Amended in Senate September 1, 2015

Amended in Senate August 18, 2015

Amended in Senate June 29, 2015

Amended in Assembly May 14, 2015

Amended in Assembly May 4, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1131

Introduced by Assembly Member Dababneh

February 27, 2015

An act to begin delete amend and repeal end delete begin insert amend, add, and repeal end insert Section 1633.3 of the Civil Code, and to add and repeal Section 38.6 of the Insurance Code, relating to electronic records.

LEGISLATIVE COUNSEL’S DIGEST

AB 1131, as amended, 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, for life insurance records, 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. The bill would also require the commissioner to submit a report, as specified. The bill would exempt an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if begin insert the end insert insurance agent or broker meets various requirements, as specified.

This bill would make conforming changes.

begin insert

This bill would incorporate changes to Section 1633.3 of the Civil Code proposed by both this bill and AB 1097, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.

end insert

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 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 786 as it applies
to individual and group disability policies, Section 10192.18,
10199.44, 10199.46, 10235.16, 10235.40, 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.

begin insert

begin insert SEC. 1.5. end insert   

end insert

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

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 begin insert 786 as it applies to individual and
group disability policies, Section end insert 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.

begin insert

(g) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

end insert begin delete

(g)

end delete

begin insert (h) 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. 2.  

Section 1633.3 of the Civil Code, as amended by
Section 4 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, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies
to individual and group disability policies, 10192.18, 10199.44,
10199.46, 10235.16, 10235.40, 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 become operative on January 1, 2019.

(h) 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.

begin insert

begin insert SEC. 2.5. end insert   

end insert

begin insert Section 1633.3 of the end insert begin insert Civil Code end insert begin insert , as amended by
Section 4 of Chapter 913 of the Statutes of 2014, is amended to
read: end insert

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, 663, 664, 667.5, 673, 677, 678, 678.1, begin delete 786, 10086,
10113.7, 10127.7, 10127.9, 10127.10, end delete begin insert 786 as it applies to
individual and group disability policies, end insert 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.

begin insert

(g) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

end insert begin delete

(g)

end delete

begin insert (h) end insert  This section shall become operative on January 1, 2019.

begin insert

(i) 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.

end insert

begin delete

SEC. 3.  

Section 1633.3 of the Civil Code, as amended by
Section 4 of Chapter 913 of the Statutes of 2014, is amended to
read:

1633.3.  

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1633.3 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 1633.3. end insert   

end insert

(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, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086,
10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44,
10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 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 become operative on January 1, 2021.

begin insert

begin insert SEC. 3.5. end insert   

end insert

begin insert Section 1633.3 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 1633.3. end insert   

(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, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086,
10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44,
10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 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) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

(h) This section shall become operative on January 1, 2021.

end insert

SEC. 4.  

Section 38.6 is added to the Insurance Code, to read:

38.6.  

(a) (1) Any written record required to be given or mailed
to any person by a licensee relating to the business of life insurance,
as defined in Section 101 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 Civil Code,
and if the licensee complies with the provisions of this section. A
valid electronic signature shall be sufficient for any provision of
law requiring a written signature.

(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.

(3) Notwithstanding subdivision (l) of Section 1633.2 of the
Civil Code, for purposes of this section, “person” includes, but is
not limited to, the policy owner, policyholder, applicant, insured,
or assignee or designee of an insured.

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

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

(2) A licensee discloses, in writing or electronically, to the
person all of the following:

(A) The opt in to receive the record by electronic transmission
is voluntary.

(B) That the person may opt out of receiving the record by
electronic transmission at any time, and the process or system for
the person to opt out.

(C) A description of the record that the person will receive by
electronic transmission.

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

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

(3) The opt-in consent disclosure required by paragraph (2) may
be set forth in the application or in a separate document that is part
of the policy approved by the commissioner and shall be bolded
or otherwise set forth in a conspicuous manner. The person’s
signature shall be set forth immediately below the opt-in consent
disclosure. If the licensee seeks consent at any time prior to the
completion of the application, consent and signature shall be
obtained before the application is completed. If the person has not
opted in at the time the application is completed, the licensee may
receive the opt-in consent at any time thereafter, pursuant to the
same opt in requirements that apply at the time of the application.
The licensee shall retain a copy of the signed opt-in consent
disclosure with the policy information so that each is retrievable
upon request by the department while the policy is in force and
for five years thereafter.

