insurance Fund

The Greenlining Institute

Quorum

Opposition

None on file

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334

 THIRD READING  

Bill No: SB 534

Author: Bradford (D)

Amended: 5/24/19

Vote: 21

SENATE INSURANCE COMMITTEE: 9-0, 4/10/19

AYES: Rubio, Archuleta, Dodd, Galgiani, Glazer, Hueso, Mitchell, Portantino, Roth

NO VOTE RECORDED: Jones, Bates, Borgeas, Moorlach

SENATE JUDICIARY COMMITTEE: 7-0, 4/23/19

AYES: Jackson, Allen, Caballero, Monning, Stern, Umberg, Wieckowski

NO VOTE RECORDED: Borgeas, Jones

SENATE APPROPRIATIONS COMMITTEE: 4-0, 5/13/19

AYES: Portantino, Bradford, Hill, Wieckowski

NO VOTE RECORDED: Bates, Jones

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

SOURCE: California Department of Insurance

DIGEST:

This bill reenacts and expands the insurer Supplier Diversity Survey and codify the insurer Governing Board Diversity Survey administered by the California Department of Insurance (CDI).

Senate Floor Amendments of 5/24/19 require that a standard form be used for the survey, as specified by CDI; require insurers to collect and transmit information in a way that does not identify individual participants; and require CDI to report aggregated data without identifying the individual or insurer. Amendments also expressly grant CDI the authority to promulgate regulations regarding the survey.

ANALYSIS: Existing law requires an insurer domiciled in this state to submit a Corporate Governance Annual Disclosure. Contents include the board’s duties, the insurer’s plans for developing CEO and senior management succession, a description of how the insurer recruits and elects members, including whether there is a diversity policy in place and how it functions, and other matters.

This bill:

1. Makes legislative findings that corporate leadership opportunities should be available to all Californians and that insurers are well positioned to have their boards of directors reflect the state’s diversity.
2. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts and results during the reporting period (“Supplier Diversity Survey”).
   1. Establishes the criteria for or defines minority, women, LGBT, veteran, and disabled veteran-owned businesses.
   2. Requires the report to include the insurer’s supplier diversity statement, outreach and communications efforts, and the appropriate contact information, as well as information about which procurements are made from minority, women, LGBT, and veteran business enterprises such as the total procurement contract dollars awarded, to the extent that information is readily accessible.
   3. Allows an insurer that does not enter into procurement contracts in California to satisfy the requirement by filing a statement to that effect.
   4. Penalizes noncompliant insurers up to $5,000 or, if the failure to comply is “willful,” $10,000.
3. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI its efforts to increase diversity on its governing board and current demographic information about the board (“Governing Board Diversity Survey”).
   1. Requires the insurer to provide each board member with an opportunity to participate in the survey.
      1. Requires the insurer, prior to or along with the survey, to provide a written disclosure notifying board members that participation is voluntary and that the aggregate data for each demographic category will be reported.
      2. Requires the insurer to collect the information using a standard form specified by CDI.
      3. Requires an insurer to collect and transmit survey information in a way that maintains the anonymity of respondents and confidentiality of information.
   2. Prohibits CDI and any insurer from attempting to influence the board member’s decision to participate in any way.
   3. Requires CDI, by November 1 of the reporting year, to publish the information submitted on its website.
      1. Requires CDI to publish aggregated survey responses without identifying individual respondents or insurers.
      2. Requires CDI to include a statement that the information is for informational purposes only.
   4. Provides that the data collected is confidential and prohibits CDI or an insurer from releasing the data under any circumstances, except as provided.
   5. Authorizes CDI to adopt regulations regarding the survey.
4. Provides that the survey provisions of the bill do not require quotas, set-asides, or preferences.
5. Establishes the Insurance Diversity Task Force comprised of at least 13, but not more than 15, members appointed by the Insurance Commissioner that meets at least quarterly.
   1. Provides that the Task Force shall recommend the best methods to increase procurement with diverse suppliers and increase diversity on the governing board within the insurance industry and assist the CDI in promoting outreach to insurance companies on those issues.
   2. Prohibits compensation to members, but allows reimbursement for expenses.

Background

This bill renews the Supplier Diversity Survey and codifies the Governing Board Diversity Survey. It also codifies that a diversity task force that advises the Insurance Commissioner.

Supplier Diversity Survey. AB 53 (Solorio, Chapter 414, Statutes of 2012) codified the Supplier Diversity Survey, until January 1, 2019, which requires larger insurers to report to CDI the procurements they make from diverse suppliers (businesses owned by women, minorities, and disabled veterans). These suppliers may offer marketing, legal, information technology, and other services. According to the author, AB 53 has resulted in insurer procurement from diverse businesses to rise by 93%. This bill enacts an expanded version of that survey.

Governing Board Diversity Survey. This bill codifies, with some revisions, the Governing Board Diversity Survey which CDI has been administering for the last several year. (For a more detailed discussion, see the Senate Insurance Committee Analysis.) This survey requires insurers to report the number of members on its governing board by sex and race/ethnicity, as well as those that publicly identify as LGBT. Aggregated results will published on CDI’s website.

The author notes that in 2017 insurers across the state reported that nearly 80% of insurance company governing board seats were held by men and only 12% held by persons of color. Of the nearly 2,400 board seats, only 14 members self-identified as LGBT. Out of 792 insurance companies, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

Recent amendments address concerns raised in committee and all opposition has been removed.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, this bill would result in minor costs, likely less than $50,000 to CDI for revising its conflict of interest regulations. This would also cover reimbursing the annual costs associated with expenses for attending the quarterly meetings. (Insurance Fund)

SUPPORT: (Verified 5/24/19)

California Department of Insurance (source)

AAA Appraisal Management Company, LLC

AP42, LLC

ARTEMIA Communications, Inc.
Asian Business Association
Asian Journal Publications, Inc.

Association of California Life and Health Insurance Companies

Black Business Association
California Asian Pacific Islander Chamber of Commerce
California Association of Micro Enterprise Opportunity
Carson Chamber of Commerce
Charles Jacobsen, Inc.
Community Connections, LLC
Consumer Attorneys of California

Domar Companies, LLC

Dorsey Group LLC CA Leadership

DVBE Insurance & Financial Services, LLC

El Concilio of San Mateo County

El Mundo

Equality California

Fraser Communications

Fresno Metro Black Chamber of Commerce
Golden Gate Business Association

Greenlining Institute

Helenistic

ICE Safety Solutions

InSight Consulting Partners, Inc.
Impact Southern California CDC
Jesse Miranda Center for Hispanic
Latino Coalition for Community Leadership

Latino Coalition for a Healthy California
Leadership Education for Asian Pacifics
Los Angeles Gay & Lesbian Chamber of Commerce

Los Angeles Latino Chamber of Commerce

Matthew K. Fust, senior advisor to Out Leadership/Quorum

Macedonia CDC
National Diversity Coalition

National Asian American Coalition
National LGBT Chamber of Commerce
National Veteran Business Development Council
NORCAL Group
Oasis Center International
PFN Insurance Services
Rainbow Chamber of Commerce Silicon Valley

Rainbow PAC

Riviera Advisors, Inc.
Sacramento Black Chamber of Commerce

Small Business Majority
State Compensation Insurance Fund

The East Los Angeles Community Union

TRINUS Corporation

Veterans in Business Network

Vasquez & Company, LLP

OPPOSITION: (Verified 5/24/19)

None received

ARGUMENTS IN SUPPORT: Numerous organizations support this bill because it fuels economic opportunities for diverse businesses. It also benefits insurers by having more of these companies compete for insurer business.

