Amended in Assembly May 27, 2016

Amended in Assembly May 10, 2016

Amended in Assembly April 13, 2016

Amended in Assembly March 31, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2591


Introduced by Assembly Member Dababneh

(Coauthors: Assembly Members Travis Allen, Cristina Garcia, O'Donnell, Olsen, and Wilk)

(Coauthor: Senator Bates)

February 19, 2016


An act to begin insertrepeal and end insertamend Section 1633.3 of the Civil Code, and to amendbegin insert and addend insert Section 38.6 of, and to repeal Section 38.5 of, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 2591, as amended, Dababneh. Insurance: electronic transmission.

Existing law generally requires, with exceptions, that specified provisions of the Civil Code apply to electronic records and electronic signatures relating to a transaction.

This bill would remove various notices, including a policy cancellation notice by the named insured and a written notice of nonrenewal of the policy from the above exemptions, making those notices subject to the specified provisions of the Civil Code. The bill, commencing January 1, 2021, would reinstatebegin delete theend deletebegin insert certainend insert exemptions of those notices from the specified provisions of the Civil Code.

Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the requiredbegin delete offer of renewal orend deletebegin insert notice ofend insert conditional renewal forbegin delete propertyend deletebegin insert commercialend insert insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers’ compensation policy.

The bill would,begin insert until January 1, 2021,end insert for the above-specified records, authorize persons in addition to the insurer to send those records by electronic transmission by providing that an agent, broker, or any other person licensed by the Department of Insurance may send those records electronically, as specified.begin insert The bill, as of January 1, 2021, would no longer authorize the notice of conditional renewal for commercial insurance to be sent electronically.end insert

Existing law prohibits an insurer, relating to any insurance on risks or on operations in this state, including reinsurance, life insurance, insurance of vessels or craft, title insurance, and disability insurance, from sending a written notice by electronic transmission.

This bill would repeal the above prohibition, thereby allowing an insurer, relating to any insurance on risks or on operations in this state, including reinsurance, life insurance, insurance of vessels or craft, title insurance, and disability insurance, to send a written notice by electronic transmission.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete
P2    1

SECTION 1.  

Section 1633.3 of the Civil Code, as amended
2by Section 1.5 of Chapter 638 of the Statutes of 2015, is amended
3to read:

4

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
5and (c), this title applies to electronic records and electronic
6signatures relating to a transaction.

7(b) This title does not apply to transactions subject to the
8following laws:

P3    1(1) A law governing the creation and execution of wills, codicils,
2or testamentary trusts.

3(2) Division 1 (commencing with Section 1101) of the Uniform
4Commercial Code, except Sections 1206 and 1306.

5(3) Division 3 (commencing with Section 3101), Division 4
6(commencing with Section 4101), Division 5 (commencing with
7Section 5101), Division 8 (commencing with Section 8101),
8Division 9 (commencing with Section 9101), and Division 11
9(commencing with Section 11101) of the Uniform Commercial
10Code.

11(4) A law that requires that specifically identifiable text or
12disclosures in a record or a portion of a record be separately signed,
13including initialed, from the record. However, this paragraph does
14not apply to Section 1677 or 1678 of this code or Section 1298 of
15the Code of Civil Procedure.

16(c) This title does not apply to any specific transaction described
17in Section 17511.5 of the Business and Professions Code, Section
1856.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
19or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
20Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
211789.16, or 1793.23 of, Chapter 1 (commencing with Section
221801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
231917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
242924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
252945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
262954.5 or 2963 of, Chapter 2b (commencing with Section 2981)
27or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of
28Division 3 of, Section 3071.5 of, Part 5 (commencing with Section
294000) of Division 4 of, or Part 5.3 (commencing with Section
306500) of Division 4 of this code, subdivision (b) of Section 18608
31or Section 22328 of the Financial Code, Section 1358.15, 1365,
321368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code,
33 Section 786 as it applies to individual and group disability policies,
34Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40,
3511624.09, or 11624.1 of the Insurance Code, Section 779.1,
3610010.1, or 16482 of the Public Utilities Code, or Section 9975
37or 11738 of the Vehicle Code. An electronic record may not be
38substituted for any notice that is required to be sent pursuant to
39Section 1162 of the Code of Civil Procedure. Nothing in this
P4    1subdivision shall be construed to prohibit the recordation of any
2document with a county recorder by electronic means.