(4) The email address of the person who has consented to
electronic transmission shall be set forth on the consent disclosure.
In addition, if the person who consented receives an annual
statement, the email address of the person who has consented shall
be set forth on that record.

(5) The licensee shall annually provide one free printed copy
of any record described in this subdivision upon request by the
person.

(6) If a provision of this code requires a licensee to transmit a
record by first class mail, regular mail, does not specify a method
of delivery, or is a record that is required to be provided pursuant
to Article 6.6 (commencing with Section 791), 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 the record may be transmitted by electronic transmission
if the licensee complies with all of the requirements of Sections
1633.15 and 1633.16 of the Civil Code.

(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 and the provisions of this
section, 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 the record to the person in
compliance with applicable statutory delivery deadlines. A licensee
may demonstrate actual delivery and receipt by any of the
following:

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

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

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

(D) If a licensee is unable to demonstrate actual delivery and
receipt pursuant to this paragraph, the licensee shall resend the
record by regular mail to the person in the manner originally
specified by the underlying provision of this code.

(8) Notwithstanding any other law, a notice of lapse,
nonrenewal, cancellation, or termination of any product subject to
this section may be transmitted electronically if the licensee
demonstrates proof of delivery as set forth in paragraph (7) and
complies with the other provisions in this section.

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

(10) (A) Upon a licensee receiving information indicating that
the record sent by electronic transmission was not received by the
person, the licensee shall, within five business days, comply with
either clause (i) or (ii):

(i) Contact the person to confirm or update the person’s email
address and resend the record by electronic transmission. If the
licensee elects to resend the record by electronic transmission, the
licensee shall demonstrate the transmission was received by the
person, pursuant to paragraph (6), (7), or (8). If the licensee is
unable to confirm or update the person’s email address, the licensee
shall resend the record by regular mail to the licensee at the address
shown on the policy, or, if the underlying statute requires delivery
in a specified manner, send the record in that specified manner.

(ii) Resend the record initially provided by electronic
transmission by regular mail to the insured at the address shown
on the policy, or, if the underlying statute requires delivery in a
specified manner, send the record in that specified manner.

(B) If the licensee sends the first electronic record within the
time period required by law and the licensee complies with both
paragraph (5) and subparagraph (A) of this paragraph, the record
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.

(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 opt in to receive electronic
records.

(12) The licensee shall verify a person’s email address via paper
writing sent by regular mail when more than 12 months have
elapsed since the license’s last electronic communication.

(c) An insurance agent or broker acting under the direction of
a party that enters into a contract by means of an electronic record
or electronic signature shall not be held liable for any deficiency
in the electronic procedures agreed to by the parties under that
contract if all of the following are met:

(1) The insurance agent or broker has not engaged in negligent,
reckless, or intentional tortious conduct.

(2) The insurance agent or broker was not involved in the
development or establishment of the electronic procedures.

(3) The insurance agent or broker did not deviate from the
electronic procedures.

(d) On or before January 1, 2020, 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.

(e) Notwithstanding paragraph (4) of subdivision (b) of Section
1633.3 of the Civil Code, for any policy of life insurance, as
defined in Section 101, 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.

(f) The department may suspend a licensee from providing
records by electronic transmission if there is a pattern or practices
that demonstrate the licensee has failed to comply with the
requirements of this section. A licensee may appeal the suspension
and resume its electronic transmission of records upon
communication from the department that the changes the licensee
made to its process or system to comply with the requirements of
this section are satisfactory.

(g) 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.

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

Sections 1.5, 2.5, and 3.5 of this bill incorporate
statutory changes to Section 1633.3 of the Civil Code proposed
by both this bill and Assembly Bill 1097. Those sections shall only
become operative if (1) both bills are enacted and become effective
on or before January 1, 2016, (2) each bill amends or adds Section
1633.3 of the Civil Code, and (3) this bill is enacted after Assembly
Bill 1097, in which case Sections 1, 2, and 3 of this bill shall not
become operative.

end insert