SACRAMENTO – Gov. Newsom signed SB 534, introduced by Sen. Steven Bradford (D-Gardena) and supported by the California Department of Insurance, members of the department’s Insurance Diversity Task Force and The Greenlining Institute. This bill re-establishes a requirement for the largest insurers in California’s $310 billion insurance industry to report their level of contracting with businesses owned by people of color, women, veterans, and LGBT individuals. Insurance companies will also be required to survey their board members regarding demographic information and report the demographics of these most senior decision-makers to the Department of Insurance.
“California insurers should be using their enormous buying power to invest in California’s minority, woman, LGBT, veteran, and disabled veteran owned businesses as well as work towards achieving a governing board that reflects the diverse population in California,” said Commissioner Lara.
“Since its inception, the Department’s Diversity Initiative has helped empower diverse businesses to put resources back into their local communities. Thank you to Gov. Newsom and Sen. Bradford for re-authorizing and expanding this valuable program to help more people and communities throughout the state.”
“Studies have shown that a diverse population is more effective than even a uniform body of experts,” said Bradford. “It is time for the insurance industry to reflect the great diversity of California and the United States. SB 534 makes that possible. Encouraging diverse spending and collecting governance data strengthens our insurance market and by extension its protection of Californians. I am proud to have worked on this measure with Insurance Commissioner Lara and happy to see Gov. Newsom share our beliefs on the benefits diversity can bring our state.”
“SB 534 ensures that diversity will be at the forefront of California’s insurance industry,” said Anthony Galace, Health Equity director at The Greenlining Institute. “We applaud the leadership of Insurance Commissioner Ricardo Lara and Sen. Bradford for pushing this important issue and making this bill a priority.”
After California first passed supplier diversity reporting requirements for the insurance industry through AB 53 (Solorio, 2012), contracting with diverse businesses skyrocketed by 93 percent between 2012 and2017. SB 534 seeks to build on this trend and further strengthen diverse businesses across the state. Additionally, data collected by the Department of Insurance in 2017 showed that 80 percent of major insurers’ governing board seats were held by men while just 12 percent were held by people of color.
Of nearly 2,400 total board seats, only 14 members self-identified as LGBT, while 13 percent of insurance companies reported zero women and 35 percent reported zero persons of color on their boards.