Assembly Bill 1012 (Foran -1969)
Chapter 464, Statutes of 1969
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The Enrolled Bill Memorandum to Governor provides the following summary of Assembly Bill 1012:
AB 1012 revises and expands the class of applicants for certificates of authority to engage in the insurance business that are exempt from
prohibition against granting such certificates to certain out-of-state applicants.
(See Exhibit #4, document PE-2)
The sponsor of Assembly Bill 1012, the Department of Insurance, explains the rationale for the amendments proposed by the measure, stating:
The current law except subsidiaries of companies which have been licensed here for three years. Recent experience, particularly the rash of mergers and formation of conglomerates, show other situations, for equally valid reasons, should also be excepted.
. . .
This proposal is an urgency measure in order to accommodate one present, and probably other unknown, market problems. Federal Small Business Administration, loans frequently to minority group persons, require insurance to guarantee payments on business leases. Old line insurers refuse to write this type of insurance because of bad experience in the depression eras. Two mid-western mortgage guarantee insurers are writing this insurance elsewhere and one is applying to be licensed here but is presently barred because it has made a holding corporation out of what was an insurer licensed in California. Thus making its subsidiary (the applicant) ineligible because the parent is no longer an insurance company.
(See Exhibit #4, document PE-5)
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