CDI explains that research shows that boards are better able to make informed decisions and carry out their fiduciary and other duties when they contain a diverse mix of members. Recent studies also indicate that companies with greater governing board diversity have stronger financial performance

Prepared by: Hugh Slayden / INS. / (916) 651-4110

5/28/19 16:19:28

**** END ****

 THIRD READING  

Bill No: SB 534

Author: Bradford (D)

Amended: 4/30/19

Vote: 21

SENATE INSURANCE COMMITTEE: 9-0, 4/10/19

AYES: Rubio, Archuleta, Dodd, Galgiani, Glazer, Hueso, Mitchell, Portantino, Roth

NO VOTE RECORDED: Jones, Bates, Borgeas, Moorlach

SENATE JUDICIARY COMMITTEE: 7-0, 4/23/19

AYES: Jackson, Allen, Caballero, Monning, Stern, Umberg, Wieckowski

NO VOTE RECORDED: Borgeas, Jones

SENATE APPROPRIATIONS COMMITTEE: 4-0, 5/13/19

AYES: Portantino, Bradford, Hill, Wieckowski

NO VOTE RECORDED: Bates, Jones

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

SOURCE: California Department of Insurance

DIGEST:

This bill reenacts and expands the insurer Supplier Diversity Survey and codifies the insurer Governing Board Diversity Survey administered by the California Department of Insurance (CDI).

ANALYSIS: Existing law requires an insurer domiciled in this state to submit a Corporate Governance Annual Disclosure to CDI that includes information required by the National Association of Insurance Commissioners Model Regulation. (Ins. Code Section 936.1 et seq.) Contents include the board’s duties, the insurer’s plans for developing CEO and senior management succession, a description of how the insurer recruits and elects members, including whether there is a diversity policy in place and how it functions, and other matters.

This bill:

1. Makes legislative findings that corporate leadership opportunities should be available to all Californians and that insurers are well positioned to have their boards of directors reflect the state’s diversity.
2. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts and results during the reporting period (“Supplier Diversity Survey”).
   1. Establishes the criteria for or defines minority, women, LGBT, veteran, and disabled veteran-owned businesses.
   2. Requires the report to include the insurer’s supplier diversity statement, outreach and communications efforts, and the appropriate contact information, as well as information about which procurements are made from minority, women, LGBT, and veteran business enterprises such as the total procurement contract dollars awarded, to the extent that information is readily accessible.
   3. Allows an insurer that does not enter into procurement contracts in California to satisfy the requirement by filing a statement to that effect.
   4. Penalizes noncompliant insurers up to $5,000 or, if the failure to comply is “willful,” $10,000.
3. Requires, starting July 1, 2020, an insurer with California written premiums of $100 million or more, to report biennially to CDI its efforts to increase diversity on its governing board and current demographic information about the board (“Governing Board Diversity Survey”).
   1. Requires the insurer to provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting related demographic information and requires the insurer to provide a written disclosure to each member providing notice that participation is voluntary and that the aggregate data for each demographic category will be reported.
   2. Prohibits CDI and any insurer from attempting to influence the board member’s decision to participate in any way.
   3. Requires CDI, by November 1 of the reporting year, to publish each insurer’s report on its website and requires notice that the information is for informational purposes only.
   4. Provides that the data collected is confidential and prohibits CDI or an insurer from releasing the data under any circumstances, except as provided.
4. Provides that the survey provisions of the bill do not require quotas, set-asides, or preferences.
5. Establishes the Insurance Diversity Task Force comprised of at least 13, but not more than 15, members appointed by the Insurance Commissioner that meets at least quarterly.
   1. Provides that the Task Force shall recommend the best methods to increase procurement with diverse suppliers and increase diversity on the governing board within the insurance industry and assist the CDI in promoting outreach to insurance companies on those issues.
   2. Prohibits compensation to members, but allows reimbursement for expenses.

Background

This bill renews or codifies two diversity surveys administered by CDI and codifies a diversity task force that advises the Insurance Commissioner.

Supplier Diversity Survey. AB 53 (Solorio, Chapter 414, Statutes of 2012) codified the Supplier Diversity Survey, until January 1, 2019, which requires larger insurers to report to CDI the procurements they make from diverse suppliers (businesses owned by women, minorities, and disabled veterans). These suppliers may offer marketing, legal, information technology, and other services. According to the author, AB 53 has resulted in insurer procurement from diverse businesses to rise by 93%. This bill enacts an expanded version of that survey.

Governing Board Diversity Survey. CDI has been issuing the Governing Board Diversity Survey for the last several years without express statutory authority. This survey requires insurers to report the number of members on its governing board by sex and race/ethnicity, as well as those that publicly identify as LGBT. Results are published by insurer on CDI’s Web site. This bill codifies that survey, except that it does not detail what demographic information is required.

The author notes that in 2017 insurers across the state reported that nearly 80% of insurance company governing board seats were held by men and only 12% held by persons of color. Of the nearly 2,400 board seats, only 14 members self-identified as LGBT. Out of 792 insurance companies, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

Concerns were raised about the way CDI collected the data and published the results. (See the Senate Insurance Committee analysis for a detailed discussion.) Specific issues raised include how the data would be collected, notice to participating individuals on how the data will be used, and confidentiality of the data.

Amendments taken in Senate Judiciary Committee addressed those concerns and require the insurer to provide a written disclosure to the participating individuals. The disclosure notifies each surveyed individual that participation is voluntary and that the aggregate data collected for each demographic category will reported. Amendments also clarified that any data collected remains confidential and may not be released by CDI or an insurer, except as provided in this bill.

Concerns were also raised that CDI should not publish personal information in a manner that would link information to an individual. Prior versions of the survey attempted to do this by publishing the data without the names, but grouping the data by insurer. Insurance trade associations opposing the bill are concerned that by grouping the data by insurer it has a higher probability of being matched to a particular individual. Stakeholder discussion are ongoing as to how best to report the data in a manner that protects individual privacy. Nothing in this bill exempts CDI from laws governing the release of personal information by state agencies, such as the Privacy and the Information Practices Act of 1977 (Civil Code §§ 1798 et seq.).

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, this bill would result in minor costs, likely less than $50,000 to CDI for revising its conflict of interest regulations. This would also cover reimbursing the annual costs associated with expenses for attending the quarterly meetings. (Insurance Fund)

SUPPORT: (Verified 5/15/19)

California Department of Insurance (source)

AAA Appraisal Management Company, LLC

AP42, LLC

ARTEMIA Communications, Inc.
Asian Business Association
Asian Journal Publications, Inc.

