BILL ANALYSIS Ó
SB 1170
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SENATE THIRD READING
SB 1170 (Leno)
As Amended May 1, 2012
Majority vote
SENATE VOTE :38-0
INSURANCE 13-0 JUDICIARY 10-0
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|Ayes:|Solorio, Hagman, |Ayes:|Feuer, Wagner, Atkins, |
| |Bradford, Fong, Carter, | |Dickinson, Gorell, Huber, |
| |Feuer, Beth Gaines, | |Jones, Monning, |
| |Hayashi, Miller, Olsen, | |Wieckowski, Bonnie |
| |Skinner, Torres, | |Lowenthal |
| |Wieckowski | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
| | | | |
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SUMMARY : Expands consumer protections governing the sale of
insurance to seniors, and adds specific protections for senior
veterans. Specifically, this bill :
1)Makes it an unfair sales practice to fail to disclose to a
veteran, in connection with advertising for events, seminars,
workshops and related activities concerning veterans benefits,
that the promoters are not authorized to represent veterans in the
application for or appeal of the denial of veteran's benefits.
2)Requires this disclosure to be made in at least the same size type
as the word "veteran" or similar word is used in the advertising,
and requires the disclosure to be repeated both orally and in
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writing at the beginning of the event.
3)Makes it an unfair sales practice for any advertising for a
veterans event, seminar, workshop and related activity that is not
sponsored by the California Department of Veterans Affairs or the
United States Department of Veterans Affairs (VA), or other
Congressionally designated veterans organization, to fail to
contain a specific statement that the event is not sponsored by
these governmental agencies.
4)Prohibits an insurance agent who is not an attorney from
delivering to any person 65 years of age or older a living trust
or other legal document if the purpose is to sell the senior an
insurance product.
5)Prohibits an insurance agent who is an attorney from delivering a
living trust or other legal document to a person 65 years of age
or older, if the purpose is to sell the senior an insurance
product, unless a detailed disclosure that is currently required
of attorneys is provided by the insurance agent.
6)Expands the definition of "advertisement" in the senior insurance
consumer protection law.
7)Adds veterans' organizations to the list of entities whose logos
may not be copied or used, or similar images created, in a manner
that implies endorsement by or a connection with that
organization.
8)Prohibits use of terminology in written materials that is similar
to or could deceive the prospective senior purchaser that the
policy is offered by a veterans' organization.
9)Prohibits advertising for products intended to be sold to seniors
to imply that the sale is endorsed or associated with the Social
Security Administration or Department of Veterans Affairs.
10)Requires a specified notice, that current law requires to be
provided at least 24 hours before a visit to the home of a senior
to sell insurance, be provided no earlier than 14 days prior to
the visit, and requires this notice to be in at least 16-point
font in a stand-alone document.
11)Requires this notice to contain the agent's full name, license
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number, telephone number and address, and contain specific
statements that "I am a licensed insurance agent" and "My purpose
for coming to your home is to sell, discuss, or deliver" an
insurance product.
FISCAL EFFECT : The Assembly Appropriations Committee determined
that costs associated with this legislation are minor and would be
absorbable within existing California Department of Insurance
resources.
COMMENTS : According to the author, despite certain consumer
protections for veterans in connection with various veterans'
benefits, insurance agents have been targeting higher wealth
veterans with misleading and abusive marketing strategies that have
less to do with legitimate financial management and more to do with
selling these veterans insurance products. In addition, the bill is
aimed at preventing inappropriate charges for "assisting" veterans
in the application for, or appeal of the denial of, veterans'
benefits.
The Aid and Attendance Program is a federal VA program designed for
low-wealth veterans who cannot afford medical supplies or in-home
care services. According to a recent General Accounting Office
(GAO) study, the program is being abused by insurance agents and
others who arrange with wealthier veterans to have their assets
placed in trusts or deferred annuities, thereby qualifying them for
benefits. The GAO report also found that inappropriate fees were
being charged to these veterans despite the federal program's ban on
fees to assist a veteran to apply for benefits.
For the past decade, there has been an ongoing legislative focus on
the financial abuse of seniors, but these efforts have not focused
specifically on some of the issues that directly affect veterans.
It appears that efforts to protect seniors generally have focused
some of the less scrupulous market participants who find unique ways
to take advantage of certain seniors, in this case those who might
be eligible for federal benefits.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
FN:
0004814
SB 1170
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