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AB 53, by Assembly Insurance Chair Jose Solorio, passed the Assembly floor this past week with a vote of 50-25.
AB 53 would require major California insurers to file a report with the Insurance Commissioner regarding their outreach and procurement practices involving businesses owned by women, minorities, and disabled veterans.
"California's massive $116 billion insurance industry routinely enters into contracts with other businesses to deliver insurance services to Californians. It is my hope that the reporting requirements in AB 53 will lead to a more conscientious effort on the part of insurance companies to diversify their business partners," said Solorio." I also believe that AB 53 will lead to the creation of jobs where jobs are needed most."
AB 53 also requires the California Insurance Commissioner to establish and maintain a link on the Insurance Department's website that provides public access to the contents of the reports.
The California Department of Insurance supports this measure. "AB 53 will help California's minority, women and disabled veteran-owned businesses get a foot in the door with California's largest insurance companies," said Insurance Commissioner Dave Jones in a statement.” By the same token, insurance companies will benefit from the goods and services provided by these businesses. Growing small businesses will help turn our economy around."
AB 53 is based on the provisions of another Solorio bill, AB 41, signed into law in 2010. Under AB 41, each insurer that collects more than $100 million in premiums from Californians are required to file a policy statement detailing that company's goals for community development and infrastructure investments in underserved communities. Just one year after the legislation became law, nearly all impacted insurance companies complied by submitting a community development plan.
"We know from our experience with community development plans that stated goals set into motion the achievement of those goals," Solorio added." That is why AB 53 has the support of African-American, Asian, Latino and Pacific Islander chambers of commerce and business groups throughout the state, and the support of women's organizations.”