Last week, Senator Steven Bradford (D-Gardena) introduced Senate Bill 655. This bill will codify reporting requirements for underrepresented groups on insurance company governing boards, lower the existing California premium reporting threshold value for board and supplier diversity data from $100 million to $75 million, and define the term Diverse Investment Managers in the COIN program. The bill is sponsored by Insurance Commissioner Ricardo Lara.
“Sometimes sunlight is the best disinfectant,” said Senator Bradford. “Commissioner Lara and I have been working together to collect data on the diversity of the insurance market and make sure that it really reflects the diversity of the State of California. Unsurprisingly, what we are seeing from that data is that isn’t happening at the highest levels of governance. But let’s be clear, this lack of diversity exists in aspects of government and business in California. This bill builds upon our previous work by ushering insurers to implement measurable goals for inclusivity.”
“California’s increasing racial and ethnic diversity still is not reflected in our insurance boardrooms, despite some progress under our insurance diversity initiative,” said Insurance Commissioner Ricardo Lara. “SB 655 will require insurance companies to report their plans for increasing the numbers of women, LGBTQ+ and people of color on their boards to better represent California’s insurance consumers. SB 655 will also codify my new initiative to target insurance investments in affordable housing and environmental projects, which are needed more than ever.”
In November 2020, the California Department of Insurance released results from their Insurance Diversity Survey that unveiled disparities in the boardrooms across the 260 insurance companies, which comprise 90% of the total market share. In 2019, among at least 1,300 board seats surveyed, nearly 80% were occupied by Caucasians, and 70% identified as men. Meanwhile, less than 1% of board members publicly identified as LGBT and those from historically underrepresented communities continue to remain disproportionately low; namely, African Americans, Asians/Pacific Islanders, Hispanics/Latinos, and American Indians comprised less than 7% of board seats, with American Indians not being represented at all.
Commissioner Lara directs the nationally recognized Insurance Diversity Initiative that focuses on accelerating the rate of progress and equity within the insurance industry by diversifying representation among the boards of insurance companies and increasing spending with businesses owned by women, LGBTQ+ people, veterans, disabled veterans, and historically underrepresented communities. Governor Gavin Newsom’s signing of Senate Bill 534 (2019), sponsored by Commissioner Lara and authored by Sen. Bradford, codified the Insurance Diversity Task Force that advises the Commissioner’s diversity initiative.
Commissioner Lara created the Invest in Our Diverse Communities Initiative last year to increase insurance investment in socially responsible affordable housing and environmental projects. Click here to learn more.