BILL NUMBER: SB 1170	CHAPTERED
	BILL TEXT

	CHAPTER  653
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 27, 2012
	PASSED THE SENATE  MAY 7, 2012
	PASSED THE ASSEMBLY  AUGUST 22, 2012
	AMENDED IN SENATE  MAY 1, 2012
	AMENDED IN SENATE  APRIL 12, 2012
	AMENDED IN SENATE  MARCH 28, 2012

INTRODUCED BY   Senator Leno
   (Coauthors: Senators Alquist, Anderson, Calderon, Corbett, Correa,
Gaines, Lieu, Lowenthal, Price, Strickland, and Wyland)
   (Coauthors: Assembly Members Chesbro, Huffman, Wieckowski,
Williams, and Yamada)

                        FEBRUARY 22, 2012

   An act to amend Section 1770 of the Civil Code, and to amend
Sections 787 and 789.10 of, and to add Section 785.4 to, the
Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1170, Leno. Senior insurance.
   (1) Existing law makes it unlawful to engage in specified
practices, unfair methods of competition, and unfair or deceptive
acts or practices in a transaction intended to result or that results
in the sale or lease of goods or services, including making false or
misleading statements concerning the existence of price reductions,
or the home solicitation of a consumer who is a senior citizen where
a loan is made encumbering the primary residence of that consumer for
purposes of paying for home improvements. A consumer who suffers
damages as a result of the use or employment of the prohibited acts
or practices may bring an action to recover civil damages of at least
$1,000, and, if the victim is a senior citizen and the trier of fact
makes specified findings, including that the consumer has suffered
substantial physical, emotional, or economic damage resulting from
the defendant's conduct, to recover an additional amount of up to
$5,000.
   This bill would expand that provision to include advertising or
promoting any event, presentation, seminar, workshop, or other public
gathering regarding veterans' benefits or entitlements that does not
include a statement that the person disseminating the statement is
not authorized to file an initial application for veterans' benefits
or that the event is not sponsored by or affiliated with specified
veterans' organizations, including the United States Department of
Veterans Affairs. The bill would also make a conforming change.
   (2) 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 make it unlawful for an insurance agent who is not
licensed as an attorney to deliver to a person who is 65 years of
age or older, or for an insurance agent who is licensed as an
attorney to deliver to a person who is 65 years of age or older, a
living trust or other legal document, other than an insurance
contract or other insurance product document, except as specified.
   (3) Existing law requires any person who meets with a senior in
the senior's home to deliver a specified notice to the senior in
writing and in 14-point type no less than 24 hours prior to that
individual's initial meeting in the senior's home.
   This bill would additionally require the notice to be delivered no
more than 14 days prior to the meeting. The bill would also require
that the notice be a stand-alone document in 16-point, rather than
14-point, type, that the notice include specified information
regarding the agent, including his or her full name and license
number, and that the notice include a specified statement.
   (4) Existing law sets certain standards with regard to any
advertisement, as defined, or other device designed to produce leads
based on a response from a potential insured that is directed to a
person 65 years of age or older, including, but not limited to,
disclosing certain information, not using certain language, names,
letters, or symbols, and not using specified deceptive or misleading
practices and materials.
   This bill would change the definition of advertisement to also
include worksheets, questionnaires, or other materials designed to
collect personal or financial information about a prospective insured
or annuitant. The bill would also add veterans organizations or
agencies and the United States Department of Veterans Affairs to the
list of those entities that cannot be used in specified deceptive or
misleading advertising practices and materials.


