BILL NUMBER: SB 590 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 1, 2011
AMENDED IN SENATE MARCH 31, 2011
INTRODUCED BY Senator Calderon
FEBRUARY 17, 2011
An act to amend Sections 789.10 and 10127.7 of the Insurance Code,
relating to life insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 590, as amended, Calderon. Life insurance.
(1) Existing law regulates the sale of life insurance to seniors,
including annuities, as specified. Existing law requires a person who
meets with a senior in the senior's home regarding the sale of life
insurance to deliver a notice in writing to the senior no less than
24 hours prior to that individual's meeting, and to abide by other
restrictions regarding contacting the senior in the senior's home.
This bill would specify that the above notice could be provided at
the time of the meeting in the senior's home and that the other
provisions do not apply if the meeting concerns the sale of life
insurance designated by the purchaser as payment for funeral and
burial expenses, the life insurance policy has an initial face amount
of $15,000 or less, the policy provides a "free look" period in
which the purchaser has 60 days to cancel the policy and be refunded
payments made, and the seller is licensed, as specified. The bill
would require the issuer of one of these policies exempted from the
provisions requiring 24-hour advance notice and related requirements
to provide a written notice of the purchase and the 60-day right of
cancellation with specified content to the senior and certain other
persons, except as specified.
The bill would specify that the above notice, including an
additional statement regarding the senior's rights, may be provided
at the time of the meeting in the senior's home when the meeting
concerns the sale of life insurance designated by the purchaser as
payment for funeral and burial expenses if the life insurance policy
has an initial face value amount of $15,000 or less. The bill would
prohibit the insurance salesperson, exempt from providing the 24-hour
advance notice, from selling any other insurance policy or annuity
without providing the required 24-hour advance notice. The bill would
also require, within 14 days of the purchase of life insurance or an
annuity by a senior, that the issuer of the policy provide by
first-class mail a written notice of the purchase and notice of a
60-day right of cancellation with specified content to the senior and
certain other persons.
(2) Existing law provides that life insurance policies with a face
value of less than $10,000, issued after July 1, 1974, shall contain
a notice permitting the return of the policy within a period of time
designated in the notice, which may not be less than 10 days nor
more than 30 days.
This bill would provide that a life insurance policy with a face
value of $15,000 or less , issued after January 1, 2012,
shall contain a notice permitting the return of the policy
within not less than 10 days nor more than 30 days, provided that for
a policy relating to funeral and burial expenses described in (1)
above, if certain notice requirements are not met,
the right of return shall last 60 days.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 789.10 of the Insurance Code is amended to
read:
789.10. (a) This section applies to the sale, offering for sale,
or generation of leads for the sale of life insurance, including
annuities, to senior insureds or prospective insureds by any person.
(b) Except as provided in subdivision (i)
subdivisions (g) and (i) , any person who meets with a senior
in the senior's home is required to deliver a notice in writing to
the senior no less than 24 hours prior to that individual's initial
meeting in the senior's home. If the senior has an existing insurance
relationship with an agent and requests a meeting with the agent in
the senior's home the same day, a notice shall be delivered to the
senior prior to the meeting. The notice shall be in substantially the
following form, with the appropriate information inserted, in
14-point type:
"(1) During this visit or a followup visit, you will be given a
sales presentation on the following indicate all that apply]:
( ) Life insurance, including annuities
( ) Other insurance products specify]: _________________.
(2) You have the right to have other persons present at the
meeting, including family members, financial advisors, or attorneys.
(3) You have the right to end the meeting at any time.
(4) You have the right to contact the Department of Insurance for
information, or to file a complaint. The notice shall include the
consumer assistance telephone numbers at the department]
(5) The following individuals will be coming to your home: list
all attendees, and insurance license information, if applicable]"
(c) Upon contacting the senior in the senior's home, the person
shall, before making any statement other than a greeting, or asking
the senior any other questions, state that the purpose of the contact
is to talk about insurance, or to gather information for a followup
visit to sell insurance, if that is the case, and state all of the
following information:
(1) The names and titles of all persons arriving at the senior's
home.
(2) The name of the insurer represented by the person, if known.
(d) Each person attending a meeting with a senior shall provide
the senior with a business card or other written identification
stating the person's name, business address, telephone number, and
any insurance license number.
(e) The persons attending a meeting with a senior shall end all
discussions and leave the home of the senior immediately after being
asked to leave by the senior.
