BILL NUMBER: AB 793	CHAPTERED
	BILL TEXT

	CHAPTER  223
	FILED WITH SECRETARY OF STATE  SEPTEMBER 6, 2011
	APPROVED BY GOVERNOR  SEPTEMBER 6, 2011
	PASSED THE SENATE  AUGUST 18, 2011
	PASSED THE ASSEMBLY  MAY 12, 2011
	AMENDED IN ASSEMBLY  APRIL 4, 2011

INTRODUCED BY   Assembly Member Eng

                        FEBRUARY 17, 2011

   An act to add Section 785.1 to the Insurance Code, relating to
insurance producers.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 793, Eng. Insurance producers: reverse mortgages.
   Existing law provides that all insurers, brokers, agents, and
others engaged in the transaction of insurance owe a prospective
insured who is 65 years of age or older, a duty of honesty, good
faith, and fair dealing. This duty is in addition to any other duty,
whether express or implied, that may exist.
   This bill would prohibit an insurance broker or agent from
participating in, being associated with, or employing any party that
participates in or is associated with, the origination of a reverse
mortgage, except as provided. The bill would also prohibit, with
exceptions, individuals transacting insurance from receiving
compensation, commission, or direct incentive for providing reverse
mortgage borrowers with a noncasualty insurance product that is
connected to or a result of the reverse mortgage.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 785.1 is added to the Insurance Code, to read:
   785.1.  (a) (1) An insurance broker or agent shall not participate
in, be associated with, or employ any party that participates in, or
is associated with, the origination of a reverse mortgage, unless
the insurance agent or broker maintains procedural safeguards
designed to ensure that the agent or broker transacting insurance has
no direct financial incentive to refer the policyholder or
prospective policyholder to a reverse mortgage lender.
   (2)  Except as provided in subdivision (b), individuals
transacting insurance shall not receive compensation, commission, or
direct incentive for providing reverse mortgage borrowers with a
noncasualty insurance product that is connected to or a result of the
reverse mortgage.
   (b) This section does not prevent an agent or broker from offering
title insurance, hazard, flood, or other peril insurance, or other
similar products that are customary and normal under a reverse
mortgage loan.