California Legislature—2015–16 Regular Session

Assembly Bill No. 1131

Introduced by Assembly Member Dababneh

February 27, 2015

An act to amend Section 1633.3 of the Civil Code, and to amend Sections 38.5, 38.8, 663, 678, and 678.1 of the Insurance Code, relating to electronic records.

LEGISLATIVE COUNSEL’S DIGEST

AB 1131, as introduced, Dababneh. Insurance: electronic transmission.

Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers’ compensation policy.

Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.

This bill would authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements.

This bill would make conforming changes.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

SECTION 1.  

Section 1633.3 of the Civil Code, as amended
by Section 3 of Chapter 913 of the Statutes of 2014, is amended
to read:

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
and (c), this title applies to electronic records and electronic
signatures relating to a transaction.

(b) This title does not apply to transactions subject to the
following laws:

(1) A law governing the creation and execution of wills, codicils,
or testamentary trusts.

(2) Division 1 (commencing with Section 1101) of the Uniform
Commercial Code, except Sections 1206 and 1306.

(3) Divisions 3 (commencing with Section 3101), 4
(commencing with Section 4101), 5 (commencing with Section
5101), 8 (commencing with Section 8101), 9 (commencing with
Section 9101), and 11 (commencing with Section 11101) of the
Uniform Commercial Code.

(4) A law that requires that specifically identifiable text or
disclosures in a record or a portion of a record be separately signed,
including initialed, from the record. However, this paragraph does
not apply to Section 1677 or 1678 of this code or Section 1298 of
the Code of Civil Procedure.

(c) This title does not apply to any specific transaction described
in Section 17511.5 of the Business and Professions Code, Section
56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
1789.16, or 1793.23 of, Chapter 1 (commencing with Section
1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
2954.5 or 2963 of, Chapter 2b (commencing with Section 2981)
or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of
Division 3 of, Section 3071.5 of, Part 5 (commencing with Section
4000) of Division 4 of, or Part 5.3 (commencing with Section
6500) of Division 4 of this code, subdivision (b) of Section 18608
or Section 22328 of the Financial Code, Section 1358.15, 1365,
1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code,
Section 662, paragraph (2) of subdivision (a) of Section 663, 664,
667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678,
subdivisions (a) and (b) of Section 678.1, Section begin delete 786, 10113.7,
10127.7, 10127.9, 10127.10, end delete 10192.18, 10199.44, 10199.46,
10235.16, 10235.40, begin delete 10509.4, 10509.7, end delete 11624.09, or 11624.1 of
the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public
Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An
electronic record may not be substituted for any notice that is
required to be sent pursuant to Section 1162 of the Code of Civil
Procedure. Nothing in this subdivision shall be construed to
prohibit the recordation of any document with a county recorder
by electronic means.

(d) This title applies to an electronic record or electronic
signature otherwise excluded from the application of this title under
subdivision (b) when used for a transaction subject to a law other
than those specified in subdivision (b).

(e) A transaction subject to this title is also subject to other
applicable substantive law.

(f) The exclusion of a transaction from the application of this
title under subdivision (b) or (c) shall be construed only to exclude
the transaction from the application of this title, but shall not be
construed to prohibit the transaction from being conducted by
electronic means if the transaction may be conducted by electronic
means under any other applicable law.

(g) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 2.  

Section 38.5 of the Insurance Code, as amended by
Section 4 of Chapter 369 of the Statutes of 2013, is amended to
read:

38.5.  

(a)  begin insert (1) end insert begin insert   end insert Any written begin delete notice end delete begin insert record end insert required to be given
or mailed to any person by begin delete an insurer end delete begin insert a licensee end insert relating to any
insurance on risks or on operations in this state not excepted by
subdivision (a), begin delete (b), end delete (c), (d), (e), or (g) of Section 1851 from the
coverage of Chapter 9 (commencing with Section 1850.4) of Part
2 of Division 1 of this code may, if not excluded by subdivision
(b) or (c) of Section 1633.3 of the Civil Code, be provided by
electronic transmission pursuant to Title 2.5 (commencing with
Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each
party has agreed to conduct the transaction by electronic means
pursuant to Section 1633.5 of the begin delete Civil Code. end delete begin insert Civil Code, and if
the end insert begin insert licensee complies with the provisions of this section. A valid
electronic signature shall be sufficient for any provision of law
requiring a written s end insert ignature. begin delete The affidavit of the person who
initiated the electronic transmission, stating the facts of that
transmission into an information processing system outside of the
control of the sender or of any person that sent the electronic record
on behalf of the sender, is prima facie evidence that the notice was
transmitted and shall be sufficient proof of notice. Any notice
provided by electronic transmission shall be treated as if mailed
or given for the purposes of any provision of this code, except as
provided by subdivision (g) of Section 1633.15 of the Civil Code.
The insurance company shall maintain a system for confirming
that any notice or document that is to be provided by electronic
means has been sent in a manner consistent with Section 1633.15
of the Civil Code. A valid electronic signature shall be sufficient
for any provision of law requiring a written signature. The
insurance company shall retain a copy of the confirmation and
electronic signature, when either is required, with the policy
information so that they are retrievable upon request by the
Department of Insurance while the policy is in force and for five
years thereafter. end delete

