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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          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









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