Black Business Association
California Asian Pacific Islander Chamber of Commerce
California Association of Micro Enterprise Opportunity
Carson Chamber of Commerce
Charles Jacobsen, Inc.
Community Connections, LLC
Consumer Attorneys of California

Domar Companies, LLC

Dorsey Group LLC CA Leadership

DVBE Insurance & Financial Services, LLC

El Concilio of San Mateo County

El Mundo

Equality California

Fraser Communications

Fresno Metro Black Chamber of Commerce
Golden Gate Business Association

Greenlining Institute

Helenistic

ICE Safety Solutions

InSight Consulting Partners, Inc.
Impact Southern California CDC
Jesse Miranda Center for Hispanic
Latino Coalition for Community Leadership

Latino Coalition for a Healthy California
Leadership Education for Asian Pacifics
Los Angeles Gay & Lesbian Chamber of Commerce

Los Angeles Latino Chamber of Commerce

Macedonia CDC
National Diversity Coalition

National Asian American Coalition
National LGBT Chamber of Commerce
National Veteran Business Development Council
NORCAL Group
Oasis Center International
PFN Insurance Services
Rainbow Chamber of Commerce Silicon Valley

Rainbow PAC

Riviera Advisors, Inc.
Sacramento Black Chamber of Commerce

Small Business Majority
State Compensation Insurance Fund

The East Los Angeles Community Union

TRINUS Corporation

Vasquez & Company, LLP

Veterans in Business Network

OPPOSITION: (Verified 5/15/19)

Association of California Life and Health Insurance Companies
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California

ARGUMENTS IN SUPPORT: Numerous organizations support this bill because it fuels economic opportunities for diverse businesses. It also benefits insurers by having more of these companies compete for insurer business. They also believe that the diversity of California consumers should be reflected in board leadership and suggest that the transparency of surveys is critical to assessing and measuring the progress of diversifying governing boards.

CDI explains that research shows that boards are better able to make informed decisions and carry out their fiduciary and other duties when they contain a diverse mix of members. Recent studies also indicate that companies with greater governing board diversity have stronger financial performance. Board diversity has been associated with improved competitiveness and talent management, greater access to capital, and better relations with stakeholders.

ARGUMENTS IN OPPOSITION: Several insurance trade associations express support for the Supplier Diversity Survey, but raise concerns about the Governing Board Diversity Survey. In particular, they raise concerns that practice of reporting on a very small population of individuals makes it easy to cross-reference the collected data with other public information which may lead to the unintended publication of confidential information irrespective of the individual’s desire. They further argue that neither the National Association of Insurance Commissioners nor any California law require the publishing of such confidential identifying information for public consumption. Under NAIC Corporate Governance Annual Disclosure Model Act, which California has adopted, corporate governance structure, policies, and practices, including whether there is a board diversity policy in place and how it functions, are available to the regulator. The industry strongly believes that collected board information of this nature should be made on a protected and purely voluntary basis to the CDI, and only if known, permitted, and self-reported. In addition, the trade associations recommend that the CDI develop a standardized form that all companies could provide to survey participant requesting this sensitive information.

Prepared by: Hugh Slayden / INS. / (916) 651-4110

5/15/19 16:23:55

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

SB 534 (Bradford) - Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

Bill Summary:

SB 534 would reenact and expand the insurer Supplier Diversity Survey and codify the insurer Governing Diversity Survey administered by the California Department of Insurance (CDI).

Fiscal Impact:

• Minor costs, likely less than $50,000 to CDI for revising CDI’s Conflict of Interest Code regulations in order to codify the Insurance Diversity Task Force. This would also cover reimbursing the annual costs associated with expenses for attending the quarterly meetings. (Insurance Fund)

Background:

In 2011, then Insurance Commissioner (IC) Dave Jones issued a voluntary survey to insurers regarding their purchases from diverse suppliers and the demographic make-up of their governing boards. AB 53 (Solorio, Chapter 414, Statutes of 2012) codified the supplier diversity survey, but not the governing board survey. Current law does not include LGBT- and veteran-business enterprises.

In 2013 and 2015, CDI issued the diversity survey, and in 2014, issued a governing board survey. In 2016, CDI and five other states established and issued the Multistate Diversity Survey, which expanded the data reported, included LGBT-owned vendors, and included the governing board survey.

Until January 1, 2019, admitted insurers with written premiums equal to or in excess of $100 million were required to submit to the IC a supplier diversity report on their minority, women, and disabled veteran business enterprise procurement efforts, and subjected an insurer to a civil penalty for failure to file the report. SB 488 (Bradford, 2017) would have, among other things, extended the sunset date of the supplier diversity report, but the bill was held in the Assembly Appropriations Committee. This bill would reenact the supplier diversity program as it existed prior to January 1, 2019, and expand the program to also require admitted insurers to report information on procurement from veteran and LGBT business enterprises in addition to minority, women, and disabled veteran business enterprise procurement efforts.

Proposed Law:

This bill would reenact and expand the insurer Supplier Diversity Survey and codify the insurer Governing Diversity Survey administered by CDI. Specifically, this bill would:

• Require an insurer with California written premiums of $100 million or more, starting July 1, 2020, and biennially thereafter, to report to CDI on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts and results during the reporting period;
• Authorize an insurer that does not enter into procurement contracts in California to satisfy the reporting requirements by filing a statement to that effect;
• Provide that failure to file the report shall subject the admitted insurer to a civil penalty of up to $5,000, or, if the penalty was willful, up to $10,000;
• Require an insurer with California written premiums of $100 million or more, starting July 1, 2020, and biennially thereafter to report to CDI on its efforts to increase diversity on its governing board and current demographic information about the board;
• Require the insurer to provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting related demographic information;
• Require CDI, by November 1 of the reporting year, to publish each insurer’s report on its website and requires notice that the information is for informational purposes only;
• Establish the Insurance Diversity Task Force of 13 to 15 members that meets at least quarterly and recommends the best methods to increase procurement with diverse suppliers and increase diversity on the governing board within the insurance industry, and assists CDI in promoting outreach to insurance companies on those issues. Compensation to members would be prohibited, but reimbursement for expenses would be authorized;
• Require CDI to review conflict of interest regulations to ensure that each task force member is required to disclose conflicts of interest.

Related Legislation:

SB 826 (Jackson, Chapter 954, Statutes of 2018) required each publicly held corporation whose principal executive offices are located in California to have a minimum number of women on its board of directors, as specified.

SB 488 (Bradford, 2017) would have renewed and broadened the Supplier Diversity Survey and codified the Governing Board Diversity Survey and would have authorized the Department to issue data calls and surveys relating to core function of the Department via emergency regulations. The measure was held in the Assembly Appropriations Committee.

AB 601 (Ridley-Thomas, 2017) would have renewed and broadened the Supplier Diversity Survey, codified the Governing Board Diversity Survey and would have authorized the Department to issue data calls and surveys relating to core function of the Department of Insurance via emergency regulations. The measure was held in the Assembly Appropriations Committee.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: SB 534 (Author:Bradford)

Version: March 28, 2019

Hearing Date: April 23, 2019

Fiscal: Yes

Urgency: No

Consultant: AM

SUBJECT

Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

DIGEST

This bill requires an admitted insurer with California written premiums of $100 million or more to submit a report to the Insurance Commissioner (Commissioner) on its minority, women, LGBT, veteran, and disabled veteran business enterprise procurement efforts and governing board diversity efforts, as specified. The bill also requires the California Department of Insurance (CDI) to make that information publicly available on its website, codifies the Insurance Diversity Task Force, and makes various legislative findings and declarations.

