BILL ANALYSIS Ó
SB 924
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 924
(Roth) - As Amended March 28, 2016
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|Policy |Insurance |Vote:|13 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill expands the definition of "suitability information"
(required information a seller of annuities must seek from a
potential purchaser) to include the applicant's intention to
apply for means-tested government benefits.
FISCAL EFFECT:
Negligible state fiscal effect.
SB 924
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COMMENTS:
1)Purpose. The author indicates unscrupulous brokers have
targeted wealthy elderly residents of nursing homes to
reposition their assets in order to apply for government
benefits, most commonly through those available through
Medi-Cal or Department of Veterans' Affairs. This bill is
intended to discourage the practice. This bill is sponsored by
California Advocates for Nursing Home Reform (CANHR) and
supported by California Department of Insurance, Consumer
Attorneys of California, and some aging advocacy groups. It
has no opposition.
2)Background. Legislation enacted in 2011 (AB 689 (Blumenfield),
Chapter 295, Statutes of 2011) required insurers to establish
a system to supervise the suitability of annuity sale
recommendations, to ensure the needs and financial objectives
of consumers at the time of the transaction are appropriately
addressed. That bill established a list of specified
information the consumer must provide to determine
suitability, including: age, annual income, financial
situation and needs, intended use of the annuity, risk
tolerance, net worth and tax status. This bill would add
whether the consumer intends to apply for government benefits
to the above list.
3)Annuities. Annuities are financial products designed to
convert premium paid by the purchaser (in either a lump sum or
periodic payments) into a stream of payments to the purchaser.
They are designed to provide a stable cash flow for the
purchaser, most commonly for retirees, and alleviate the risk
of outliving one's assets.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081
SB 924
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