begin delete

(b) The offer of renewal required by Sections 663 and 678, the
notice of conditional renewal required by Section 678.1, and the
offer of coverage or renewal or any disclosure required by Section
10086 and the offer of renewal for a workers’ compensation policy
may be provided by electronic transmission if an insurer complies
with all of the following:

end delete begin insert

(2) For purposes of this section, the definitions set forth in
Section 1633.2 of the Civil Code shall apply. The term “licensee”
means an insurer, agent, broker, or any other person who is
required to be licensed by the department.

end insert

begin insert (b) end insert begin insert   end insert begin insert In order to transmit a record electronically, a licensee shall
comply with all of the following: end insert

(1)  begin delete An insurer, or insurer’s end delete begin insert A licensee, or licensee’s end insert
representative, acquires the consent of the begin delete insured end delete begin insert person end insert to opt
in to receive the begin delete offer, notice, or disclosure end delete begin insert record end insert by electronic
transmission, and the begin delete insured end delete begin insert person end insert has not withdrawn that
consent, prior to providing the begin delete offer, notice, or disclosure end delete begin insert record end insert
by electronic transmission. begin delete An insured’s end delete begin insert A person’s end insert consent may
be acquired verbally, in writing, or electronically. If consent is
acquired verbally, the begin delete insurer end delete begin insert licensee end insert shall confirm consent in
writing or electronically. The begin delete insurer end delete begin insert licensee end insert shall retain a record
of the begin delete insured’s end delete begin insert person’s end insert consent to receive the begin delete offer, notice, or
disclosure end delete begin insert record end insert by electronic transmission with the policy
information so that it is retrievable upon request by the begin delete Department
of Insurance end delete begin insert department end insert while the policy is in force and for five
years thereafter.

(2)  begin delete An insurer end delete begin insert A licensee end insert discloses, in writing or electronically,
to the begin delete insured end delete begin insert person end insert all of the following:

(A) The opt in to receive the begin delete offer, notice, or disclosure end delete begin insert record end insert
by electronic transmission is voluntary.

(B) That the begin delete insured end delete begin insert person end insert may opt out of receiving the begin delete offer,
notice, or disclosure end delete begin insert record end insert by electronic transmission at any time,
and the process or system for the begin delete insured end delete begin insert person end insert to opt out.

(C)  A description of the begin delete offer, notice, or disclosure end delete begin insert record end insert that
the begin delete insured end delete begin insert person end insert will receive by electronic transmission.

(D) The process or system to report a change or correction in
the begin delete insured’s end delete begin insert person’s end insert email address.

(E) The begin delete insurer’s end delete begin insert licensee’s end insert contact information, which includes,
but is not limited to, a toll-free number or begin delete an insurer’s end delete begin insert the licensee’s end insert
Internet Web site address.

begin insert

(3) The disclosure required by paragraph (2) and the opt-in
consent language may be set forth in the application or in a
separate document that is part of the policy and shall be bolded
or otherwise set forth in a conspicuous manner. The person’s
signature shall be set forth immediately below the person’s opt-in
consent and shall be obtained before the application is completed.
The licensee shall retain a copy of the confirmation and electronic
signature, if either is required, with the policy information so that
each is retrievable upon request by the Department of Insurance
while the policy is in force and for five years thereafter.

end insert begin delete

(3) An insurer

end delete

begin insert (4) end insert begin insert   end insert begin insert If the transaction specifically involves the insured, the
licensee end insert shall include the insured’s email address on the policy
declaration page.

