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ASSEMBLY BILL 544 (VARGAS – 2005)

CHAPTER 84, STATUTES OF 2005

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Insurance Code section 1704 was amended in 2005 following legislative approval of Assembly Bill 544, which affected this section only.   (See Exhibit #1d)  The measure was introduced by Assembly member Juan Vargas on February 16, 2005 on behalf of State Farm Agents and State Farm. (See Exhibits #1a; #3, page 3; #8, page 2; and #9, document SP-2)  At this time, Assembly member Vargas served as chair of the Assembly Committee on Insurance.  (See Exhibit #3)

Assembly Bill 544 was assigned to the Assembly Committee on Insurance and the Senate Committee on Banking, Finance and Insurance where policy issues raised by the bill were considered.  (See Exhibits #3 and #8)  The fiscal ramifications of the bill were considered by both the Assembly and Senate Committees on Appropriations.  (See Exhibits #5 and #2) 

Two amendments were made to Assembly Bill 544.  (See Exhibits #1b, #1c, and #2)  Subsequent to legislative approval, Governor Arnold Schwarzenegger signed the bill on July 19, 2005 and it was recorded by the Secretary of State on that day as Chapter 84 of the Statutes of 2005.  (See Exhibit #1d)

The Office of Senate Floor Analyses summarized Assembly Bill 544 as it was last amended on June 14, 2005, stating:

This bill permits an insurance solicitor to be employed by more than one fire and casualty broker agent, provided that the employing broker-agents have entered into an agreement to determine on whose behalf the solicitor is when dealing with new customers for purposes of assessing liability for the actions of the solicitor, and would make related changes.
(See Exhibit #10, page 1)