Senate Bill No. 989

Introduced by Senator Fuller

February 10, 2016

An act to amend Section 779.2 of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 989, as introduced, Fuller. Insurance: life and disability.

Under existing law, the Insurance Commissioner, who controls the Department of Insurance, regulates insurers and specified classes of insurance, including life insurance and disability insurance.

This bill would make technical, nonsubstantive 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 779.2 of the Insurance Code is amended
to read:

779.2.  

begin delete All life end delete begin insert (a) end insert begin insert   end insert begin insert Life end insert begin insert end insert insurance begin delete and all end delete begin insert or end insert disability insurance
sold in connection with begin delete loans end delete begin insert a loan end insert or other credit begin delete transactions
shall be end delete begin insert transaction is end insert subject to begin delete the provisions of end delete this article,
except begin delete (a) such insurance end delete begin insert under either of the following
circumstances: end insert

begin insert (1) end insert begin insert   end insert begin insert Insurance end insert sold in connection with a loan or other credit
transaction begin insert having a term end insert of more than 10 begin delete years duration, and (b)
such insurance where its issuance is an end delete begin insert years. end insert

begin insert end insert

begin insert (2) end insert begin insert   end insert begin insert Insurance sold in an end insert isolated transaction begin delete on the part of end delete begin insert by end insert
the insurer begin insert that is end insert not related to an agreement or a plan or regular
course of conduct for insuring debtors of the creditor. begin delete Nothing in
this article end delete

begin insert (b) end insert begin insert   end insert begin insert This article end insert shall begin insert not end insert be construed to relieve any person from
compliance with any other applicable begin delete law of this state, end delete begin insert law, end insert
including, but not limited to, Article 6.5 (commencing with Section
790), begin delete nor shall anything in this article be construed so as end delete begin insert or end insert to
alter, amend, or otherwise affect existing case law.

begin delete

For the purpose of

end delete

begin insert (c) end insert begin insert   end insert begin insert For purposes of end insert this article:

(1) “Credit life insurance” means insurance on the life of a
debtor pursuant to or in connection with a specific loan or other
credit transaction, exclusive of any begin delete such end delete insurance procured at no
expense to the debtor. Insurance shall be deemed procured at no
expense to the debtor unless the cost of the credit transaction to
the debtor varies depending on whether begin delete or not end delete the insurance is
procured.

(2) “Credit disability insurance” means insurance on a debtor
to provide indemnity for payments becoming due on a specific
loan or other credit transaction while the debtor is begin delete disabled end delete
begin insert disabled, end insert as defined in the policy, exclusive of any insurance
procured at no expense to the debtor. Insurance shall be deemed
to have been procured at no expense to the debtor unless the cost
of the credit transaction to the debtor varies depending on whether
begin delete or not end delete the insurance is procured.

(3) “Creditor” means the lender of money or vendor or lessor
of goods, services, property, rights or privileges, for which payment
is arranged through a credit transaction or any successor to the
right, title or interest of begin delete any such end delete begin insert the end insert lender, vendor or lessor, and
an affiliate, associate or subsidiary of any of them or any director,
begin delete officer end delete begin insert officer, end insert or employee of any of begin delete them end delete begin insert them, end insert or any other
person in any way associated with any of them.

(4) “Debtor” means a borrower of money or a purchaser or
lessee of goods, services, property, rights or privileges for which
payment is arranged through a credit transaction.

(5) “Indebtedness” means the total amount payable by a debtor
to a creditor in connection with a loan or other credit transaction.