begin delete

(4) An insurer

end delete

begin insert (5) end insert begin insert   end insert begin insert The licensee end insert shall annually provide one free printed copy
of any begin delete offer, notice, or disclosure end delete begin insert record end insert described in this
subdivision upon request by begin delete the insured. end delete begin insert the person. end insert

begin delete

(5) An insurer

end delete

begin insert (6) end insert begin insert   end insert begin insert If a provision of this code requires a licensee to transmit a
record by regular mail, or does not specify a method of delivery,
and if the licensee is not otherwise prohibited from transmitting
the record electronically under subdivision (b) of Section 1633.8
of the Civil Code, then end insert begin insert the licensee end insert shall maintain a process or
system that can demonstrate that the begin delete offer, notice, or disclosure end delete
begin insert record end insert provided by electronic transmission was both sent and
received consistent with Section 1633.15 of the Civil Code. If a
different method of sending or receiving is agreed upon by the
begin delete insurer end delete begin insert licensee end insert and the begin delete insured end delete begin insert person end insert pursuant to Section 1633.15
of the Civil Code, begin delete an insurer end delete begin insert a licensee end insert shall comply with the
provisions of this subdivision. The begin delete insurer end delete begin insert licensee end insert shall retain and
document information so that the documentation and information
is retrievable upon request by the begin delete Department of Insurance end delete
begin insert department end insert while the current policy is in force and for five years
thereafter related to its process or system demonstrating that the
begin delete offer, notice, or disclosure end delete begin insert record end insert provided by electronic
transmission was sent to the begin delete insured end delete begin insert person end insert by the applicable
statutory regular mail delivery deadlines and received
electronically. The begin delete offer, notice, or disclosure end delete begin insert record end insert provided by
electronic transmission shall be treated as if mailed so long as the
begin delete insurer end delete begin insert licensee end insert delivers it to the begin delete insured end delete begin insert person end insert in compliance
with the applicable statutory regular mail delivery deadlines.

(A) Acceptable methods for begin delete an insurer end delete begin insert a licensee end insert to demonstrate
that the begin delete offer, notice, or disclosure end delete begin insert record end insert was sent to the begin delete insured end delete
begin insert person end insert include simple mail transfer protocol server log files
indicating transmission, or other methodologies indicating sent
transmission consistent with begin insert the end insert standards set forth in Section
1633.15 of the Civil Code.

(B) Acceptable methods for begin delete an insurer end delete begin insert the licensee end insert to
demonstrate that the begin delete offer, notice, or disclosure end delete begin insert record end insert was received
by the begin delete insured end delete begin insert person end insert include server log files indicating that the
email or application has been received, or log files showing that
the begin delete insured end delete begin insert person end insert logged into his or her secured account with the
begin delete insurer, end delete begin insert licensee end insert or other methodologies indicating received
transmission consistent with standards set forth in Section 1633.15
of the Civil Code.

begin insert

(7) Notwithstanding subdivision (b) of Section 1633.8 of the
Civil Code, if a provision of this code requires a licensee to
transmit a record by return receipt, registered mail, certified mail,
signed written receipt of delivery, or other method of delivery
evidencing actual receipt by the person, and if the licensee is not
otherwise prohibited from transmitting the record electronically
under Section 1633.3 of the Civil Code, then the licensee shall
maintain a process or system that demonstrates proof of delivery
and actual receipt of the record by the person consistent with this
paragraph. The licensee shall document and retain information
demonstrating delivery and actual receipt so that it is retrievable,
upon request, by the department at least five years after the policy
is no longer in force. The record provided by electronic
transmission shall be treated as if actually received if the licensee
delivers it to the person in compliance with applicable statutory
delivery deadlines. A licensee may demonstrate actual delivery
and receipt by any of the following:

end insert begin insert

(A) The person acknowledges receipt of the electronic
transmission of the record by returning an electronic receipt or
by executing an electronic signature.

end insert begin insert

(B) The record is made part of, or attached to, an email sent to
the email address designated by the person, a confirmation receipt,
or some other evidence that the person received the email in his
or her email account and opened the email.

end insert begin insert

(C) The record is posted on the licensee’s secure Internet Web
site, evidence demonstrating that the person logged onto the
licensee’s secure Internet Web site and downloaded, printed, or
otherwise acknowledged receipt of the record.