EXECUTIVE SUMMARY

In 2011, then Commissioner Dave Jones established the Insurance Diversity Initiative (IDI) to focus on diversity issues in the insurance industry, including establishing the Insurance Diversity Task Force and issuing a voluntary survey to insurers regarding their supplier diversity and governing board diversity. AB 53 (Solorio, Ch. 414, Stats. 2012) codified the supplier diversity survey; however, those provisions sunset on January 1, 2019. This bill seeks to reenact the supplier diversity survey and expand it to also include veteran and LGBT business enterprises, codify the Insurance Diversity Task Force, and enact governing board diversity reporting requirements for insurers with written premiums of $100 million or more.

The bill is sponsored by Insurance Commissioner Ricardo Lara and is supported by various business and other organizations. The bill is opposed unless amended by a coalition of organizations representing insurers doing business in California. The bill passed the Senate Insurance Committee on a vote of 9-0.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes the CDI, which is headed by the Commissioner, to regulate specified insurers and insurance practices in this state. (Ins. Code § 100 et. seq.)
2. Requires an insurer to submit to the CDI by June 1st of each calendar year a Corporate Governance Annual Disclosure (CGAD) containing certain information regarding the insurer’s corporate governance. (Ins. Code § 936.3.)
   1. Provides that all documents, materials, or other information in the possession or control of CDI that are obtained by, created by, or disclosed to, the Commissioner pursuant to these provisions are trade secrets, confidential, and prohibited from being disclosed. (Ins. Code § 936.6.)
   2. Makes a failure to file the CGAD punishable by a late filing fee. (Ins. Code § 936.8.)
3. Requires, until January 1, 2020, each admitted insurer with premiums written equal to or in excess of $100 million to provide information to the Commissioner on all of its community development investments, community development infrastructure investments, and green investments in California and requires the CDI to post information regarding those investments on its website, as specified. (Ins. Code § 926.2.)

This bill:

1. Makes various findings and declarations of the Legislature, including the following:
   1. It is in the state’s interest to encourage competitive business opportunities and corporate leadership opportunities for all its people;
   2. Insurers are uniquely positioned to build relationships in the communities they serve through the development, inclusion, and utilization of certified minority, women, LGBT, veteran, and disabled veteran-owned business enterprises whenever possible; and
   3. Insurers are uniquely positioned to build relationships within the communities they serve through the development of a corporate board that represents the diversity of the state.
2. Requires, commencing July 1, 2020, and biennially of each even-numbered year thereafter, each admitted insurer with California written premiums of $100 million or more to submit a report to the Commissioner on its minority, women, LGBT, veteran, and disabled veteran-owned business enterprise procurement efforts during the previous two years.
   1. Defines various terms, including disabled veteran business enterprise, LGBT business enterprise, minority business enterprise, and women business enterprise.
   2. Specifies that the bill does not require quotas, set-asides, or preferences in an admitted insurer’s procurement of goods and that an admitted insurer retains the authority to use business judgment in selecting suppliers.
   3. Requires certain information to be included in the report, such as information about which procurements are made from minority, women, LGBT, veteran, and disabled veteran-owned business enterprises with each category aggregated separately.
   4. Requires the Commissioner to provide public access via the CDI’s website to the contents of each admitted insurer’s report.
   5. Makes a failure to file the report punishable by a civil penalty to be fixed by the Commissioner not to exceed $5,000 or, if the failure to file was willful, not to exceed $10,000.
      1. Authorizes an insurer to request and the Commissioner to grant a 30-day extension to file the report due to unintended or unforeseen delays.
      2. Provides for an appeal of the assessment of a civil penalty, as specified.
3. Requires, commencing July 1, 2020, and biennially of each even-numbered year thereafter, each admitted insurer with California written premiums of $100 million or more to submit a report to the Commissioner on its governing board and board diversity efforts during the previous two years.
   1. Requires the report to include the demographic makeup of the insurer’s governing board and the insurer’s goals surrounding board diversity.
   2. Requires an insurer to provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting the demographic makeup of the board.
   3. Specifies that the bill does not require quotas, set-asides, or preferences in an admitted insurer’s governing board.
   4. Requires the Commissioner to provide public access via the CDI’s website to the contents of each admitted insurer’s report.
4. Requires the Commissioner to establish and appoint an Insurance Diversity Task Force comprised of at least 13 members but no more than 15 members, as specified, and provides that the task force’s duties are to advise and provide recommendations to the CDI on increasing diversity in suppliers and on governing boards and to assist the CDI in promoting and providing outreach to insurance companies actively engaged in supplier and governing board diversity issues.
   1. Requires the CDI to review and, if necessary, revise its conflict of interest regulations to ensure task force members are required to disclose conflicts of interest to the public.
   2. Prohibits the task force members from receiving compensation and authorizes the members to be reimbursed for their actual and necessary expenses incurred with attending task force meetings.

COMMENTS

1. Background

In 2011, then Commissioner Dave Jones established the IDI to “focus on diversity issues within California's $310 billion insurance industry.”^[1] As part of the IDI, the then Commissioner issued a voluntary survey to insurers regarding both their purchases from diverse suppliers and the demographic make-up of their governing boards.^[2] He also established the Insurance Diversity Task Force to make recommendations to the Commissioner and CDI regarding diversity issues in the insurance industry. AB 53 (Solorio, Ch. 414, Stats. 2012) codified the supplier diversity survey and placed a sunset date on the program of January 1, 2019.

1. Stated need for the bill

The author writes:

A crucial piece of California’s insurance code has lapsed. AB 53, from 2012, helped highlight the importance of diversity within the insurance industry and resulted in California’s insurance procurement with diverse businesses to rise by 93%. Specifically, AB 53 required insurance companies and groups to report to the Department of Insurance (CDI) their efforts to procure supplies from minority-, women-, and disabled veteran-owned businesses.

Unfortunately, that measure sunset on January 1 of this year. SB 534 reestablishes this Insurance Supplier Diversity Survey to ensure procurement data from diverse suppliers continues to be collected and used to yield positive results. In addition, SB 534 updates current definitions in the survey to include diverse communities and categories that have historically been excluded, such as the LGBT community.

SB 534 builds upon our state’s efforts to improve diversity by adding the Governing Board Diversity Survey to California law, helping ensure that California diversity is reflected at the highest levels of governance. The Survey was started by CDI in 2011 and played a key role in illustrating the deficiency in diverse management. Out of 792 insurance companies, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

Finally, SB 534 codifies the Insurance Diversity Task Force, which is currently comprised of up to 15 members appointed by the Insurance Commissioner. These members provide their expertise and assist CDI in meeting its overall goal to create a more diverse industry. Ultimately, without the surveys and task force, meaningful data will not be collected and as a result diverse representation in the industry will fall by the wayside.

