BILL NUMBER: AB 2710	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Cooley

                        FEBRUARY 19, 2016

   An act to amend Section 38.5 of the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2710, as introduced, Cooley. Insurance: notice: electronic
transmission.
   Existing law authorizes any written notice required to be given or
mailed to any person by an insurer relating to any insurance on
risks or on operations in this state, with exceptions, to be provided
by electronic transmission, pursuant to certain provisions, if each
party has agreed to conduct the transaction by electronic means, as
provided.
   This bill would make nonsubstantive, technical changes to those
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 38.5 of the Insurance Code, as amended by
Section 4 of Chapter 369 of the Statutes of 2013, is amended to read:

   38.5.  (a)  Any  A  written notice
required to be given or mailed to  any   a 
person by an insurer relating to any insurance on risks or on
operations in this state not excepted by subdivision (a), (b), (c),
(d), (e), or (g) of Section 1851 from the coverage of Chapter 9
(commencing with Section 1850.4) of Part 2 of Division 1 of this code
may, if not excluded by subdivision (b) or (c) of Section 1633.3 of
the Civil Code, be provided by electronic transmission pursuant to
Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of
the Civil Code, if each party has agreed to conduct the transaction
by electronic means pursuant to Section 1633.5 of the Civil Code. The
affidavit of the person who initiated the electronic transmission,
stating the facts of that transmission into an information processing
system outside of the control of the sender or of  any
  a  person that sent the electronic record on
behalf of the sender, is prima facie evidence that the notice was
transmitted and shall be sufficient proof of notice.  Any
  A  notice provided by electronic transmission
shall be treated as if mailed or given for the purposes of any
provision of this code, except as provided by subdivision (g) of
Section 1633.15 of the Civil Code. The insurance company shall
maintain a system for confirming that  any   a
 notice or document that is to be provided by electronic means
has been sent in a manner consistent with Section 1633.15 of the
Civil Code. A valid electronic signature shall be sufficient for any
provision of law requiring a written signature. The insurance company
shall retain a copy of the confirmation and electronic signature,
when either is required, with the policy information so that they are
retrievable upon request by the Department of Insurance while the
policy is in force and for five years thereafter.
   (b) The offer of renewal required by Sections 663 and 678, the
notice of conditional renewal required by Section 678.1, and the
offer of coverage or renewal or any disclosure required by Section
10086 and the offer of renewal for a workers' compensation policy may
be provided by electronic transmission if an insurer complies with
all of the following:
   (1) An insurer, or insurer's representative, acquires the consent
of the insured to opt in to receive the offer, notice, or disclosure
by electronic transmission, and the insured has not withdrawn that
consent, prior to providing the offer, notice, or disclosure by
electronic transmission. An insured's consent may be acquired
verbally, in writing, or electronically. If consent is acquired
verbally, the insurer shall confirm consent in writing or
electronically. The insurer shall retain a record of the insured's
consent to receive the offer, notice, or disclosure by electronic
transmission with the policy information so that it is retrievable
upon request by the Department of Insurance while the policy is in
force and for five years thereafter.
   (2) An insurer discloses, in writing or electronically, to the
insured all of the following:
   (A) The opt in to receive the offer, notice, or disclosure by
electronic transmission is voluntary.
   (B) That the insured may opt out of receiving the offer, notice,
or disclosure by electronic transmission at any time, and the process
or system for the insured to opt out.
   (C)  A description of the offer, notice, or disclosure that the
insured will receive by electronic transmission.
   (D) The process or system to report a change or correction in the
insured's email address.
   (E) The insurer's contact information, which includes, but is not
limited to, a toll-free number or an insurer's Internet Web site
address.
   (3) An insurer shall include the insured's email address on the
policy declaration page.
   (4)  An insurer shall annually provide one free printed copy of
any offer, notice, or disclosure described in this subdivision upon
request by the insured.
   (5) An insurer shall maintain a process or system that can
demonstrate that the offer, notice, or disclosure provided by
electronic transmission was both sent and received consistent with
Section 1633.15 of the Civil Code. If a different method of sending
or receiving is agreed upon by the insurer and the insured pursuant
to Section 1633.15 of the Civil Code, an insurer shall comply with
the provisions of this subdivision. The insurer shall retain and
document information so that the documentation and information is
retrievable upon request by the Department of Insurance while the
current policy is in force and for five years thereafter related to
its process or system demonstrating that the offer, notice, or
disclosure provided by electronic transmission was sent to the
insured by the applicable statutory regular mail delivery deadlines
and received electronically. The offer, notice, or disclosure
provided by electronic transmission shall be treated as if mailed so
long as the insurer delivers it to the insured in compliance with the
