BILL NUMBER: AB 387 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 2, 2015
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, and to add
Section Sections 10191.1 to,
and to add and repeal Section 10191.5 of,
10191.5 to, 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 advise and
present recommendations to a request that a
multistate regulatory support organization, which is
authorized to organization commission
and pay for an independent a 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 solicited, nonpublic
funds are received for that purpose. Commission. The
bill would prohibit the use of moneys from the General Fund or the
Insurance Fund to carry out the study. The bill would
authorize the commissioner to comment on the final study
and would require the commissioner to submit the study to the
Legislature, as specified, no later than January 1, 2017.
The bill would repeal those provisions on January 1, 2021.
specified, upon its completion.
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 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 request that a
multistate regulatory support organization, which is
authorized to organization commission
an independent a 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.
(3)
(2) The independent
commissioner's request for the study described in paragraph (1)
shall, shall include a request that the
study be completed no later than January 1, 2017, and that the study,
to the extent feasible, 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) Subject to paragraph (2), Upon
completion of the study described in paragraph (1) of
subdivision (a), the commissioner shall submit the
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. insurance. The study shall be submitted in
compliance with Section 9795 of the Government Code.
(2) The commissioner may review and approve the
final study prior to its submission to the Legislature.
Legislature, and submit written comments on the
results of the study to the Legislature when submitting the study to
the Legislature pursuant to paragraph (1).
(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.