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

  SECTION 1.  Section 1770 of the Civil Code is amended to read:
   1770.  (a) The following unfair methods of competition and unfair
or deceptive acts or practices undertaken by any person in a
transaction intended to result or which results in the sale or lease
of goods or services to any consumer are unlawful:
   (1) Passing off goods or services as those of another.
   (2) Misrepresenting the source, sponsorship, approval, or
certification of goods or services.
   (3) Misrepresenting the affiliation, connection, or association
with, or certification by, another.
   (4) Using deceptive representations or designations of geographic
origin in connection with goods or services.
   (5) Representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities
which they do not have or that a person has a sponsorship, approval,
status, affiliation, or connection which he or she does not have.
   (6) Representing that goods are original or new if they have
deteriorated unreasonably or are altered, reconditioned, reclaimed,
used, or secondhand.
   (7) Representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular style
or model, if they are of another.
   (8) Disparaging the goods, services, or business of another by
false or misleading representation of fact.
   (9) Advertising goods or services with intent not to sell them as
advertised.
   (10) Advertising goods or services with intent not to supply
reasonably expectable demand, unless the advertisement discloses a
limitation of quantity.
   (11) Advertising furniture without clearly indicating that it is
unassembled if that is the case.
   (12) Advertising the price of unassembled furniture without
clearly indicating the assembled price of that furniture if the same
furniture is available assembled from the seller.
   (13) Making false or misleading statements of fact concerning
reasons for, existence of, or amounts of price reductions.
   (14) Representing that a transaction confers or involves rights,
remedies, or obligations which it does not have or involve, or which
are prohibited by law.
   (15) Representing that a part, replacement, or repair service is
needed when it is not.
   (16) Representing that the subject of a transaction has been
supplied in accordance with a previous representation when it has
not.
   (17) Representing that the consumer will receive a rebate,
discount, or other economic benefit, if the earning of the benefit is
contingent on an event to occur subsequent to the consummation of
the transaction.
   (18) Misrepresenting the authority of a salesperson,
representative, or agent to negotiate the final terms of a
transaction with a consumer.
   (19) Inserting an unconscionable provision in the contract.
   (20) Advertising that a product is being offered at a specific
price plus a specific percentage of that price unless (A) the total
price is set forth in the advertisement, which may include, but is
not limited to, shelf tags, displays, and media advertising, in a
size larger than any other price in that advertisement, and (B) the
specific price plus a specific percentage of that price represents a
markup from the seller's costs or from the wholesale price of the
product. This subdivision shall not apply to in-store advertising by
businesses which are open only to members or cooperative
organizations organized pursuant to Division 3 (commencing with
Section 12000) of Title 1 of the Corporations Code where more than 50
percent of purchases are made at the specific price set forth in the
advertisement.
   (21) Selling or leasing goods in violation of Chapter 4
(commencing with Section 1797.8) of Title 1.7.
   (22) (A) Disseminating an unsolicited prerecorded message by
telephone without an unrecorded, natural voice first informing the
person answering the telephone of the name of the caller or the
organization being represented, and either the address or the
telephone number of the caller, and without obtaining the consent of
that person to listen to the prerecorded message.
   (B) This subdivision does not apply to a message disseminated to a
business associate, customer, or other person having an established
relationship with the person or organization making the call, to a
call for the purpose of collecting an existing obligation, or to any
call generated at the request of the recipient.
   (23) The home solicitation, as defined in subdivision (h) of
Section 1761, of a consumer who is a senior citizen where a loan is
made encumbering the primary residence of that consumer for the
purposes of paying for home improvements and where the transaction is
part of a pattern or practice in violation of either subsection (h)
or (i) of Section 1639 of Title 15 of the United States Code or
paragraph (e) of Section 226.32 of Title 12 of the Code of Federal
Regulations.
   A third party shall not be liable under this subdivision unless
(A) there was an agency relationship between the party who engaged in
home solicitation and the third party or (B) the third party had
actual knowledge of, or participated in, the unfair or deceptive
transaction. A third party who is a holder in due course under a home
solicitation transaction shall not be liable under this subdivision.

   (24) (A) Charging or receiving an unreasonable fee to prepare,
aid, or advise any prospective applicant, applicant, or recipient in
the procurement, maintenance, or securing of public social services.
   (B) For purposes of this paragraph, the following definitions
shall apply:
   (i) "Public social services" means those activities and functions
of state and local government administered or supervised by the State
Department of Health Care Services, the State Department of Public
Health, or the State Department of Social Services, and involved in
providing aid or services, or both, including health care services,
and medical assistance, to those persons who, because of their
economic circumstances or social condition, are in need of that aid
or those services and may benefit from them.
   (ii) "Public social services" also includes activities and
functions administered or supervised by the United States Department
of Veterans Affairs or the California Department of Veterans Affairs
involved in providing aid or services, or both, to veterans,
including pension benefits.
   (iii) "Unreasonable fee" means a fee that is exorbitant and
disproportionate to the services performed. Factors to be considered,
when appropriate, in determining the reasonableness of a fee, are
based on the circumstances existing at the time of the service and
shall include, but not be limited to, all of the following:
   (I) The time and effort required.
   (II) The novelty and difficulty of the services.
   (III) The skill required to perform the services.
   (IV) The nature and length of the professional relationship.
   (V) The experience, reputation, and ability of the person
providing the services.
   (C) This paragraph shall not apply to attorneys licensed to
practice law in California, who are subject to the California Rules
of Professional Conduct and to the mandatory fee arbitration
provisions of Article 13 (commencing with Section 6200) of Chapter 4
of Division 3 of the Business and Professions Code, when the fees
charged or received are for providing representation in
administrative agency appeal proceedings or court proceedings for
purposes of procuring, maintaining, or securing public social
services on behalf of a person or group of persons.
   (25) (A) Advertising or promoting any event, presentation,
seminar, workshop, or other public gathering regarding veterans'
benefits or entitlements that does not include the following
statement in the same type size and font as the term "veteran" or any
variation of that term:
   (i) "I am not authorized to file an initial application for
Veterans' Aid and Attendance benefits on your behalf, or to represent
you before the Board of Veterans' Appeals within the United States
Department of Veterans Affairs in any proceeding on any matter,
including an application for such benefits. It would be illegal for
me to accept a fee for preparing that application on your behalf."
The requirements of this clause do not apply to a person licensed to
act as an agent or attorney in proceedings before the Agency of
Original Jurisdiction and the Board of Veterans' Appeals within the
United States Department of Veterans Affairs when that person is
offering those services at the advertised event.
   (ii) The statement in clause (i) shall also be disseminated, both
orally and in writing, at the beginning of any event, presentation,
seminar, workshop, or public gathering regarding veterans' benefits
or entitlements.
   (B) Advertising or promoting any event, presentation, seminar,
workshop, or other public gathering regarding veterans' benefits or
entitlements which is not sponsored by, or affiliated with, the
United States Department of Veterans Affairs, the California
Department of Veterans Affairs, or any other congressionally
chartered or recognized organization of honorably discharged members
of the Armed Forces of the United States, or any of their auxiliaries
that does not include the following statement, in the same type size
and font as the term "veteran" or the variation of that term:

   "This event is not sponsored by, or affiliated with, the United
States Department of Veterans Affairs, the California Department of
Veterans Affairs, or any other congressionally chartered or
recognized organization of honorably discharged members of the Armed
Forces of the United States, or any of their auxiliaries. None of the
insurance products promoted at this sales event are endorsed by
those organizations, all of which offer free advice to veterans about
how to qualify and apply for benefits."

   (i) The statement in this subparagraph shall be disseminated, both
orally and in writing, at the beginning of any event, presentation,
seminar, workshop, or public gathering regarding veterans' benefits
or entitlements.
   (ii) The requirements of this subparagraph shall not apply in a
case where the United States Department of Veterans Affairs, the
California Department of Veterans Affairs, or other congressionally
chartered or recognized organization of honorably discharged members
of the Armed Forces of the United States, or any of their auxiliaries
have granted written permission to the advertiser or promoter for
the use of its name, symbol, or insignia to advertise or promote the
event, presentation, seminar, workshop, or other public gathering.
   (b) (1) It is an unfair or deceptive act or practice for a
mortgage broker or lender, directly or indirectly, to use a home
improvement contractor to negotiate the terms of any loan that is
secured, whether in whole or in part, by the residence of the
borrower and which is used to finance a home improvement contract or
any portion thereof. For purposes of this subdivision, "mortgage
broker or lender" includes a finance lender licensed pursuant to the
California Finance Lenders Law (Division 9 (commencing with Section
22000) of the Financial Code), a residential mortgage lender licensed
pursuant to the California Residential Mortgage Lending Act
(Division 20 (commencing with Section 50000) of the Financial Code),
or a real estate broker licensed under the Real Estate Law (Division
4 (commencing with Section 10000) of the Business and Professions
Code).
   (2) This section shall not be construed to either authorize or
prohibit a home improvement contractor from referring a consumer to a
mortgage broker or lender by this subdivision. However, a home
improvement contractor may refer a consumer to a mortgage lender or
broker if that referral does not violate Section 7157 of the Business
and Professions Code or any other provision of law. A mortgage
lender or broker may purchase an executed home improvement contract
if that purchase does not violate Section 7157 of the Business and
Professions Code or any other provision of law. Nothing in this
paragraph shall have any effect on the application of Chapter 1
(commencing with Section 1801) of Title 2 to a home improvement
transaction or the financing thereof.
  SEC. 2.  Section 785.4 is added to the Insurance Code, to read:
   785.4.  (a) It shall be unlawful for any insurance agent who is
not licensed as an attorney to deliver to a person who is 65 years of
age or older, a living trust or other legal document, other than an
insurance contract or other insurance product document, if a purpose
of the delivery is to sell an insurance product.
   (b) It shall be unlawful for any insurance agent who is licensed
as an attorney to deliver to a person who is 65 years of age or
older, a living trust or other legal document, other than an
insurance contract or other insurance product document, unless the
insurance agent complies with Section 6175.3 of the Business and
Professions Code.
  SEC. 3.  Section 787 of the Insurance Code is amended to read:
   787.  Any advertisement or other device designed to produce leads
based on a response from a potential insured that is directed towards
persons 65 years of age or older shall prominently disclose that an
agent may contact the applicant if that is the fact. In addition, an
agent who makes contact with a person as a result of acquiring that
person's name from a lead generating device shall disclose that fact
in the initial contact with the person.
   (a) An insurer, agent, broker, solicitor, or other person or other
entity shall not solicit persons 65 years of age and older in this
state for the purchase of disability insurance, life insurance, or
annuities through the use of a true name or fictitious name that is
deceptive or misleading with regard to the status, character, or
proprietary or representative capacity of the entity or person, or to
the true purpose of the advertisement.
   (b) For the purposes of this section, an advertisement includes
envelopes, stationery, business cards, worksheets, questionnaires, or
other materials designed to describe and encourage the purchase of a
policy or certificate of disability insurance, life insurance, or an
