Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 565

Introduced by Assembly Member Cooley

February 24, 2015

An act to begin delete amend end delete begin insert add and repeal end insert Section begin delete 10191 of end delete begin insert 10191.5 of end insert the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 565, as amended, Cooley. begin delete Insurance contracts. end delete begin insert Interstate Insurance Product Regulation Compact: independent study. end insert

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Existing law provides for the regulation of insurers and specified insurance products, including life insurance, disability insurance, and long-term care insurance, by the Insurance Commissioner. Existing law directs the Insurance Commissioner to enforce the execution of laws regulating the business of insurance.

end insert begin insert

This bill would require the commissioner to commission an independent study to examine the extent to which the uniform standards set forth in the Interstate Insurance Product Regulation Compact provide consumer protections that are equivalent to those established under state law for annuity, life insurance, disability income, and long-term care insurance products, and would prohibit the use of General Fund or Insurance Fund moneys for this purpose. The bill would require the commissioner to submit the report to the chairpersons of the Assembly and Senate Committees on Insurance no later than January 1, 2017.

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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.

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This bill would make technical, nonsubstantive changes to this provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 10191.5 is added to the end insert begin insert Insurance Code end insert begin insert ,
to read: end insert

begin insert

begin insert 10191.5. end insert   

(a) (1) The commissioner shall commission an
independent study to examine 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 insurance,
disability income, and long-term care insurance products.

(2) The report 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 insurance,
disability income, and long-term care insurance products.

(b) (1) The commissioner shall submit the report 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 General Fund or
Insurance Fund moneys shall 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.

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SECTION 1.  

Section 10191 of the Insurance Code is amended
to read:

10191.  

(a) The commissioner may, from time to time as
conditions warrant, after notice and hearing, promulgate reasonable
rules and regulations, and amendments and additions to those rules
and regulations, as are necessary or advisable, to establish and
maintain a procedure for the filing and approval of documents, as
defined in this section, prior to their issuance, delivery, or use in
this state, in lieu of the requirements of submission, filing, or
approval for the documents presently provided in Section 10205,
10205.5, 10205.6, 10225, 10270, 10270.1, 10270.57, 10270.9,
10270.91, 10270.92, 10270.93, 10290, 10292, 11066, 11069, or
11658. For purposes of this section, “document” includes, but is
not limited to, every form of contract, insurance policy, application,
rider, endorsement, amendment, insert policy page, certificate, or
other evidence or notice of insurance, fill-in material, schedules
of rates and classifications of risks, and any modification to any
document, which is subject to the requirements of any of the
sections described in this subdivision.

(b) Any rule or regulation shall be promulgated in accordance
with the procedure provided in Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.

(c) In promulgating any rule or regulation, the commissioner
may give consideration to the following circumstances:

(1) Whether all documents, the submission, filing, or approval
of which is governed by any of the sections described in
subdivision (a), or only a portion of those documents described in
the rule or regulation, shall be subject to the rule or regulation.

(2) Whether certain documents or portions of those documents
should be regulated in respect of submission, filing, or approval
in a fashion differing from similar requirements applicable to other
documents.

(3) Whether varying procedures may be made applicable among
admitted insurers in respect of the submission, filing or approval
predicated, in whole or in part, upon the following factors: (A) the
age and size of the submitting insurer, (B) the period of its licensing
in this state for the class or classes of insurance represented by the
documents, (C) the nature and number of prior submissions of
similar documents and the disposition of those prior submissions
by the commissioner, (D) and similar criteria that is relevant to a
determination that the submitting insurer has demonstrated
compliance with all applicable statutes, rules, and regulations
relating to documents comprising prior submissions.

(d) In promulgating any rules and regulations, the commissioner
shall, so far as practical, describe or define certain provisions: (1)
that the commissioner will authorize without review when
accompanied by a certification prescribed by him or her by rule,
and (2) that the commissioner will under no circumstances approve.

(e) The commissioner shall establish a period of time, not shorter
than one year, during which any change in the provisions that
pursuant to subdivision (d), he or she has provided he or she will
under no circumstances approve, will not apply to policies filed
prior to the effective date of the change.

(f) Except as otherwise provided in this section, any document
approved by the commissioner pursuant to rules and regulations
authorized by this section may have its approval withdrawn in
accordance with subdivision (d) of Section 10291.5 or Section
12957, whichever is applicable.

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