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