BILL ANALYSIS Ó AB 1512 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1512 (Committee on Insurance) As Amended June 1, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |79-0 |(April 16, |SENATE: |37-0 |(June 22, 2015) | | | |2015) | | | | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: INS. SUMMARY: Exempts certain employer-paid disability income policies from the recently enacted right to designate a third party to receive notices of termination. The Senate amendments clarify which disability income policies this exemption applies to. EXISTING LAW: Provides, starting January 1, 2016, that the policyholder of defined insurance policies has a right to designate a third party who must be notified by the insurer, in addition to any notice to the policyholder, that the policy is at risk of lapsing due to the failure to have paid the premium. FISCAL EFFECT: None AB 1512 Page 2 COMMENTS: The recently enacted right to designate a third party who will receive lapse notices is intended to protect policyholders who, for any reason, but commonly due to age, infirmity, mental deterioration, or extensive travel, fail to respond to lapse notices on their insurance policies. In cases of employer paid insurance, the actual policyholder never receives these notices, so it makes little sense to mandate an insurer to provide notice to a designated third party. This clarification satisfies a commitment made late last Session to clarify the issue prior to the January 1, 2016, effective date. Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0000993