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 tobegin delete advise and present recommendations to aend deletebegin insert request that aend insert multistate regulatory supportbegin delete organization, which is authorized toend deletebegin insert
organizationend insert commissionbegin delete and pay for an independentend deletebegin insert aend insert 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 Regulationbegin delete Commission, to the extent solicited, nonpublic funds are received for that purpose.end deletebegin insert Commission. The bill would prohibit the use of moneys from the General Fund or the Insurance Fund to carry out the study.end insert The billbegin insert would authorize
the commissioner to comment on the final study andend insert would require the commissioner to submit the study to the Legislature, asbegin delete specified, no later than January 1, 2017. The bill would repeal those provisions on January 1, 2021.end deletebegin insert specified, upon its completion.end insert
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 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 10191.1 is added to the Insurance Code,
2to read:
(a) In order to streamline the department’s file review
4process for life and disability insurance forms, the commissioner
5may develop and publish all of the following:
P3 1(1) Procedural requirements for file submission.
2(2) Guidelines and checklists that list and interpret applicable
3required and optional insurance statutes and regulations.
4(3) Standard insurance contract language previously approved
5by the department.
6(b) Documented use of the published standards described in
7paragraphs
(1) to (3), inclusive, of subdivision (a) will enable the
8
department to expedite its review process. In order to expedite file
9review, an expanded cover letter, in a format published by the
10department, shall be used to clearly document and demonstrate
11compliance with those standards.
12(c) A publication developed pursuant to this section shall be
13made available on a dedicated page of the department’s Internet
14Web site.
Section 10191.5 is added to the Insurance Code, to
16read:
(a) (1) The commissioner shallbegin delete advise and present begin insert request that aend insert multistate regulatory support
18recommendations to aend delete
19begin delete organization, which is authorized toend deletebegin insert organizationend insert commissionbegin delete an begin insert aend insert
study to examine and report on the extent to which
20independentend delete
21the uniform standards set forth in the Interstate Insurance Product
22Regulation Compact developed by the Interstate Insurance Product
23Regulation Commission provide consumer protections that are
24equivalent to those established under state law for annuity, life,
25disability income, and long-term care insurance products.
26(2) Notwithstanding any other provision of law, the independent
27study described in paragraph (1) is not a personal services contract
28as described in Section 19130 of the Government Code.
25 29(3)
end delete
30begin insert(2)end insert Thebegin delete independentend deletebegin insert
commissioner’s request for theend insert study
31described in paragraph (1)begin delete shall,end deletebegin insert shall include a request that the
32study be completed no later than January 1, 2017, and that the
33study,end insert to the extent feasible, highlight the substantive differences
34between the uniform standards set forth in the Interstate Insurance
35Product Regulation Compact and the statutory requirements under
36state law for annuity, life, disability income, and long-term care
37insurance products.
38(b) (1) begin deleteSubject to paragraph (2), end deletebegin insertUpon
completion of the study
39described in paragraph (1) of subdivision (a), end insertthe commissioner
40shall submit thebegin delete independentend delete studybegin delete described in paragraph (1) of to the Chairpersons of the Assembly and Senate
P4 1subdivision (a)end delete
2committees onbegin delete insurance no later than January 1, 2017.end deletebegin insert insurance.end insert
3 The study shall be submitted in compliance with Section 9795 of
4the Government Code.
5(2) The commissioner may reviewbegin delete and approveend delete the final
study
6prior to its submission to thebegin delete Legislature.end deletebegin insert Legislature, and submit
7written comments on the results of the study to the Legislature
8when submitting the study to the Legislature pursuant to paragraph
9(1).end insert
10(c) begin deleteThe independent study described in paragraph (1) of No
moneys from the General Fund or the Insurance Fund
11subdivision (a) shall be commissioned and paid for by a multistate
12regulatory support organization, subject to the advice and
13recommendations of the commissioner. This section shall be
14implemented only to the extent that solicited, nonpublic funds are
15received and made available for the commission of the independent
16study. end delete
17may be used to implement this section.
18(d) This section shall remain in effect only until January 1, 2021,
19and as of that date is repealed, unless a later enacted statute,
that
20is enacted before January 1, 2021, deletes or extends that date.
Section 10290 of the Insurance Code is amended to
22read:
A disability policy shall not be issued or delivered to
24any person in this state until both of the following conditions are
25met:
26(a) A copy of the form thereof and, if more than one class of
27risks is written, of the classification of risks, and the premium rates
28pertaining thereto are filed with the commissioner.
29(b) Either of the following occurs:
30(1) One hundred twenty calendar days expire without notice
31from the commissioner after the copy is filed.
32(2) The commissioner gives his or
her written approval prior to
33that time.
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