end insert

begin insert (8) end insert begin insert   end insert begin insert Any record required to be transmitted by first-class mail
and not otherwise prohibited from being transmitted electronically
may be transmitted under the provisions of paragraph (6), except
that any notice of nonrenewal, lapse, cancellation, or termination
of a policy of life insurance that is not prohibited to be transmitted
electronically by subdivision (a), may be transmitted electronically,
only if the licensee demonstrates proof of electronic delivery and
receipt as set forth in paragraph (7). This paragraph applies to
any law that requires notice of nonrenewal, lapse, cancellation,
or termination of a policy of life insurance, including, but not
limited to, subdivision (b) of Section 10113.71 and subdivision (c)
of Section 10113.72. end insert

begin delete

(6)

end delete

begin insert (9) end insert  If the begin delete offer, notice, or disclosure end delete begin insert record end insert is not delivered
directly to the electronic address designated by the begin delete insured, end delete begin insert person end insert
but placed at an electronic address accessible to the begin delete insured, an
insurer end delete begin insert person, a licensee end insert shall notify the begin delete insured end delete begin insert person end insert in plain,
clear, and conspicuous language at the electronic address
designated by the begin delete insured end delete begin insert person end insert that describes the begin delete offer, notice,
or disclosure, end delete begin insert record, end insert informs that begin delete insured end delete begin insert person end insert that it is available
at another location, and provides instructions to the begin delete insured end delete begin insert person end insert
as to how to obtain the begin delete offer, notice, or disclosure. end delete begin insert record. end insert

begin delete

(7)

end delete

begin insert (10) end insert  (A) Upon begin delete an insurer end delete begin insert a licensee end insert receiving information
indicating that the begin delete offer, notice, or disclosure end delete begin insert record end insert sent by
electronic transmission was not received by the begin delete insured, the insurer end delete
begin insert person, the licensee end insert shall, within two business days, either clause
(i) or (ii):

(i) Contact the begin delete insured end delete begin insert person end insert to confirm or update the begin delete insured’s end delete
begin insert person’s end insert email address and resend the begin delete offer, notice, or disclosure end delete
begin insert record end insert by electronic transmission. If the begin delete insurer end delete begin insert licensee end insert elects to
resend the begin delete offer, notice, or disclosure end delete begin insert record end insert by electronic
transmission, the begin delete insurer end delete begin insert licensee end insert shall demonstrate the
transmission was received by the begin delete insured, end delete begin insert person, end insert pursuant to
paragraph begin delete (5) end delete begin insert (6), (7), or (8) end insert . If the begin delete insurer end delete begin insert licensee end insert is unable to
confirm or update the begin delete insured’s end delete begin insert person’s end insert email address, the begin delete insurer end delete
begin insert licensee end insert shall resend the begin delete offer, notice, or disclosure end delete begin insert record end insert by
regular mail to the begin delete insured end delete begin insert licensee end insert at the address shown on the
policy.

(ii) Resend the begin delete offer, notice, or disclosure end delete begin insert record end insert initially
provided by electronic transmission by regular mail to the insured
at the address shown on the policy.

(B) If the begin delete insurer end delete begin insert licensee end insert sends the first electronic begin delete offer, notice,
or disclosure end delete begin insert record end insert within the time period required by law and
the begin delete insurer end delete begin insert licensee end insert complies with both paragraph (5) and
subparagraph (A) of this paragraph, the electronic offer, notice,
or disclosure sent pursuant to clause (i) or (ii) of subparagraph (A)
shall be treated as if mailed in compliance with the applicable
statutory regular mail delivery deadlines.

begin insert

(11) The licensee shall not charge any person who declines to
opt in to receive a record through electronic transmission from
receiving a record electronically. The licensee shall not provide
a discount or an incentive to any person to induce or otherwise
encourage the person to opt in to receive electronic records.

end insert begin insert

(12) If a person has consented to receive records electronically
but a calendar year or more has elapsed since the last required
record for which consent was provided was electronically
transmitted by the licensee, the licensee shall verify, via paper
writing sent by regular mail, the accuracy of the person’s email
address.

end insert begin delete

(8)

end delete

begin insert (c) end insert  On or before January 1, 2018, the commissioner shall submit
a report to the Governor and to the committees of the Senate and
Assembly having jurisdiction over insurance and the judiciary,
regarding the impact and implementation of the authorization of
the electronic transmission of certain insurance renewal offers,
notices, or disclosures as authorized by this section. The report
shall include input from insurers, consumers, and consumer
organizations, and shall include an assessment of the department’s
experience pertaining to the authorization of the electronic
transmission of insurance renewals as authorized by this section.

