BILL ANALYSIS Ó
AB 1131
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1131 (Dababneh) - As Amended May 14, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill, until January 1, 2021, permits consumers to receive
documents and conduct some transactions related to life
insurance, disability insurance, and annuities electronically.
It also specifies requirements licensees must comply with in
AB 1131
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order to use electronic delivery.
FISCAL EFFECT:
Minor and absorbable costs to the California Department of
Insurance (CDI) to review and evaluate electronic transmission
processes and procedures, and to review documentation provided
to those consumers who have opted in to receive documents
electronically.
COMMENTS:
1)Purpose. According to the author, current law needs to be
updated to allow broader use of voluntary e-delivery and
e-signature of life insurance documents. Current law requires
many transactions to have a "wet signature." This has
prevented the life insurers from implementing a completely
electronic sales process, presenting challenges to customers
and agents, and undermining the benefits to insurers and
consumers of full electronic processing. This bill is
co-sponsored by CDI and the Association of California Life and
Health Insurance Companies.
2)Background. The California Uniform Electronic Transactions Act
(UETA) provides the law should be construed to facilitate
electronic transmissions and that any transaction not
specifically exempted from UETA may be conducted
electronically, subject to specific rules including opt-in and
opt-out provisions. However, current law prohibits the use of
electronic transactions for many insurance products.
Electronic signature has many benefits, including efficiency,
speed, and economy. This bill would allow electronic delivery
for some, but not all, insurance products.
3)Prior Legislation. SB 251 (Calderon), Chapter 369, Statutes of
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2013, allowed policy renewal notices for property/casualty
insurance policies to be delivered electronically. This bill
closely parallels the requirements of SB 251 as it relates to
notices and disclosures related to life insurance. However,
this bill allows for a broader range of electronic
transactions.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081