BILL NUMBER: SB 590 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 7, 2011
PASSED THE ASSEMBLY SEPTEMBER 1, 2011
AMENDED IN ASSEMBLY AUGUST 29, 2011
AMENDED IN ASSEMBLY JULY 12, 2011
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, 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.
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
also require, within 14 days of the purchase of that type of life
insurance or 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. The bill would prohibit the
insurance salesperson who meets with a senior in the senior's home to
sell that type of life insurance or annuity to sell any other
insurance policies or annuities without providing the required
24-hour advance notice.
(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 an
initial face value of $15,000 or less 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, the right of return shall
last 60 days when the 24-hour advance notice is not delivered.
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 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) The 24-hour advance notice requirement in subdivision (b)
shall not be required for 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 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 described in
subdivision (g), the issuer shall provide by first-class mail written
notice of the purchase and 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 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 form, 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."
(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 insurance policies or annuities without providing the
notice form described in subdivision (b) no less than 24 hours in
advance.
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
when the notice specified in subdivision (b) of Section 789.10 is not
delivered 24 hours in advance.
(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) This section applies to all policies issued, amended, or
delivered in this state on or after January 1, 2012, and applies to
any renewal thereof. All policies subject to this section that are in
effect on January 1, 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.