A measure approved by the California State Senate is based on a flawed premise and will discourage charitable giving by insurance companies, says the American Insurance Association (AIA).
“This bill is based on the faulty assumption that insurers should be regulated at the state level, in the same way that banks are regulated at the federal level,” Mark Webb, AIA vice president, western region, commented. “At a time when property and casualty insurance companies must be certain that their investments are secure and can be easily liquidated to pay claims quickly, requiring investment data reporting that does not further this purpose is at best wasteful and at worst irresponsible.”
SB 1861, authored by Senator Richard Alarcon (D-Sylmar), would give the state insurance commissioner authority to mandate that insurers’ annual statements include all community development investments and philanthropic grants made in California. The bill would also require the insurance commissioner to make the data reported by insurers publicly available.
“Requiring insurance companies to disclose their charitable activities made to California organizations will ultimately result in the decline of those donations,” Webb said. “Charitable organizations are not required to release the identity of their donors. Anonymity and donating have long gone hand-in-hand. Why should insurance companies be held to a different standard? If insurers want to publicize their charitable contributions, they can use their advertising budgets. They should not be compelled to make these donations public.
“The insurance industry supports the development of California communities in a number of ways, including the purchase of bonds which are used to construct low- and moderate-income housing and build California’s infrastructure. In addition, we provide the insurance products that make economic development and growth possible, Webb concluded.
The State Senate approved SB 1861 on a vote of 22 to 16. The bill will now move to the California State Assembly for consideration.
Topics California Carriers
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