The sponsor of the bill, Commissioner Ricardo Lara, writes:

I believe the impact of supplier diversity leads to great economic benefits for California. In particular, wen diverse suppliers receive contracts from corporations, they, in turn, put wealth back into their communities which fosters greater economic development. Minority-owned businesses represent thirty-six percent of all firms in California, with women and veteran-owned businesses comprising twenty two percent and five percent, respectively. Additionally, California is home to the largest number of certified LGBT businesses, and the combined national purchasing power of the LGBT community is estimated to be over $900 billion, with LGBT-owned businesses contributing $1.7 trillion to the economy […] As California increases in diversity having already reached a ‘majority-minority’ status, I believe it is equally important to see the diversity of California consumers reflected in the board leadership of insurance companies. Governing board members, as part of the highest decision-making entity of a company, have the power to have an impact on critical decisions, policies, and practices made by insurance companies. Research shows that boards of directors are better able to make informed decisions and carry out their fiduciary and other duties when they contain a diverse mix of board members with different backgrounds and experiences.

1. Supplier diversity report, enforcement, and the Insurance Diversity Task Force

Until January 1, 2019, admitted insurers with written premiums equal to or in excess of $100 million were required to submit to the Commissioner a supplier diversity report on their minority, women, and disabled veteran business enterprise procurement efforts, and subjected an insurer to a civil penalty for failure to file the report. SB 488 (Bradford, 2017) would have, among other things, extended the sunset date of the supplier diversity report, but the bill was held in the Assembly Appropriations Committee. The CDI opposed the bill because of amendments to the bill that were unrelated to the supplier diversity program.^[3]

This bill would reenact the supplier diversity program as it existed prior to January 1, 2019, and expand the program to also require admitted insurers to report information on procurement from veteran and LGBT business enterprises in addition to minority, women, and disabled veteran business enterprise procurement efforts. The civil penalty provided for in the bill is the same as originally enacted in AB 53 (Solorio, Ch. 414, Stats. 2012). The penalty for failure to report is to be fixed by the Commissioner and cannot exceed $5,000 or, if the failure to file was willful, $10,000. The bill provides an appeal mechanism whereby an admitted insurer may appeal the assessment of a penalty in a court of competent jurisdiction or through administrative adjudication as provided for in the Administrative Procedures Act. The bill also authorizes the Commissioner to grant a 30-day extension to file the report if needed due unintended or unforeseen delays. The bill specifies that the penalty is the sole means for enforcing the supplier diversity reporting requirement. The bill also codifies the Insurance Diversity Task Force that was established under the IDI.

4. Board diversity report

The bill requires an admitted insurer to submit a report to the Commissioner on its governing board and board diversity efforts during the previous two years, including the demographic makeup of the insurer’s governing board and the insurer’s goals surrounding board diversity. An insurer is required to provide each board member an opportunity to participate in a survey for the purpose of collecting and reporting demographic information to the Commissioner and requires the Commissioner to provide public access to the contents of each report on the CDI’s website.

Opponents of the bill have raised privacy concerns regarding this provision of the bill. Specifically, they write:

While the identities of companies’ boards of directors are generally publicly available, asking and publishing non-voluntary information that otherwise would appear illegal to ask in the workplace for public consumption may violate laws and is problematic […] The industry strongly believes that collected board information of this nature should be made on a protected and purely voluntary basis to the Department of Insurance, and only if known, permitted, and self-reported. In addition, we would advocate having the Department develop a standardized form that all companies could give to their board members asking for sensitive information.

Demographic information reported on board members to the CDI that will be publicly posted arguably should only be allowed if voluntarily provided by a board member who understands that the information will be publicly available. The sponsor and author of the bill have offered the following amendments to alleviate the concerns raised by the opponents, including providing information to board members to ensure they are aware that providing the information is voluntary, that no adverse actions will be taken for not providing the information, and that the information provided will be posted on the CDI’s website.

The specific amendments are as follows:

Amendment 1

On page 6, in line 32, after “(b)” insert: (1)

Amendment 2

On page 6, between lines 35 and 36, insert:

(2) The insurer shall distribute a written disclosure to each board member prior to, or concurrently with, the survey. The disclosure shall notify the board member that the board member’s decision to disclose their demographic information is voluntary, that no adverse action may be taken against the board member if the board member declines to participate in the survey, and that the aggregate data collected for each demographic category will be reported.

(3) Neither an insurer nor the department shall in any way encourage, incentivize, or attempt to influence the decision of a board member to participate in the survey.

Amendment 3

On page 7, between lines 9 and 10, insert:

(f) The data collected pursuant to this section is confidential and shall not be

released by the department or an insurer under any circumstances, except as provided in this section.

Amendment 4

On page 8, below line 15, insert:

SEC. 2. The Legislature finds and declares that Section 1 of this act, which adds Section 972.3 to the insurance Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

In order to protect the privacy and personal information of individual insurance company board members participating in the governing board diversity survey, it is necessary that this information be kept confidential.

SUPPORT

Insurance Commissioner Ricardo Lara (sponsor)
AAA Appraisal Management Company

AP42, LLC

ARTEMIA Communications, Inc.

Asian Business Association

Black Business Association

California Asian Pacific Islander Chamber of Commerce (CalAsian Chamber)

California Association of Micro Enterprise Opportunity (CAMEO)

Carson Chamber of Commerce

Charles Jacobsen, Inc.

Domar Companies, LLC

DVBE Insurance & Financial Services, LLC

El Concilio of San Mateo County

Equality California

Fraser Communications

Fresno Metro Black Chamber of Commerce

Golden Gate Business Association (GGBA)

Helenistic

ICE Safety Solutions

InSight Consulting Partners

Latino Coalition for a Healthy California

LEAP (Leadership Education for Asian Pacifics)

Los Angeles Gay & Lesbian Chamber of Commerce

Los Angeles Latino Chamber of Commerce

Matthew K. Fust, senior advisor to Out Leadership/Quorum

National Diversity Coalition

National LGBT Chamber of Commerce

National Veteran Business Development Council

NORCAL Group

Oasis Center International

PFN Insurance Services

Rainbow Chamber of Commerce Silicon Valley

Rainbow PAC

Riviera Advisors

Sacramento Black Chamber of Commerce

Small Business Majority

State Insurance Compensation Fund
TELACU

The Greenling Institute

TRINUS

Veterans in Business Network

OPPOSITION

Association of California Life and Health Insurance Companies

National Association of Mutual Insurance Companies

Personal Insurance Federation of California
Pacific Association of Domestic Insurance Companies

RELATED LEGISLATION

Pending Legislation:

AB 295 (Daly, 2019) extends the operation of the requirement for an admitted insurer to provide information to the Commissioner on all of its community development investments, community development infrastructure investments, and green investments in California to January 1, 2024, and requires admitted insurers to submit investment information for calendar years 2018, 2019, and 2020 to the Commissioner by July 1, 2021. The bill is currently pending in the Assembly Appropriations Committee.

Prior Legislation:

SB 488 (Bradford, 2017) would have, among other things, expanded the supplier diversity report to also include information regarding an admitted insurer’s procurement from veteran and LGBT business enterprises and extended the sunset date of the program to January 1, 2025. The bill also would have required an admitted insurer to submit information regarding its governing board and board diversity efforts to the CDI and required CDI to make that information publicly available on its internet website, as specified. The bill was held in the Assembly Appropriations Committee.

