BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1512


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1512 (Committee on Insurance)


          As Amended  June 1, 2015


          Majority vote


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          |ASSEMBLY:  |79-0  |(April 16,     |SENATE: |37-0  |(June 22, 2015)  |
          |           |      |2015)          |        |      |                 |
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          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