3(d) This title applies to an electronic record or electronic
4signature otherwise excluded from the application of this title under
5subdivision (b) when used for a transaction subject to a law other
6than those specified in subdivision (b).

7(e) A transaction subject to this title is also subject to other
8applicable substantive law.

9(f) The exclusion of a transaction from the application of this
10title under subdivision (b) or (c) shall be construed only to exclude
11the transaction from the application of this title, but shall not be
12construed to prohibit the transaction from being conducted by
13electronic means if the transaction may be conducted by electronic
14means under any other applicable law.

15(g) Notwithstanding subdivisions (b) and (c), this title shall
16apply to electronic records and electronic signatures relating to
17transactions conducted by a person licensed, certified, or registered
18pursuant to the Alarm Company Act (Chapter 11.6 (commencing
19with Section 7590) of Division 3 of the Business and Professions
20Code) for purposes of activities authorized by Section 7599.54 of
21the Business and Professions Code.

22(h) This section shall remain in effect only until January 1, 2019,
23and as of that date is repealed, unless a later enacted statute, that
24is enacted before January 1, 2019, deletes or extends that date.

end delete
25begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1633.3 of the end insertbegin insertCivil Codeend insertbegin insert, as amended by
26Section 1.5 of Chapter 638 of the Statutes of 2015, is repealed.end insert

begin delete
27

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
28and (c), this title applies to electronic records and electronic
29signatures relating to a transaction.

30(b) This title does not apply to transactions subject to the
31following laws:

32(1) A law governing the creation and execution of wills, codicils,
33or testamentary trusts.

34(2) Division 1 (commencing with Section 1101) of the Uniform
35Commercial Code, except Sections 1206 and 1306.

36(3) Divisions 3 (commencing with Section 3101), 4
37(commencing with Section 4101), 5 (commencing with Section
385101), 8 (commencing with Section 8101), 9 (commencing with
39Section 9101), and 11 (commencing with Section 11101) of the
40Uniform Commercial Code.

P5    1(4) A law that requires that specifically identifiable text or
2disclosures in a record or a portion of a record be separately signed,
3including initialed, from the record. However, this paragraph does
4not apply to Section 1677 or 1678 of this code or Section 1298 of
5the Code of Civil Procedure.

6(c) This title does not apply to any specific transaction described
7in Section 17511.5 of the Business and Professions Code, Section
856.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
9or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
10Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
111789.16, or 1793.23 of, Chapter 1 (commencing with Section
121801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
131917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
142924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
152945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
162954.5 or 2963 of, Chapter 2b (commencing with Section 2981)
17or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of
18Division 3 of, Section 3071.5 of, Part 5 (commencing with Section
194000) of Division 4 of, or Part 5.3 (commencing with Section
206500) of Division 4 of this code, subdivision (b) of Section 18608
21or Section 22328 of the Financial Code, Section 1358.15, 1365,
221368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code,
23Section 662, paragraph (2) of subdivision (a) of Section 663, 664,
24667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678,
25subdivisions (a) and (b) of Section 678.1, Section 786 as it applies
26 to individual and group disability policies, Section 10192.18,
2710199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1
28of the Insurance Code, Section 779.1, 10010.1, or 16482 of the
29Public Utilities Code, or Section 9975 or 11738 of the Vehicle
30Code. An electronic record may not be substituted for any notice
31that is required to be sent pursuant to Section 1162 of the Code of
32Civil Procedure. Nothing in this subdivision shall be construed to
33prohibit the recordation of any document with a county recorder
34by electronic means.

35(d) This title applies to an electronic record or electronic
36signature otherwise excluded from the application of this title under
37subdivision (b) when used for a transaction subject to a law other
38than those specified in subdivision (b).

39(e) A transaction subject to this title is also subject to other
40applicable substantive law.

P6    1(f) The exclusion of a transaction from the application of this
2title under subdivision (b) or (c) shall be construed only to exclude
3the transaction from the application of this title, but shall not be
4construed to prohibit the transaction from being conducted by
5electronic means if the transaction may be conducted by electronic
6means under any other applicable law.

7(g) Notwithstanding subdivisions (b) and (c), this title shall
8apply to electronic records and electronic signatures relating to
9transactions conducted by a person licensed, certified, or registered
10pursuant to the Alarm Company Act (Chapter 11.6 (commencing
11with Section 7590) of Division 3 of the Business and Professions
12Code) for purposes of activities authorized by Section 7599.54 of
13the Business and Professions Code.