AB 601 (Ridley-Thomas, 2017) was very similar to SB 488 (Bradford, 2017). The bill died in the Assembly Appropriations Committee.

AB 53 (Solorio, Ch. 414, Stats. 2012) required each admitted insurer with premiums written equal to or in excess of $100 million to submit a report to the Commissioner on its minority, women, and disabled veteran-owned business procurement efforts, subjected the admitted insurer to civil penalties for failure to file the report, and required the CDI to provides public access to the contents of each admitted insurer’s report on its website.

PRIOR VOTES:

Senate Insurance Committee (Ayes 9, Noes 0)

**************

1. Dept. of Insurance, Insurance Diversity Initiative (IDI), http://www.insurance.ca.gov/diversity/index.cfm (as of Apr. 11, 2019). ↑

2. Sen. Ins. Committee analysis of SB 488 (Bradford, 2017), p. 3, available at http://lis.calegis.net/LISWeb/faces/bills/billxmlxsl.xhtml;jsessionid=d6EeRzvpa5JQzcOJ3QkwBVQFHTB1watWLcIaIw9Uldd3MI92E_eW!-998179675# (as of Apr. 11, 2019). ↑

3. Assm. Approp. Committee analysis of SB 488 (Bradford, 2017), p. 2, available at http://lis.calegis.net/LISWeb/faces/bills/billdetail.xhtml;jsessionid=d6EeRzvpa5JQzcOJ3QkwBVQFHTB1watWLcIaIw9Uldd3MI92E_eW!-998179675# (as of Apr. 11, 2019). ↑

SENATE COMMITTEE ON INSURANCE

Senator Susan Rubio, Chair

2019 - 2020 Regular

Bill No: SB 534 Hearing Date: April 10, 2019

SUBJECT: Insurers: minority, women, LGBT, veteran, and disabled veteran business enterprises

DIGEST:

This bill would reenact and expand the insurer Supplier Diversity Survey and codify the insurer Governing Board Diversity Survey administered by the Department of Insurance.

ANALYSIS:

Existing law:

1. Requires an insurer domiciled in this state to submit a Corporate Governance Annual Disclosure (“Governance Disclosure”) to the Department of Insurance (“Department”) that includes information required by the National Association of Insurance Commissioners Model Regulation. (Ins. Code Section 936.1 et seq.) Contents include descriptions of specified characteristics of the board of directors and committees, each member, the board’s duties, the insurer’s plans for developing CEO and senior management succession, a description of how the insurer recruits and elects members, including whether there is a diversity policy in place and how it functions, and other matters.
2. Authorizes the Department to issue regulations regarding the Governance Disclosure pursuant to the Administrative Procedure Act.
3. Treats information and documents related to the Governance Disclosure as confidential and privileged, except that the Department may share information in the furtherance of a regulatory or legal action or with the prior written consent of the insurer.
4. Authorizes the Department to share information with state, federal, and international financial regulatory agencies, the National Association of Insurance Commissioners, and other third parties if the recipient agrees in writing to maintain the confidentiality and privileged status of the information and materials. Also authorizes the Department to receive the same kind of information from those agencies and but requires it to maintain the confidentiality and privileged status of the information and materials if treated as confidential and privileged by the donor state.
5. Authorizes the Department to retain experts to review the Governance Disclosure but places those parties under the same duties of confidentiality.

This bill:

1. Makes legislative findings that corporate leadership opportunities should be available to all Californians and that insurers are well positioned to have their boards of directors reflect the state’s diversity.

Supplier Diversity Survey

1. Starting July 1, 2020, requires an insurer with California written premiums of $100 million or more, to report biennially to the Department on its minority, women, LGBT, veteran, and disabled veteran-owned business procurement efforts and results during the reporting period.
   1. Establishes the criteria for or defines minority, women, LGBT, veteran, and disabled veteran-owned businesses.
   2. Requires the report to include:
      1. The insurer’s supplier diversity statement, outreach and communications efforts, and the appropriate contact information.
      2. Information about which procurements are made from minority, women, LGBT, and veteran business enterprises but:
         1. Limits that information to businesses that have a headquarters’ address in California or has at least a majority of the enterprise’s workforce in California and
         2. Requires that each category be aggregated separately to the extent that information is readily accessible.
      3. Total procurement contract dollars awarded, to the extent that information is readily accessible.
      4. Authorizes the insurer to include other relevant information.
   3. Authorizes an insurer that does not enter into procurement contracts California to satisfy the reporting requirements by filing a statement to that effect.
   4. Subjects noncompliant insurers to a penalty of up to $5,000 or, if the failure to comply is “willful,” $10,000.
   5. Declares that the bill does not require quotas, set-asides, or preferences and affirms that insurers retain the authority to use business judgment to select the supplier for a particular contract.

Governing Board Diversity Survey

1. Starting July 1, 2020, requires an insurer with California written premiums of $100 million or more, to report biennially to the Department its efforts to increase diversity on its governing board and current demographic information about the board.
   1. Requires the insurer to provide each board member with an opportunity to participate in a survey for the purpose of collecting and reporting related demographic information.
   2. Affirms that these provisions do not require quotas, set-asides, or preferences.
   3. Requires the Department, by November 1 of the reporting year, to publish each insurer’s report on its website and requires notice that the information is for informational purposes only.

Insurance Diversity Task Force

1. Establishes the Insurance Diversity Task Force of at least 13, but not more than 15, members that meets at least quarterly.
   1. Requires the Insurance Commissioner to appoint members from the following representative classes: 1 designee; 2 from the insurance industry including one that practices in the field of supplier diversity and on governing board diversity; 2 from a minority business enterprise; 2 from a women business enterprise; 1 from a disabled veteran or a veteran business enterprise; 1 from an LGBT business enterprise; 2 experts in the field of supplier diversity; and 2 experts in the field of governing board diversity.
   2. Provides that the Task Force shall recommend the best methods to increase procurement with diverse suppliers and increase diversity on the governing board within the insurance industry, and assist the Department in promoting outreach to insurance companies on those issues.
   3. Prohibits compensation to members, but authorizes reimbursement for expenses.
   4. Requires the Department to review conflict of interest regulations to ensure that each task force member is required to disclose conflicts of interest.

Authors Statement

According to the author, a crucial piece of California’s Insurance Code has lapsed. AB 53, from 2012, highlighted the importance of diversity within the insurance industry and resulted in insurer procurement from diverse businesses to rise by 93%. Specifically, AB 53 required insurers to report their procurement efforts from minority-, women-, and disabled veteran-owned businesses.

Unfortunately, AB 53 sunset on January 1, 2019. SB 534 reestablishes this Supplier Diversity Survey to ensure procurement data from diverse suppliers continues to be collected and used to yield positive results. SB 534 also updates the survey to include historically excluded communities, such as the LGBT community.

SB 534 builds upon our state’s efforts by adding the Governing Board Diversity Survey helping ensure that California diversity is reflected at the highest levels of governance. Started in 2011, the survey illustrated the deficiency in diverse management. Out of 792 insurers, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

Finally, SB 534 codifies the Insurance Diversity Task Force that will assist the Department in encouraging diversity in the industry. Without the surveys and task force, meaningful data will not be collected and diverse representation in the industry will fall by the wayside.

