BILL NUMBER: AB 387 CHAPTERED
BILL TEXT
CHAPTER 691
FILED WITH SECRETARY OF STATE OCTOBER 9, 2015
APPROVED BY GOVERNOR OCTOBER 9, 2015
PASSED THE SENATE SEPTEMBER 8, 2015
PASSED THE ASSEMBLY SEPTEMBER 11, 2015
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 Sections 10191.1 and
10191.5 to, the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 387, 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 request that a
multistate regulatory support organization commission 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. 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, 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.
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 request that a multistate
regulatory support organization commission 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) The commissioner's request for the study described in
paragraph (1) 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) Upon completion of the study described in paragraph (1) of
subdivision (a), the commissioner shall submit the study to the
Chairpersons of the Assembly and Senate committees on insurance. The
study shall be submitted in compliance with Section 9795 of the
Government Code.
(2) The commissioner may review the final study prior to its
submission to the 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) No moneys from the General Fund or the Insurance Fund may be
used to implement this section.
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.