14(h) This section shall remain in effect only until January 1, 2019,
15and as of that date is repealed, unless a later enacted statute, that
16is enacted before January 1, 2019, deletes or extends that date.

end delete
17

SEC. 2.  

Section 1633.3 of the Civil Code, as amended by
18Section 2.5 of Chapter 638 of the Statutes of 2015, is amended to
19read:

20

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
21and (c), this title applies to electronic records and electronic
22signatures relating to a transaction.

23(b) This title does not apply to transactions subject to the
24following laws:

25(1) A law governing the creation and execution of wills, codicils,
26or testamentary trusts.

27(2) Division 1 (commencing with Section 1101) of the Uniform
28Commercial Code, except Sections 1206 and 1306.

29(3) Divisions 3 (commencing with Section 3101), 4
30(commencing with Section 4101), 5 (commencing with Section
315101), 8 (commencing with Section 8101), 9 (commencing with
32Section 9101), and 11 (commencing with Section 11101) of the
33Uniform Commercial Code.

34(4) A law that requires that specifically identifiable text or
35disclosures in a record or a portion of a record be separately signed,
36including initialed, from the record. However, this paragraph does
37not apply to Section 1677 or 1678 of this code or Section 1298 of
38the Code of Civil Procedure.

39(c) This title does not apply to any specific transaction described
40in Section 17511.5 of the Business and Professions Code, Section
P7    156.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
2or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
3Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
41789.16, or 1793.23 of, Chapter 1 (commencing with Section
51801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
61917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
72924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
82945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
92954.5 or 2963 of, Chapter 2b (commencing with Section 2981)
10or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of
11Division 3 of, Section 3071.5 of Part 5 (commencing with Section
124000) of Division 4 of, or Part 5.3 (commencing with Section
136500) of Division 4 of this code, subdivision (b) of Section 18608
14or Section 22328 of the Financial Code, Section 1358.15, 1365,
151368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code,
16Section 786 as it applies to individual and group disability policies,
1710192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or
1811624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482
19of the Public Utilities Code, or Section 9975 or 11738 of the
20Vehicle Code. An electronic record may not be substituted for any
21notice that is required to be sent pursuant to Section 1162 of the
22Code of Civil Procedure. Nothing in this subdivision shall be
23construed to prohibit the recordation of any document with a county
24recorder by electronic means.

25(d) This title applies to an electronic record or electronic
26signature otherwise excluded from the application of this title under
27subdivision (b) when used for a transaction subject to a law other
28than those specified in subdivision (b).

29(e) A transaction subject to this title is also subject to other
30applicable substantive law.

31(f) The exclusion of a transaction from the application of this
32title under subdivision (b) or (c) shall be construed only to exclude
33the transaction from the application of this title, but shall not be
34construed to prohibit the transaction from being conducted by
35electronic means if the transaction may be conducted by electronic
36means under any other applicable law.

37(g) Notwithstanding subdivisions (b) and (c), this title shall
38apply to electronic records and electronic signatures relating to
39transactions conducted by a person licensed, certified, or registered
40pursuant to the Alarm Company Act (Chapter 11.6 (commencing
P8    1with Section 7590) of Division 3 of the Business and Professions
2Code) for purposes of activities authorized by Section 7599.54 of
3the Business and Professions Code.

begin delete

4(h) This section shall become operative on January 1, 2019.

end delete
begin delete

5(i)

end delete

6begin insert(h)end insert This section shall remain in effect only until January 1, 2021,
7and as of that date is repealed, unless a later enacted statute, that
8is enacted before January 1, 2021, deletes or extends that date.

9begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 1633.3 of the end insertbegin insertCivil Codeend insertbegin insert, as added by Section
103.5 of Chapter 638 of the Statutes of 2015, is amended to read:end insert

11

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
12and (c), this title applies to electronic records and electronic
13signatures relating to a transaction.

14(b) This title does not apply to transactions subject to the
15following laws:

16(1) A law governing the creation and execution of wills, codicils,
17or testamentary trusts.

18(2) Division 1 (commencing with Section 1101) of the Uniform
19Commercial Code, except Sections 1206 and 1306.

20(3) Divisions 3 (commencing with Section 3101), 4
21(commencing with Section 4101), 5 (commencing with Section
225101), 8 (commencing with Section 8101), 9 (commencing with
23Section 9101), and 11 (commencing with Section 11101) of the
24Uniform Commercial Code.