(f) A person may not solicit a sale or order for the sale of an
annuity or life insurance policy at the residence of a senior, in
person or by telephone, by using any plan, scheme, or ruse that
misrepresents the true status or mission of the contact.
(g) This section The 24-hour advance
notice requirement in subdivision (b) shall not apply to the
sale of life insurance policies of the type described in subdivision
(c) of Section 1676 that are designated by the purchaser as payment
for funeral and burial expenses if the life insurance policy
meets both of the following:
(1) Has an initial face amount of fifteen thousand dollars
($15,000) or less.
(2) Provides a
"free look" period in which the purchaser has 60 days to cancel the
policy and be refunded payments made to the insurer prior to the
cancellation of the policy. burial expenses if the
life insurance policy has an initial face value amount of fifteen
thousand dollars ($15,000) or less.
(h) (1) Within 14 days of the purchase of a policy exempt
from application of this section pursuant to subdivision (g)
, the issuer shall provide by first-class mail written
notice of the purchase and the a 60-day
right of cancellation to the senior, any family member designated by
the senior, and any financial, estate planning, or other advisor of
the senior's choosing at addresses provided by the senior. The notice
shall include all of the following:
(A) Information on the right of cancellation.
(B) A statement that the recipient of the notice is authorized to
call the insurer to inquire about the policy on behalf of the
policyholder.
(C) A form suitable for the senior's use in exercising the right
to cancel the policy.
(D) Information on how to contact the department for information
or to file a complaint, including the telephone number of the
department's customer assistance office.
(2) The department may adopt, by regulation, a standardized form
for use in complying with the requirements of paragraph (1).
(i) The notice requirement in subdivision (b) shall be deemed
satisfied with respect to a policy exempt from application of this
section pursuant to subdivision (g) if both of the following
requirements are met:
(i) The sale of a policy exempt from the 24-hour advance notice,
pursuant to subdivision (g), shall meet all of the following
requirements:
(1) The notice , described in subdivision (b), was
provided to the prospective purchaser by a licensee subject to
subdivision (c) of Section 1676 at the time of the meeting in the
prospective purchaser's home regarding the purchase of funeral and
burial expense policies.
(2) In addition to the notice form described in subdivision (b),
the notice shall include the statement:
"You have the right to postpone or reschedule the meeting if you
wish to have other persons present, including family members,
financial advisors, or attorneys."
(2)
(3) The licensee retains in his or her files a copy of
the notice signed by the purchaser.
(j) A licensee who meets with a senior in the senior's home to
sell insurance policies described in subdivision (g) shall not sell
any other life insurance policies or annuities without providing the
24-hour advance notice required by subdivision (b).
SEC. 2. Section 10127.7 of the Insurance Code is amended to read:
10127.7. (a) Every policy of individual life insurance with an
initial face value of fifteen thousand dollars ($15,000) or less that
is delivered or issued for delivery in this state on and after
January 1, 2012, shall have printed thereon or attached thereto a
notice stating that, after receipt of the policy by the owner, the
policy may be returned by the owner for cancellation by delivering it
or mailing it to the insurer or to the agent through whom it was
purchased.
(b) The period of time set forth by the insurer for return of the
policy by the insured shall be clearly stated on the notice and,
except as provided in subdivision (c), this period shall be not less
than 10 days nor more than 30 days.
(c) The period of time to return a life insurance policy of the
type described in subdivision (g) of Section 789.10 shall be 60 days
unless the 24-hour notice specified in subdivision (b) of
Section 789.10 is provided .
(d) The insured may return the policy to the insurer at any time
during the period specified in the notice. This delivery or mailing
of the policy by the owner shall void the policy from the beginning,
and the parties shall be in the same position as if no policy or
contract had been issued. All premiums paid and any policy fee paid
for the policy shall be refunded to the owner within 30 days from the
date that the insurer is notified that the insured has canceled the
policy.
(e) Except as provided in subdivision (a), this
This section applies to all policies
issued, amended, or delivered in this state on or after January 1,
2011, 2012, and applies to any renewal
thereof. All policies subject to this section that are in effect on
January 1, 2011, 2012, shall be
construed to be in compliance with this section, and any provision in
such a policy that is in conflict with this section shall be of no
force or effect.
(f) This section does not apply to individual life insurance
policies issued in connection with a credit transaction or issued
under a contractual policy change or conversion privilege provision
contained in a policy.