BILL NUMBER: AB 387 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 29, 2015
AMENDED IN ASSEMBLY APRIL 30, 2015
INTRODUCED BY Assembly Member McCarty
FEBRUARY 18, 2015
An act to amend Section 10290 of of, to
add Section 10191.1 to, and to add and repeal Section 10191.5 of,
the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 387, as amended, McCarty. Insurance: disability
policy: commissioner approval. life and disability
policies.
Existing law authorizes the Insurance Commissioner to promulgate,
from time to time as conditions warrant, after notice and hearing,
reasonable rules and regulations, and amendments and additions to
those rules and regulations, as are necessary or advisable in order
to establish and maintain a procedure for the filing and approval of
specified documents prior to their issuance, delivery, or use in this
state.
This bill would authorize the commissioner to develop and publish
procedural requirements, guidelines, and standard insurance contract
language for the purpose of streamlining and expediting the
Department of Insurance's file review process for life and disability
insurance forms. The bill would require an expanded cover letter to
be used to clearly document and demonstrate compliance with those
published standards, as specified, in order to expedite review. The
bill would require the department to make those published standards
available on the department's Internet Web site, as specified.
Existing law provides various protections for consumers of
annuity, life, disability income, and long-term care insurance
products, such as the requirement that the recommendation of an
insurer or an entity marketing an annuity or long-term care insurance
product regarding the purchase of those products be based on
suitability standards that are designed to ensure that the individual
consumer's needs are met.
This bill would require the commissioner to commission an
independent study to examine and report on the extent to which
consumer protections for annuity, life, disability income, and
long-term care insurance products differ from uniform standards
developed by the Interstate Insurance Product Regulation Commission,
to the extent the commissioner receives solicited, nonpublic funds
for that purpose. The bill would require the commissioner to submit
the report to the Legislature, as specified, no later than January 1,
2017. The bill would repeal those provisions on January 1, 2021.
Existing law provides for the licensing and regulation of
disability insurers by the Department of Insurance. Existing law
prohibits a disability policy from being issued until certain
requirements are met. One of these conditions is if either (1) 30
days passes without notice from the Insurance Commissioner after a
copy of the policy is filed with the commissioner; or (2) the
commissioner gives written approval prior to the expiration of the 30
days.
This bill would increase that time period to 120 calendar days.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10191.1 is added to the
Insurance Code , to read:
10191.1. (a) In order to streamline the department's file review
process for life and disability insurance forms, the commissioner may
develop and publish all of the following:
(1) Procedural requirements for file submission.
(2) Guidelines and checklists that list and interpret applicable
required and optional insurance statutes and regulations.
(3) Standard insurance contract language previously approved by
the department.
(b) Documented use of the published standards described in
paragraphs (1) to (3), inclusive, of subdivision (a) will enable the
department to expedite its review process. In order to expedite file
review, an expanded cover letter, in a format published by the
department, shall be used to clearly document and demonstrate
compliance with those standards.
(c) A publication developed pursuant to this section shall be made
available on a dedicated page of the department's Internet Web site.
SEC. 2. Section 10191.5 is added to the
Insurance Code , to read:
10191.5. (a) (1) The commissioner shall commission an independent
study to examine and report on the extent to which the uniform
standards set forth in the Interstate Insurance Product Regulation
Compact developed by the Interstate Insurance Product Regulation
Commission provide consumer protections that are equivalent to those
established under state law for annuity, life, disability income, and
long-term care insurance products.
(2) The report described in paragraph (1) shall, to the extent
feasible, also highlight the substantive differences between the
uniform standards set forth in the Interstate Insurance Product
Regulation Compact and the statutory requirements under state law for
annuity, life, disability income, and long-term care insurance
products.
(b) (1) The commissioner shall submit the report described in
paragraph (1) of subdivision (a) to the Chairpersons of the Assembly
and Senate committees on insurance no later than January 1, 2017. The
report shall be made in compliance with Section 9795 of the
Government Code.
(2) The commissioner shall have the right to review and approve
the final report prior to its submission to the Legislature.
(c) This section shall be implemented only to the extent that
solicited, nonpublic funds are received and made available for the
commission of the independent study. No moneys from the General Fund
or the Insurance Fund may be used to implement this section.
(d) This section shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2021, deletes or extends
that date.
SECTION 1. SEC. 3. Section 10290 of
the Insurance Code is amended to read:
10290. A disability policy shall not be issued or delivered to
any person in this state until both of the following conditions are
met:
(a) A copy of the form thereof and, if more than one class of
risks is written, of the classification of risks, and the premium
rates pertaining thereto are filed with the commissioner.
(b) Either of the following occurs:
(1) One hundred twenty calendar days expire without notice from
the commissioner after the copy is filed.
(2) The commissioner gives his or her written approval prior to
that time.