25(4) A law that requires that specifically identifiable text or
26disclosures in a record or a portion of a record be separately signed,
27including initialed, from the record. However, this paragraph does
28not apply to Section 1677 or 1678 of this code or Section 1298 of
29the Code of Civil Procedure.

30(c) This title does not apply to any specific transaction described
31in Section 17511.5 of the Business and Professions Code, Section
3256.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
33or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
34Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
351789.16, or 1793.23 of, Chapter 1 (commencing with Section
361801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
371917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
382924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
392945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
402954.5 or 2963 of, Chapter 2b (commencing with Section 2981)
P9    1or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of
2Division 3 of, Section 3071.5 of Part 5 (commencing with Section
34000) of Division 4 of, or Part 5.3 (commencing with Section
46500) of Division 4 of this code, subdivision (b) of Section 18608
5or Section 22328 of the Financial Code, Section 1358.15, 1365,
61368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code,
7Section 662, begin insertparagraph (2) of subdivision (a) of Section end insert663, 664,
8begin delete 667.5,end delete 673, 677,begin delete 678,end delete 678.1, 786, begin insertparagraph (2) of subdivision (a)
9of Section end insert
10086,begin delete 10113.7, 10127.7, 10127.9, 10127.10,end delete 10192.18,
1010199.44, 10199.46, 10235.16, 10235.40,begin delete 10509.4, 10509.7,end delete
11 11624.09, or 11624.1 of the Insurance Code, Section 779.1,
1210010.1, or 16482 of the Public Utilities Code, or Section 9975
13or 11738 of the Vehicle Code. An electronic record may not be
14substituted for any notice that is required to be sent pursuant to
15Section 1162 of the Code of Civil Procedure. Nothing in this
16subdivision shall be construed to prohibit the recordation of any
17document with a county recorder by electronic means.

18(d) This title applies to an electronic record or electronic
19signature otherwise excluded from the application of this title under
20subdivision (b) when used for a transaction subject to a law other
21than those specified in subdivision (b).

22(e) A transaction subject to this title is also subject to other
23applicable substantive law.

24(f) The exclusion of a transaction from the application of this
25title under subdivision (b) or (c) shall be construed only to exclude
26the transaction from the application of this title, but shall not be
27construed to prohibit the transaction from being conducted by
28electronic means if the transaction may be conducted by electronic
29means under any other applicable law.

30(g) Notwithstanding subdivisions (b) and (c), this title shall
31apply to electronic records and electronic signatures relating to
32transactions conducted by a person licensed, certified, or registered
33 pursuant to the Alarm Company Act (Chapter 11.6 (commencing
34with Section 7590) of Division 3 of the Business and Professions
35Code) for purposes of activities authorized by Section 7599.54 of
36the Business and Professions Code.

37(h) This section shall become operative on January 1, 2021.

38

begin deleteSEC. 3.end delete
39
begin insertSEC. 4.end insert  

Section 38.5 of the Insurance Code, as amended by
40Section 4 of Chapter 369 of the Statutes of 2013, is repealed.

P10   1

begin deleteSEC. 4.end delete
2
begin insertSEC. 5.end insert  

Section 38.5 of the Insurance Code, as added by
3Section 5 of Chapter 369 of the Statutes of 2013, is repealed.

4

begin deleteSEC. 5.end delete
5
begin insertSEC. 6.end insert  

Section 38.6 of the Insurance Code is amended to read:

6

38.6.  

(a) (1) Any written record required to be given or mailed
7to any person by a licensee, including an offer of renewal required
8by Sections 663 and 678, the notice of policy change or
9cancellation requested by the insured as required by Section 667.5,
10the notice of conditional renewal required by Section 678.1, the
11offer of coverage or renewal or any disclosure required by Section
1210086, the offer of renewal for a workers’ compensation policy,
13Section 662, paragraph (2) of subdivision (a) of Section 663,
14Section 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of
15Section 678, subdivisions (a) and (b) of Section 678.1, or any
16written record required to be given or mailed to any person by a
17licensee relating to the business of life insurance, as defined in
18Section 101 of this code may, if not excluded by subdivision (b)
19or (c) of Section 1633.3 of the Civil Code, be provided by
20electronic transmission pursuant to Title 2.5 (commencing with
21Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each
22party has agreed to conduct the transaction by electronic means
23pursuant to Section 1633.5 of the Civil Code, and if the licensee
24complies with the provisions of this section. A valid electronic
25signature shall be sufficient for any provision of law requiring a
26written signature.

