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) |
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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