Background

This bill involves two surveys, the Supplier Diversity Survey and the Governing Board Diversity Survey. It also would codify the Insurance Diversity Task Force.

Supplier Diversity Survey. The Public Utilities Commission administers the Utility Supplier Diversity Program that creates a clearinghouse for businesses certified to be women, minority, LGBT businesses and requires annual reporting by utilities of their purchases from those business. That program serves as the inspiration for the insurer Supplier Diversity Survey.

In 2011, the Department requested insurers to voluntarily report their diversity practices and disclose governing board demographics. In 2012, AB 53 (Statutes of 2012, Chapter 414), required insurers to biennially report their purchases of services and goods from certified diverse suppliers used by California insurers. Reported purchases include those made from certified providers of accommodation and food services, legal services, real estate services, print services, office supplies, advertising and marketing, and financial services.

Governing Board Diversity Survey. In 2011, the Department first issued a voluntary survey examining and publishing the demographic makeup of insurers’ governing boards, including the number whom are women, Latino, African-American, Asian Pacific Islander, Native American, or disabled veterans. In 2014 with a mandatory survey but with slightly revised categories, including the number of members that publicly identify as LGBT.

In 2015, AB 553 (Daly), sponsored by the Department, was enacted to require insurers to submit a Governance Disclosure, requiring disclosure of corporate governance practices, including whether the insurer has a board diversity policy in place and how it functions (but it does not include demographic information). In 2016 and 2018, the Department issued Governing Board Diversity Surveys and as part of a component of the Multistate Insurance Diversity Survey.

This bill codifies the Governing Board Diversity Survey, but unlike the Supplier Diversity Survey, does not describe what sort of demographic information is required. The bill also requires the Department to publish the insurer’s report on its website. By failing to articulate what information must be collected and published, it leaves out necessary details. In anticipating how this bill will be implemented, insurers are looking to the Department’s prior versions, including those published as part of a multistate effort in 2016 and 2018.

Multistate Insurance Diversity Survey. In 2016, the Department established the Multistate Diversity Survey (MIDS), along with District of Columbia, Minnesota, New York, Oregon, and Washington. In administering MIDS, the Department “administratively” modified and expanded AB 53’s requirements and combined it with the Governing Board Diversity Survey. In 2017, the Department sponsored SB 488 (Bradford) to codify MIDS, but that bill died in Assembly Appropriations. The Department issued variations of the MIDS in 2017 and 2018 with only some of the original states participating. The Department publishes each insurer’s report including the number of board members and the number of individuals within each category. Boards may have as few as two reported members to as many as 39. With the 2018 MIDS, the Department provides a suggested template form to be distributed to individual participants that explains that the insurer will aggregate and report the data, but not how the Department will publish the data.

This bill would codify the basic elements of MIDS, including the supplier diversity and governing board components. However, the way that the Department administered MIDS raised a number of process and privacy issues. This bill would address some of those issues (see the Senate Insurance Committee Analysis of SB 488 dated April 24, 2017), but others remain unaddressed.

Privacy and the Information Practices Act of 1977. The California Constitution, Article 1, section 1, grants each citizen an "inalienable right" to pursue and obtain "privacy.” California also has a privacy act specific to state agencies, the Information Practices Act of 1977 (Civil Code §§ 1798 et seq.). That act defines personal information broadly as “any information that is maintained by an agency that identifies or describes an individual, including, but not limited to … physical description” and requires that its provisions shall be liberally construed to protect privacy rights. (Civil Code §§ 1798.3 and 1798.63.)

When enacting the Information Practices Act of 1977, the Legislature made declarations regarding the solemnity of the right to privacy and that all individuals have a right of privacy in information pertaining to them. This right applies to board members and consumers alike. The Act further explains that:

• The right to privacy is being threatened by the indiscriminate collection, maintenance, and dissemination of personal information and the lack of effective laws and legal remedies.
• The increasing use of computers and other sophisticated information technology has greatly magnified the potential risk to individual privacy that can occur from the maintenance of personal information.

The Information Practices Act establishes several standards directly relevant to this bill, including a requirement that state agencies collect personal information, to the greatest extent possible, from the individual rather than from another source. (Civil Code § 1798.15.) It also establishes a requirement that each agency provide a written notice when collecting information that provides information necessary to establishes informed consent, including agency contact information, the authority under which the information is being collected, and any known or foreseeable disclosures. (Civil Code § 1798.17.)

Additionally, it prohibits an agency from disclosing any personal information in a manner that would link information to an individual absent prior written voluntary consent and with some specified exceptions. (Civil Code Section 1798.24.) In more modern terms, this requires the publisher to “deidentify” the data in a way in which it cannot be “reidentified.” The California Consumer Privacy Act of 2018 defines deidentified data as “information that cannot reasonably identify, relate to, describe, be capable of being associated with, or be linked, directly or indirectly, to a particular consumer” so long as a business takes specified steps to prevent reidentification. (Civil Code § 1798.140.) That act does not apply to deidentified information. (Civil Code § 1798.145.)

MIDS attempts to do this by publishing the data without the individual’s name, but groups the data by insurer. By grouping the data by insurer, the data is necessarily linked to a handful of individuals which creates a high risk of reidentification, especially when using other publicly available information. The Department’s data may be combined with other easily accessible information, such as an insurer’s corporate or business entity filings, to match individual board members to the reported demographic information (particularly through the use of artificial intelligence-driven tools).

Whole books have been written about preventing accidental disclosure of personal information given the power of information technology to identify relationship between different data sets. A standard practice is simply to aggregate the data in a large enough pool to ensure anonymity. For example, Government Code Section 12011.5 requires the Governor to publish demographic information on California judges exclusively on a statewide aggregate basis.

The author points to MIDS aggregated results to support the bill and also provides an example of how aggregated data makes its point without compromising individual privacy:

In 2017, insurers across the state reported to department that nearly 80% of insurance company governing board seats were held by men and only 12% of board seats were held by persons of color. Of the nearly 2,400 board seats, only 14 members self-identified as LGBT. Out of 792 insurance companies, at least 13% reported zero women and 35% reported zero persons of color on their governing boards.

Publication of the individual’s responses would be lawful when the individual is aware of this risk and grants informed consent. However, it must be done in a way that protects a nonconsenting individual’s privacy. For example, nonparticipation rates should also reported on an aggregate basis.

Design. In addition to privacy concerns, the general design of the survey does not lend itself to in-depth research or analysis. For example, because the data is not collected with a unique identifier, it may include individuals who serve on multiple boards. The data looks like its measuring diversity on the whole, but it may only be counting a few individuals who repeatedly appear on different boards. (Data collected this way remains confidential and subject to strict sharing and disclosure provisions of the Information Practices Act.)

Moreover, while the Department releases some aggregated results, it does not publish in-depth analysis. This contrasts with similar efforts. U.S. Senator Bob Menendez publishes an annual Corporate Diversity Survey covering company practices, diversity on boards and executive teams, supplier diversity, etc. He surveys Fortune 500 companies and issues a report that includes a more detailed assessment of corporate practices, some historical analysis, assessments, key findings, and recommendations. All published data is aggregated and does not include information on any individual company.