27(2) For purposes of this section, the definitions set forth in
28Section 1633.2 of the Civil Code shall apply. The term “licensee”
29means an insurer, agent, broker, or any other person who is required
30to be licensed by the department.

31(3) Notwithstanding subdivision (l) of Section 1633.2 of the
32Civil Code, for purposes of this section, “person” includes, but is
33not limited to, the policy owner, policyholder, applicant, insured,
34or assignee or designee of an insured.

35(b) In order to transmit a record listed in subdivision (a)
36electronically, a licensee shall comply with all of the following:

37(1) A licensee, or licensee’s representative, acquires the consent
38of the person to opt in to receive the record by electronic
39transmission, and the person has not withdrawn that consent, prior
40to providing the record by electronic transmission. A person’s
P11   1consent may be acquired verbally, in writing, or electronically. If
2consent is acquired verbally, the licensee shall confirm consent in
3writing or electronically. The licensee shall retain a record of the
4person’s consent to receive the record by electronic transmission
5with the policy information so that it is retrievable upon request
6by the department while the policy is in force and for five years
7thereafter.

8(2) A licensee discloses, in writing or electronically, to the
9person all of the following:

10(A) The opt in to receive the record by electronic transmission
11is voluntary.

12(B) That the person may opt out of receiving the record by
13electronic transmission at any time, and the process or system for
14the person to opt out.

15(C) A description of the record that the person will receive by
16electronic transmission.

17(D) The process or system to report a change or correction in
18the person’s email address.

19(E) The licensee’s contact information, which includes, but is
20not limited to, a toll-free number or the licensee’s Internet Web
21site address.

22(3) The opt-in consent disclosure required by paragraph (2) may
23be set forth in the application or in a separate document that is part
24of the policy approved by the commissioner and shall be bolded
25or otherwise set forth in a conspicuous manner. The person’s
26signature shall be set forth immediately below the opt-in consent
27disclosure. If the licensee seeks consent at any time prior to the
28completion of the application, consent and signature shall be
29obtained before the application is completed. If the person has not
30opted in at the time the application is completed, the licensee may
31receive the opt-in consent at any time thereafter, pursuant to the
32same opt-in requirements that apply at the time of the application.
33The licensee shall retain a copy of the signed opt-in consent
34disclosure with the policy information so that each is retrievable
35upon request by the department while the policy is in force and
36for five years thereafter.

37(4) The email address of the person who has consented to
38electronic transmission shall be set forth on the consent disclosure.
39In addition, if the person who consented receives an annual
P12   1statement, the email address of the person who has consented shall
2be set forth on that record.

3(5) The licensee shall annually provide one free printed copy
4of any record described in this subdivision upon request by the
5person.

6(6) If a provision of this code requires a licensee to transmit a
7record by first-class mail, regular mail, does not specify a method
8of delivery, or is a record that is required to be provided pursuant
9to Article 6.6 (commencing with Section 791), and if the licensee
10is not otherwise prohibited from transmitting the record
11electronically under subdivision (b) of Section 1633.8 of the Civil
12Code, then the record may be transmitted by electronic transmission
13if the licensee complies with all of the requirements of Sections
141633.15 and 1633.16 of the Civil Code.

15(7) Notwithstanding subdivision (b) of Section 1633.8 of the
16Civil Code, if a provision of this code requires a licensee to
17 transmit a record by return receipt, registered mail, certified mail,
18signed written receipt of delivery, or other method of delivery
19evidencing actual receipt by the person, and if the licensee is not
20otherwise prohibited from transmitting the record electronically
21under Section 1633.3 of the Civil Code and the provisions of this
22section, then the licensee shall maintain a process or system that
23demonstrates proof of delivery and actual receipt of the record by
24the person consistent with this paragraph. The licensee shall
25document and retain information demonstrating delivery and actual
26receipt so that it is retrievable, upon request, by the department at
27least five years after the policy is no longer in force. The record
28provided by electronic transmission shall be treated as if actually
29received if the licensee delivers the record to the person in
30compliance with applicable statutory delivery deadlines. A licensee
31may demonstrate actual delivery and receipt by any of the
32following:

33(A) The person acknowledges receipt of the electronic
34transmission of the record by executing an electronic signature.