annuity, or to collect personal or financial information about a
prospective insured or purchaser of an annuity.
   (c) Advertisements shall not employ words, letters, initials,
symbols, or other devices that are so similar to those used by
governmental agencies, a nonprofit or charitable institution,
veterans organization or agency, senior organization, or other
insurer that they could have the capacity or tendency to mislead the
public. Examples of misleading materials include, but are not limited
to, those which imply any of the following:
   (1) The advertised coverages are somehow provided by or are
endorsed by any governmental agencies, nonprofit or charitable
institutions, veterans organizations or agencies, or senior
organizations.
   (2) The advertiser is the same as, is connected with, or is
endorsed by governmental agencies, nonprofit or charitable
institutions, veterans organizations or agencies, or senior
organizations.
   (d) An advertisement may not use the name of a state or political
subdivision thereof in a policy name or description.
   (e) An advertisement may not use any name, service mark, slogan,
symbol, or any device in any manner that implies that the insurer, or
the policy or certificate advertised, or that any agency that may
call upon the consumer in response to the advertisement, is connected
with a governmental agency, such as the federal Social Security
Administration or the United States Department of Veterans Affairs.
   (f) An advertisement may not imply that the reader may lose a
right, or privilege, or benefits under federal, state, or local law
if he or she fails to respond to the advertisement.
   (g) An insurer, agent, broker, or other entity may not use an
address so as to mislead or deceive as to the true identity,
location, or licensing status of the insurer, agent, broker, or other
entity.
   (h) An insurer may not use, in the trade name of its insurance
policy or certificate, any terminology or words so similar to the
name of a governmental agency, governmental program, or veterans
organization or agency as to have the capacity or the tendency to
confuse, deceive, or mislead a prospective purchaser.
   (i) All advertisements used by agents, producers, brokers,
solicitors, or other persons for a policy of an insurer shall have
written approval of the insurer before they may be used.
   (j) An insurer, agent, broker, or other entity may not solicit a
particular class by use of advertisements which state or imply that
the occupational or other status as members of the class entitles
them to reduced rates on a group or other basis when, in fact, the
policy or certificate being advertised is sold on an individual basis
at regular rates.
   (k) In addition to any other prohibition on untrue, deceptive, or
misleading advertisements, no advertisement for an event where
insurance products will be offered for sale at, or as a result of,
the event may use the terms "seminar," "class," "informational
meeting," "benefits assistance," "qualification information," or
substantially equivalent terms to characterize the purpose of the
public gathering or event unless it adds the words "and insurance
sales presentation" immediately following those terms in the same
type size and font as those terms.
   (l) Any advertisement for an event, presentation, seminar,
workshop, or other public gathering regarding veterans' benefits or
entitlements is required to comply with the requirements of paragraph
(25) of subdivision (a) of Section 1770 of the Civil Code.
  SEC. 4.  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) A 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 and no more than 14 days 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 a stand-alone
document, with the appropriate information inserted and without any
attachments. It shall be written in 16-point bold type and include
all of the following, but no other, information:
   (1) The agent's full name as it appears on his or her California
insurance license.
   (2) The agent's license number.
   (3) The agent's mailing address and telephone number listed on his
or her California insurance license.
   (4) The following disclosure:
   (A) "I am a licensed insurance agent. My purpose for coming to
your home is to sell, discuss, and/or deliver one of the following
indicate all that apply]:
   ( ) Life insurance, including annuities.
   ( ) Other insurance products specify]: _________________.
   (B) You have the right to have other persons present at the
meeting, including family members, financial advisors, or attorneys.
   (C) You have the right to end the meeting at any time.
   (D) 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]
   (E) 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 name 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.