Another study by SpencerStuart, the 2019 Increasing Gender Diversity in Insurance Leadership, made some interesting findings specific to the insurance industry and offered insight into top executives, not just board members. For one, they found that the percentage of female executives is higher for life insurers than property and casualty companies. It also goes into greater detail about the roles they play in those companies. Most of the women in leadership serve in human resources and general management roles, but rarely had actuarial, sales, or underwriting roles. The report also makes observations about the types of impediments women may find when seeking higher positions and offers recommendations to women in the industry, as well as insurers, on how to address them. These recommendations were based, in part, on interviews with leaders in the insurance industry.

Multistate Surveys. Because insurance is an interstate activity but primarily regulated by the states, cooperation among regulators is fairly common and necessary. When interstate coordination is necessary, that cooperation is explicitly authorized and procedures are put in place that make it clear which state takes the lead, who pays for the costs (usually an individual insurer if it involves an interstate examination), and how information is shared. The sharing of information is authorized on the condition that other agencies agree to keep the information confidential.

California law prohibits permitting any person to use state resources for unauthorized purposes. (Govt. Code Section 8314(a).) California operates the MIDS Portal, where insurers report information and the information is published on the Department’s website, on behalf of itself and the other participating states. It appears that the majority of MIDS respondents are not required to participate under California law. In a 2016 Community Investment Survey Report, the Department indicates that only 228 insurance companies met the $100 million threshold. The 2018 MIDS portal lists 792 companies that reported data for the Governing Board Diversity Survey.

Task Force. The Department has engaged a diversity task force for several years. This bill would codify the practice with a 15-member task force appointed by the Insurance Commissioner. The Insurance Diversity Task Force would make recommendations on how to increase supplier and governing board diversity within the insurance industry.

Double-referral to Judiciary Committee. This bill is also referred to the Senate Judiciary Committee. Since the Legislature recesses April 11 to April 22, amendments may prejudice the ability of the Judiciary Committee to hear this bill before the deadline to hear fiscal measures.

Nevertheless, demographic information can be highly sensitive and state agencies are bound to respect the privacy of every individual. As the bill moves forward in the process, the author should consider amendments that ensure that administration of this bill will conform to the Information Practices Act and is consistent with other Insurance Code provisions, including the following:

• Personal information, to the greatest extent possible, should be collected from the individual rather than from another source. (Civil Code § 1798.15.)
• Participating individuals should be provided a form that includes the contact for the agency and the official responsible for the records, the authority under which the information is maintained, any known or foreseeable disclosures, the individual’s right to access the information, and other critical pieces of information. (Civil Code § 1798.17.)
• The agency should not publish or share any personal information in a manner that would link information to an individual without written voluntary consent. (Civil Code § 1798.24.)
• Confidential information should be protected in a way similar to the Corporate Governance Annual Disclosure Act and other areas of insurance regulation in that confidential information remains privileged, protected from subpoena and discovery, and excluded from the Public Records Act. (See Ins. Code §§ 735.5(b), 935.8(c), 936.6(c), and 1215.8(b).)

Related/Prior Legislation

SB 826 (Jackson), Chapter 954, Statutes of 2018, required each publicly held corporation whose principal executive offices are located in California to have a minimum number of women on its board of directors, as specified.

SB 488 (Bradford, 2017) would have renewed and broadened the Supplier Diversity Survey and codified the Governing Board Diversity Survey and would have authorized the Department to issue data calls and surveys relating to core function of the Department via emergency regulations. Held in Assembly Appropriations.

AB 601 (Ridley-Thomas, 2017) would have renewed and broadened the Supplier Diversity Survey, codified the Governing Board Diversity Survey and would have authorized the Department to issue data calls and surveys relating to core function of the Department of Insurance via emergency regulations. Held in Assembly Appropriations.

AB 553 (Daly), Chapter 213, Statutes of 2015, established the Governance Disclosure.

AB 53 (Solorio), Chapter 414, Statutes of 2012, codified the Supplier Diversity Survey until January 1, 2019.

ARGUMENTS IN SUPPORT:

Numerous organizations support this bill because it fuels economic opportunities for diverse business. It also benefits insurers by having more of these companies compete for insurer business. They also believe that the diversity of California consumers should be reflected in board leadership. They argue that the transparency of surveys is critical to assessing and measuring the progress of diversifying governing boards.

The Department explains that research shows that boards are better able to make informed decisions and carry out their fiduciary and other duties when they contain a diverse mix of members with different backgrounds and experiences. Recent studies also indicate that companies with greater governing board diversity have stronger financial performance. Board diversity has been associated with improved competitiveness and talent management, greater access to capital, and better relations with stakeholders.

ARGUMENTS IN OPPOSITION:

Association of California Life & Health Insurance Companies, National Association of Mutual Insurance Companies, Pacific Association of Domestic Insurance Companies, and Personal Insurance Federation of California expressed support for the Supplier Diversity Survey, but oppose the Governing Board Survey to the extent it may require the insurer to gather the information on behalf of the Department that has the potential to violate individual privacy rights. Specifically, the coalition explains that mandatory data calls which involve personal, confidential information of insurer board members present serious concerns. These trade organizations note that the Governing Board Diversity Survey requires insurers to ask for information that would otherwise appear to be illegal to ask in the workplace. They also point out that, although it is not the sponsor’s intention to “out” board members that wish to keep their personal preferences confidential, that practice of reporting on a very small population of individuals makes it easy to cross-reference the collected data with other public information which may lead to the unintended publication of confidential information irrespective of the individual’s desire.

They further argue that neither the National Association of Insurance Commissioners nor any California law require the publishing of such confidential identifying information for public consumption. Under NAIC Corporate Governance Annual Disclosure Model Act, which California has adopted, corporate governance structure, policies, and practices, including whether there is a board diversity policy in place and how it functions, are available to the regulator. The industry strongly believes that collected board information of this nature should be made on a protected and purely voluntary basis to the Department, and only if known, permitted, and self-reported. In addition, the trade associations recommend that the Department develop a standardized form that all companies could provide to survey participant requesting this sensitive information.

SUPPORT:

California Department of Insurance (source)

Ap42, LLC
Asian Business Association
Asian Journal Publications, Inc.
California Asian Pacific Islander Chamber of Commerce
California Association of Micro Enterprise Opportunity
Carson Chamber of Commerce
Charles Jacobsen, Inc.
Community Connections, LLC
Consumer Attorneys of California
El Concilio of San Mateo County
El Mundo

Fresno Metro Black Chamber of Commerce
Golden Gate Business Association
Impact Southern California CDC
Jesse Miranda Center for Hispanic
Latino Coalition for Community Leadership

Latino Coalition for a Healthy California
Leadership Education for Asian Pacifics
Los Angeles Gay & Lesbian Chamber of Commerce
Macedonia CDC
National Asian American Coalition
National LGBT Chamber of Commerce
National Veteran Business Development Council
NORCAL Group
Oasis Center International
PFN Insurance Services
Rainbow Chamber of Commerce Silicon Valley
Sacramento Black Chamber of Commerce
State Compensation Insurance Fund

The Dorsey Group LLC CA Leadership
The Greenlining Institute
Vasquez & Company, LLC

OPPOSITION:

Association of California Life & Health Insurance Companies
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California

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