35(B) The record is posted on the licensee’s secure Internet Web
36site, and there is evidence demonstrating that the person logged
37onto the licensee’s secure Internet Web site and downloaded,
38printed, or otherwise acknowledged receipt of the record.

39(C) If a licensee is unable to demonstrate actual delivery and
40receipt pursuant to this paragraph, the licensee shall resend the
P13   1record by regular mail to the person in the manner originally
2specified by the underlying provision of this code.

3(8) Notwithstanding any other law, a notice of lapse,
4nonrenewal, cancellation, or termination of any product subject to
5this section may be transmitted electronically if the licensee
6demonstrates proof of delivery as set forth in paragraph (7) and
7complies with the other provisions in this section.

8(9) If the record is not delivered directly to the electronic address
9designated by the person but placed at an electronic address
10accessible to the person, a licensee shall notify the person in plain,
11clear, and conspicuous language at the electronic address
12designated by the person that describes the record, informs that
13person that it is available at another location, and provides
14instructions to the person as to how to obtain the record.

15(10) (A) Upon a licensee receiving information indicating that
16the record sent by electronic transmission was not received by the
17person, the licensee shall, within five business days, comply with
18either clause (i) or (ii):

19(i) Contact the person to confirm or update the person’s email
20address and resend the record by electronic transmission. If the
21licensee elects to resend the record by electronic transmission, the
22licensee shall demonstrate the transmission was received by the
23person, pursuant to paragraph (6), (7), or (8). If the licensee is
24unable to confirm or update the person’s email address, the licensee
25shall resend the record by regular mail to the licensee at the address
26shown on the policy, or, if the underlying statute requires delivery
27in a specified manner, send the record in that specified manner.

28(ii) Resend the record initially provided by electronic
29transmission by regular mail to the insured at the address shown
30on the policy, or, if the underlying statute requires delivery in a
31specified manner, send the record in that specified manner.

32(B) If the licensee sends the first electronic record within the
33time period required by law and the licensee complies with both
34paragraph (5) and subparagraph (A) of this paragraph, the record
35sent pursuant to clause (i) or (ii) of subparagraph (A) shall be
36treated as if mailed in compliance with the applicable statutory
37regular mail delivery deadlines.

38(11) The licensee shall not charge any person who declines to
39opt in to receive a record through electronic transmission from
40receiving a record electronically. The licensee shall not provide a
P14   1discount or an incentive to any person to opt in to receive electronic
2records.

3(12) The licensee shall verify a person’s email address via paper
4writing sent by regular mail when more than 12 months have
5elapsed since the licensee’s last electronic communication.

6(c) An insurance agent or broker acting under the direction of
7a party that enters into a contract by means of an electronic record
8or electronic signature shall not be held liable for any deficiency
9in the electronic procedures agreed to by the parties under that
10contract if all of the following are met:

11(1) The insurance agent or broker has not engaged in negligent,
12reckless, or intentional tortious conduct.

13(2) The insurance agent or broker was not involved in the
14development or establishment of the electronic procedures.

15(3) The insurance agent or broker did not deviate from the
16electronic procedures.

17(d) (1) On or before January 1, 2019, the commissioner shall
18submit a report to the Governor and to the committees of the Senate
19and Assembly having jurisdiction over insurance and the judiciary,
20regarding the impact and implementation of the authorization of
21the electronic transmission of certain insurance renewal offers,
22notices, or disclosures, relating to the business of life insurance,
23as authorized by this section. The report shall include input from
24insurers, consumers, and consumer organizations, and shall include
25an assessment of the department’s experience pertaining to the
26authorization of the electronic transmission of insurance renewals,
27relating to the business of life insurance, as authorized by this
28section.

29(2) On or before January 1, 2019, the commissioner shall submit
30a report to the Governor and to the committees of the Senate and
31Assembly having jurisdiction over insurance and the judiciary,
32regarding the impact and implementation of the authorization of
33the electronic transmission of certain insurance renewal offers,
34notices, or disclosures including an offer of renewal required by
35Sections 663 and 678, the notice of conditional renewal required
36by Section 678.1, the offer of coverage or renewal or any disclosure
37required by Section 10086, and the offer of renewal for a workers’
38compensation policy, as authorized by this section. The report
39shall include input from insurers, consumers, and consumer
40organizations, and shall include an assessment of the department’s
P15   1experience pertaining to the authorization of the electronic
2transmission of insurance renewals, including, an offer of renewal
3 required by Sections 663 and 678, the notice of conditional renewal
4required by Section 678.1, the offer of coverage or renewal or any
5disclosure required by Section 10086, and the offer of renewal for
6a workers’ compensation policy, as authorized by this section.