applicable statutory regular mail delivery deadlines.
   (A) Acceptable methods for an insurer to demonstrate that the
offer, notice, or disclosure was sent to the insured include simple
mail transfer protocol server log files indicating transmission, or
other methodologies indicating sent transmission consistent with
standards set forth in Section 1633.15 of the Civil Code.
   (B) Acceptable methods for an insurer to demonstrate that the
offer, notice, or disclosure was received by the insured include
server log files indicating that the email or application has been
received, or log files showing that the insured logged into his or
her secured account with the insurer, or other methodologies
indicating received transmission consistent with standards set forth
in Section 1633.15 of the Civil Code.
   (6) If the offer, notice, or disclosure is not delivered directly
to the electronic address designated by the insured, but placed at an
electronic address accessible to the insured, an insurer shall
notify the insured in plain, clear, and conspicuous language at the
electronic address designated by the insured that describes the
offer, notice, or disclosure, informs that insured that it is
available at another location, and provides instructions to the
insured as to how to obtain the offer, notice, or disclosure.
   (7) (A) Upon an insurer receiving information indicating that the
offer, notice, or disclosure sent by electronic transmission was not
received by the insured, the insurer shall, within two business days,
either clause (i) or (ii):
   (i) Contact the insured to confirm or update the insured's email
address and resend the offer, notice, or disclosure by electronic
transmission. If the insurer elects to resend the offer, notice, or
disclosure by electronic transmission, the insurer shall demonstrate
the transmission was received by the insured, pursuant to paragraph
(5). If the insurer is unable to confirm or update the insured's
email address, the insurer shall resend the offer, notice, or
disclosure by regular mail to the insured at the address shown on the
policy.
   (ii) Resend the offer, notice, or disclosure initially provided by
electronic transmission by regular mail to the insured at the
address shown on the policy.
   (B) If the insurer sends the first electronic offer, notice, or
disclosure within the time period required by law and the insurer
complies with both paragraph (5) and subparagraph (A) of this
paragraph, the electronic offer, notice, or disclosure sent pursuant
to clause (i) or (ii) of subparagraph (A) shall be treated as if
mailed in compliance with the applicable statutory regular mail
delivery deadlines.
   (8) On or before January 1, 2018, the commissioner shall submit a
report to the Governor and to the committees of the Senate and
Assembly having jurisdiction over insurance and the judiciary,
regarding the impact and implementation of the authorization of the
electronic transmission of certain insurance renewal offers, notices,
or disclosures as authorized by this section. The report shall
include input from insurers, consumers, and consumer organizations,
and shall include an assessment of the department's experience
pertaining to the authorization of the electronic transmission of
insurance renewals as authorized by this section.
   (c) The department may suspend an insurer from providing offers,
notices, or disclosures by electronic transmission if there is a
pattern or practices that demonstrate the insurer has failed to
comply with the requirements of this section. An insurer may appeal
the suspension and resume its electronic transmission of offers,
notices, or disclosures upon communication from the department that
the changes the insurer made to its process or system to comply with
the requirements of this section are satisfactory.
   (d) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 2.  Section 38.5 of the Insurance Code, as added by Section 5
of Chapter 369 of the Statutes of 2013, is amended to read:
   38.5.  (a)  Any   A  written notice
required to be given or mailed to  any   a 
person by an insurer relating to any insurance on risks or on
operations in this state not excepted by Section 1851 from the
coverage of Chapter 9 (commencing with Section 1850.4) of Part 2 of
Division 1 of this code may, if not excluded by subdivision (b) or
(c) of Section 1633.3 of the Civil Code, be provided by electronic
transmission pursuant to Title 2.5 (commencing with Section 1633.1)
of Part 2 of Division 3 of the Civil Code, if each party has agreed
to conduct the transaction by electronic means pursuant to Section
1633.5 of the Civil Code. The affidavit of the person who initiated
the electronic transmission, stating the facts of that transmission
into an information processing system outside of the control of the
sender or of  any   a  person that sent the
electronic record on behalf of the sender, is prima facie evidence
that the notice was transmitted and shall be sufficient proof of
notice.  Any   A  notice provided by
electronic transmission shall be treated as if mailed or given for
the purposes of any provision of this code, except as provided by
subdivision (g) of Section 1633.15 of the Civil Code. The insurance
company shall maintain a system for confirming that  any
  a  notice or document that is to be provided by
electronic means has been sent in a manner consistent with Section
1633.15 of the Civil Code. A valid electronic signature shall be
sufficient for any provision of law requiring a written signature.
The insurance company shall retain a copy of the confirmation and
electronic signature, when either is required, with the policy
information so that they are retrievable upon request by the
Department of Insurance while the policy is in force and for five
years thereafter.
   (b) This section shall become operative on January 1, 2019.