begin insert

(d) Notwithstanding paragraph (4) of subdivision (b) of Section
1633.3 of the Civil Code, for any policy of life insurance, any
statutory requirement for a separate acknowledgment, signature,
or initial, which is not expressly prohibited by subdivision (c) of
Section 1633.3 of the Civil Code, may be transacted using an
electronic signature, or by electronic transaction, subject to all
applicable provisions of this section.

end insert begin delete

(c)

end delete

begin insert (e) end insert  The department may suspend begin delete an insurer end delete begin insert a licensee end insert from
providing begin delete offers, notices, or disclosures end delete begin insert records end insert by electronic
transmission if there is a pattern or practices that demonstrate the
begin delete insurer end delete begin insert licensee end insert has failed to comply with the requirements of this
section. begin delete An insurer end delete begin insert A licensee end insert may appeal the suspension and
resume its electronic transmission of begin delete offers, notices, or disclosures end delete
begin insert records end insert upon communication from the department that the changes
the begin delete insurer end delete begin insert licensee end insert made to its process or system to comply with
the requirements of this section are satisfactory.

begin delete

(d)

end delete

begin insert (f) end insert  This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 3.  

Section 38.8 of the Insurance Code is amended to read:

38.8.  

begin delete Insurers end delete begin insert Licensees end insert shall maintain a system for
electronically confirming a begin delete policyholder’s end delete begin insert person’s end insert decision to
opt in to an agreement to conduct transactions electronically and
a system that will allow the begin delete policyholder end delete begin insert person end insert to electronically
opt out of the agreement to conduct business electronically as
specified in subdivision (c) of Section 1633.5. The begin delete insurer end delete begin insert licensee end insert
shall maintain the electronic records for the same amount of time
the begin delete insurer end delete begin insert licensee end insert would be required to maintain those records
if the records were in written form.

SEC. 4.  

Section 663 of the Insurance Code, as amended by
Section 6 of Chapter 369 of the Statutes of 2013, is amended to
read:

663.  

(a) Before policy expiration, an insurer shall deliver or
mail to the named insured, at the address shown on the policy, one
of the following:

(1) At least 20 days before expiration, a written or verbal offer
of renewal of the policy, contingent upon payment of premium as
stated in the offer.

(2) At least 30 days before expiration, a written notice of
nonrenewal of the policy, including the statement required by
Section 666.

(b) (1) An insurer that delivers a verbal offer to renew that is
declined by an insured shall, at least 20 days before expiration of
the policy, deliver to or mail to the named insured, at the address
shown on the policy, a written confirmation of the offer and
rejection.

(2) An insurer that attempts to satisfy subdivision (a) with a
verbal offer to renew, but is unable to contact the named insured
directly at least 20 days before policy expiration, shall, at least 20
days before policy expiration, deliver to or mail to the named
insured, at the address shown on the policy, a written offer to renew
the policy, contingent upon payment of premium as stated in the
offer.

(c) In the event that an insurer fails to give the named insured
either an offer of renewal or notice of nonrenewal as required by
this section, the existing policy, with no change in its terms and
conditions, shall remain in effect for 30 days from the date that
either the offer to renew or the notice of nonrenewal is delivered
or mailed to the named insured. A notice to this effect shall be
provided by the insurer to the named insured with the policy or
the notice of renewal or nonrenewal. Notwithstanding the failure
of an insurer to comply with this section, the policy shall terminate
on the effective date of any other replacement or succeeding
automobile insurance policy procured by the insured, or his or her
agent or broker, with respect to any automobile designated in both
policies.

(d) The insurer shall not be required to notify the named insured,
or any other insured, of nonrenewal of the policy if the insurer has
mailed or delivered a notice of expiration or cancellation, on or
prior to the 30th day preceding expiration of the policy period.

begin delete

(e) The offer of renewal pursuant to this section may be provided
electronically to the email address shown on the policy if the
insurer complies with subdivision (b) of Section 38.5.

end delete begin delete

(f)

end delete

begin insert (e) end insert  This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 5.  

Section 678 of the Insurance Code, as amended by
Section 8 of Chapter 369 of the Statutes of 2013, is amended to
read:

678.  

(a) At least 45 days prior to policy expiration, an insurer
shall deliver to the named insured or mail to the named insured at
the address shown in the policy, either of the following:

(1) An offer of renewal of the policy contingent upon payment
of premium as stated in the offer, stating each of the following:

(A) Any reduction of limits or elimination of coverage.