7(e) Notwithstanding paragraph (4) of subdivision (b) of Section
81633.3 of the Civil Code, for any policy of life insurance, as
9defined in Section 101, any statutory requirement for a separate
10acknowledgment, signature, or initial, which is not expressly
11prohibited by subdivision (c) of Section 1633.3 of the Civil Code,
12may be transacted using an electronic signature, or by electronic
13transaction, subject to all applicable provisions of this section.

14(f) The department may suspend a licensee from providing
15records by electronic transmission if there is a pattern or practices
16that demonstrate the licensee has failed to comply with the
17requirements of this section. A licensee may appeal the suspension
18and resume its electronic transmission of records upon
19communication from the department that the changes the licensee
20made to its process or system to comply with the requirements of
21this section are satisfactory.

22(g) This section shall remain in effect only until January 1, 2021,
23and as of that date is repealed, unless a later enacted statute, that
24is enacted before January 1, 2021, deletes or extends that date.

25

begin deleteSEC. 6.end delete
26
begin insertSEC. 7.end insert  

Section 38.6 is added to the Insurance Code, to read:

27

38.6.  

(a) (1) Any written record required to be given or mailed
28to any person by a licensee, including an offer of renewal required
29bybegin delete Sections 663 andend deletebegin insert paragraph (1) of subdivision (a) of Section
30663 and Sectionend insert
678, the notice of policy change or cancellation
31requested by the insured as required by Section 667.5,begin delete the notice
32of conditional renewal required by Section 678.1,end delete
the offer of
33coverage or renewal or any disclosure required bybegin delete Section end delete
34begin insert paragraph (1) of subdivision (a) of Section end insert 10086, the offer of
35renewal for a workers’ compensation policy, or any written record
36required to be given or mailed to any person by a licensee relating
37to the business of life insurance, as defined in Section 101 of this
38code may, if not excluded by subdivision (b) or (c) of Section
391633.3 of the Civil Code, be provided by electronic transmission
40pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2
P16   1of Division 3 of the Civil Code, if each party has agreed to conduct
2the transaction by electronic means pursuant to Section 1633.5 of
3the Civil Code, and if the licensee complies with the provisions
4of this section. A valid electronic signature shall be sufficient for
5any provision of law requiring a written signature.

6(2) For purposes of this section, the definitions set forth in
7Section 1633.2 of the Civil Code shall apply. The term “licensee”
8means an insurer, agent, broker, or any other person who is required
9to be licensed by the department.

10(3) Notwithstanding subdivision (l) of Section 1633.2 of the
11Civil Code, for purposes of this section, “person” includes, but is
12not limited to, the policy owner, policyholder, applicant, insured,
13or assignee or designee of an insured.

14(b) In order to transmit a record listed in subdivision (a)
15electronically, a licensee shall comply with all of the following:

16(1) A licensee, or licensee’s representative, acquires the consent
17of the person to opt in to receive the record by electronic
18transmission, and the person has not withdrawn that consent, prior
19to providing the record by electronic transmission. A person’s
20consent may be acquired verbally, in writing, or electronically. If
21consent is acquired verbally, the licensee shall confirm consent in
22writing or electronically. The licensee shall retain a record of the
23person’s consent to receive the record by electronic transmission
24with the policy information so that it is retrievable upon request
25by the department while the policy is in force and for five years
26thereafter.

27(2) A licensee discloses, in writing or electronically, to the
28person all of the following:

29(A) The opt in to receive the record by electronic transmission
30is voluntary.

31(B) That the person may opt out of receiving the record by
32electronic transmission at any time, and the process or system for
33the person to opt out.

34(C) A description of the record that the person will receive by
35electronic transmission.

36(D) The process or system to report a change or correction in
37the person’s email address.

38(E) The licensee’s contact information, which includes, but is
39not limited to, a toll-free number or the licensee’s Internet Web
40site address.

