BILL NUMBER: AB 565	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 28, 2015
	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member Cooley

                        FEBRUARY 24, 2015

   An act to  add and repeal Section 10191.5  
amend Section 10270.6  of the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 565, as amended, Cooley.  Interstate Insurance Product
Regulation Compact: independent study.   Group
disability insurance: required provisions.  
   Existing law provides for the regulation of specified insurance
products, including group disability insurance, by the Insurance
Commissioner. Existing law requires a group disability master
insurance policy to include a provision that the insurer will issue
to the policyholder for delivery to an individual insured under the
policy an individual certificate that sets forth a statement as to
the insurance protection to which he or she is entitled and to whom
it is payable.  
   This bill would provide that instead the insurer may include in
the master insurance policy a provision that the insurer will issue
the certificate directly to the insured individual. This bill would
make other technical, nonsubstantive changes.  
   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.  
   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. 
   Vote: majority. Appropriation: no. Fiscal committee:  yes
  no  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 10270.6 of the  
Insurance Code   is amended to read: 
   10270.6.  Every group disability master policy shall contain the
following provisions:
   (a) A provision that the policy, the application of the 
policyholder   policyholder,  and the individual
applications, if any, of the individuals insured shall constitute the
entire contract between the parties, and that all statements made by
the policyholder, or by the individuals insured shall, in the
absence of fraud, be deemed representations and not warranties, and
that no such statement shall be used in defense to a claim under the
policy, unless it is contained in a written  application;
  application. 
   (b) A provision that the insurer will issue to the policyholder
for delivery to the individuals insured under  such 
 that  policy,  or a provision that the insurer will
issue directly to the insured,  an individual certificate
setting forth a statement as to the insurance protection to which he
 or she  is entitled and to whom  payable; 
 payable. 
   (c) A provision that to the group or class thereof originally
insured shall be added from time to time all new employees, members
or pupils of the policyholder eligible to and applying for insurance
in  such   that  group or  class;
  class. 
   (d) A statement that  such   the  policy
is not in lieu of and does not affect any requirement for coverage
by workmen's compensation insurance. 
  SECTION 1.    Section 10191.5 is added to the
Insurance Code, to read:
   10191.5.  (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.