BILL NUMBER: AB 387 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 31, 2015
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, 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: 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
advise and present recommendations to a multistate
regulatory support organization, which is authorized to commission
and pay for 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 are received
for that purpose. The bill would require the commissioner to submit
the report study 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 pass 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: 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 advise and present
recommendations to a multistate regulatory support organization,
which is authorized to 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) Notwithstanding any other provision of law, the independent
study described in paragraph (1) is not a personal services contract
as described in Section 19130 of the Government Code.
(2)
(3) The report independent
study 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 Subject to paragraph (2), the
commissioner shall submit the report
independent study 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
study shall be made
submitted in compliance with Section 9795 of the Government
Code.
(2) The commissioner shall have the right to
may review and approve the final report
study prior to its submission to the Legislature.
(c) The independent study described in paragraph
(1) of subdivision (a) shall be commissioned and paid for by a
multistate regulatory support organization, subject to the advice and
recommendations of the commissioner. 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.
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.