(B) The telephone number of the insurer’s representatives who
handle consumer inquiries or complaints. The telephone number
shall be displayed prominently in a font size consistent with the
other text of the renewal offer.

(2) A notice of nonrenewal of the policy. That notice shall
contain each of the following:

(A) The reason or reasons for the nonrenewal.

(B) The telephone number of the insurer’s representatives who
handle consumer inquiries or complaints. The telephone number
shall be displayed prominently in a font size consistent with the
other text of the notice of nonrenewal.

(C) A brief statement indicating that if the consumer has
contacted the insurer to discuss the nonrenewal and remains
unsatisfied, he or she may have the matter reviewed by the
department. The statement shall include the telephone number of
the unit within the department that responds to consumer inquiries
and complaints.

(b) In the event an insurer fails to give the named insured either
an offer of renewal or notice of nonrenewal as required by this
section, the existing policy, with no change in its terms and
conditions, shall remain in effect for 45 days from the date that
either the offer to renew or the notice of nonrenewal is delivered
or mailed to the named insured. A notice to this effect shall be
provided by the insurer to the named insured with the policy or
the notice of renewal or nonrenewal.

(c) Any policy written for a term of less than one year shall be
considered as if written for a term of one year. Any policy written
for a term longer than one year, or any policy with no fixed
expiration date, shall be considered as if written for successive
policy periods or terms of one year.

(d) This section applies only to policies of insurance specified
in Section 675.

begin delete

(e) The offer of renewal pursuant to this section may be provided
electronically to the email address shown on the policy if the
insurer complies with subdivision (b) of Section 38.5.

(f)

end delete

begin insert (e) end insert  This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 6.  

Section 678.1 of the Insurance Code, as amended by
Section 10 of Chapter 369 of the Statutes of 2013, is amended to
read:

678.1.  

(a) This section applies only to policies of insurance
of commercial insurance that are subject to Sections 675.5 and
676.6.

(b) A notice of nonrenewal shall be in writing and shall be
delivered or mailed to the producer of record and to the named
insured at the mailing address shown on the policy. Subdivision
(a) of Section 1013 of the Code of Civil Procedure shall be
applicable if the notice is mailed.

(c) An insurer, at least 60 days, but not more than 120 days, in
advance of the end of the policy period, shall give notice of
nonrenewal, and the reasons for the nonrenewal, if the insurer
intends not to renew the policy, or to condition renewal upon
reduction of limits, elimination of coverages, increase in
deductibles, or increase of more than 25 percent in the rate upon
which the premium is based.

(d) If an insurer fails to give timely notice required by
subdivision (c), the policy of insurance shall be continued, with
no change in its terms or conditions, for a period of 60 days after
the insurer gives the notice.

(e) With respect to policies defined in subdivision (b) of Section
676.6, in addition to the bases for conditional renewal set forth in
subdivision (c), an insurer may also condition renewal upon
requirements relating to the underlying policy or policies. If the
requirements are not satisfied as of (1) the expiration date of the
policy, or (2) 30 days after mailing or delivery of such notice,
whichever is later, the conditional renewal notice shall be treated
as an effective notice of nonrenewal, provided the insurer has sent
written confirmation to the first named insured and the producer
of record that the conditions were not met and that coverage ceased
at the expiration date shown in the expiring policy.

(f) A notice of nonrenewal shall not be required in any of the
following situations:

(1) The transfer of, or renewal of, a policy without a change in
its terms or conditions or the rate on which the premium is based
between insurers that are members of the same insurance group.

(2) The policy has been extended for 90 days or less, if the
notice required in subdivision (c) has been given prior to the
extension.

(3) The named insured has obtained replacement coverage or
has agreed, in writing, within 60 days of the termination of the
policy, to obtain that coverage.

(4) The policy is for a period of no more than 60 days and the
insured is notified at the time of issuance that it may not be
renewed.

(5) The named insured requests a change in the terms or
conditions or risks covered by the policy within 60 days prior to
the end of the policy period.

(6) The insurer has made a written offer to the insured, within
the time period specified in subdivision (c), to renew the policy
under changed terms or conditions or at a changed premium rate.
As used herein, “terms or conditions” includes, but is not limited
to, a reduction in limits, elimination of coverages, or an increase
in deductibles.

begin delete

(g) The notice of conditional renewal described in subdivision
(c) may be provided electronically to the email address shown on
the policy if the insurer complies with subdivision (b) of Section
38.5.

(h)

end delete

begin insert (g) end insert  This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.