P17   1(3) The opt-in consent disclosure required by paragraph (2) may
2be set forth in the application or in a separate document that is part
3of the policy approved by the commissioner and shall be bolded
4or otherwise set forth in a conspicuous manner. The person’s
5signature shall be set forth immediately below the opt-in consent
6disclosure. If the licensee seeks consent at any time prior to the
7completion of the application, consent and signature shall be
8obtained before the application is completed. If the person has not
9opted in at the time the application is completed, the licensee may
10receive the opt-in consent at any time thereafter, pursuant to the
11same opt-in requirements that apply at the time of the application.
12The licensee shall retain a copy of the signed opt-in consent
13disclosure with the policy information so that each is retrievable
14upon request by the department while the policy is in force and
15for five years thereafter.

16(4) The email address of the person who has consented to
17electronic transmission shall be set forth on the consent disclosure.
18In addition, if the person who consented receives an annual
19statement, the email address of the person who has consented shall
20be set forth on that record.

21(5) The licensee shall annually provide one free printed copy
22of any record described in this subdivision upon request by the
23person.

24(6) If a provision of this code requires a licensee to transmit a
25record by first-class mail, regular mail, does not specify a method
26of delivery, or is a record that is required to be provided pursuant
27to Article 6.6 (commencing with Section 791), and if the licensee
28is not otherwise prohibited from transmitting the record
29electronically under subdivision (b) of Section 1633.8 of the Civil
30Code, then the record may be transmitted by electronic transmission
31if the licensee complies with all of the requirements of Sections
321633.15 and 1633.16 of the Civil Code.

33(7) If the record is not delivered directly to the electronic address
34designated by the person but placed at an electronic address
35accessible to the person, a licensee shall notify the person in plain,
36clear, and conspicuous language at the electronic address
37designated by the person that describes the record, informs that
38person that it is available at another location, and provides
39instructions to the person as to how to obtain the record.

P18   1(8) (A) Upon a licensee receiving information indicating that
2the record sent by electronic transmission was not received by the
3person, the licensee shall, within five business days, comply with
4either clause (i) or (ii):

5(i) Contact the person to confirm or update the person’s email
6address and resend the record by electronic transmission. If the
7licensee elects to resend the record by electronic transmission, the
8licensee shall demonstrate the transmission was received by the
9person, pursuant to paragraph (6). If the licensee is unable to
10confirm or update the person’s email address, the licensee shall
11resend the record by regular mail to the licensee at the address
12shown on the policy, or, if the underlying statute requires delivery
13in a specified manner, send the record in that specified manner.

14(ii) Resend the record initially provided by electronic
15transmission by regular mail to the insured at the address shown
16on the policy, or, if the underlying statute requires delivery in a
17specified manner, send the record in that specified manner.

18(B) If the licensee sends the first electronic record within the
19time period required by law and the licensee complies with both
20paragraph (5) and subparagraph (A) of this paragraph, the record
21sent pursuant to clause (i) or (ii) of subparagraph (A) shall be
22treated as if mailed in compliance with the applicable statutory
23regular mail delivery deadlines.

24(9) The licensee shall not charge any person who declines to
25opt in to receive a record through electronic transmission from
26receiving a record electronically. The licensee shall not provide a
27discount or an incentive to any person to opt in to receive electronic
28records.

29(10) The licensee shall verify a person’s email address via paper
30writing sent by regular mail when more than 12 months have
31elapsed since the licensee’s last electronic communication.

32(c) An insurance agent or broker acting under the direction of
33a party that enters into a contract by means of an electronic record
34or electronic signature shall not be held liable for any deficiency
35 in the electronic procedures agreed to by the parties under that
36contract if all of the following are met:

37(1) The insurance agent or broker has not engaged in negligent,
38reckless, or intentional tortious conduct.

39(2) The insurance agent or broker was not involved in the
40development or establishment of the electronic procedures.

P19   1(3) The insurance agent or broker did not deviate from the
2electronic procedures.

3(d) Notwithstanding paragraph (4) of subdivision (b) of Section
41633.3 of the Civil Code, for any policy of life insurance, as
5defined in Section 101, any statutory requirement for a separate
6acknowledgment, signature, or initial, which is not expressly
7prohibited by subdivision (c) of Section 1633.3 of the Civil Code,
8may be transacted using an electronic signature, or by electronic
9transaction, subject to all applicable provisions of this section.

10(e) The department may suspend a licensee from providing
11records by electronic transmission if there is a pattern or practices
12that demonstrate the licensee has failed to comply with the
13requirements of this section. A licensee may appeal the suspension
14and resume its electronic transmission of records upon
15communication from the department that the changes the licensee
16made to its process or system to comply with the requirements of
17this section are satisfactory.

18(f) This section shall become operative on January 1, 2021.



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