BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1184
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   SB 1184 (Corbett) - As Amended:  April 17, 2012 

          Policy Committee:                              InsuranceVote:13 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill provides that neither an insurance agent, nor an 
          employee of the agent, may participate in, or be associated 
          with, the obtaining of veteran's benefits for a veteran, unless 
          the agent has established and maintains procedural safeguards to 
          ensure that the agent has no direct financial incentive to refer 
          the policyholder or applicant to any governmental veteran's 
          benefit program.

           FISCAL EFFECT  

          Costs associated with this legislation would be minor and 
          absorbable within existing resources. 

           COMMENTS  

           1)Rationale  . According to the author, veterans need protection 
            from bad acting insurance agents who mislead seniors about the 
            Veterans Aid and Attendance benefits program. Current federal 
            law prohibits any individual from charging a fee for helping a 
            veteran file an initial application for benefits with the U.S. 
            Department of Veterans Affairs. According to California 
            Advocates for Nursing Home Reform (CANHR), some aggressive 
            marketers selling insurance products target senior veterans 
            and charge fees to educate veterans or help them prepare 
            claims.

            In particular, CANHR points to the Veterans Aid and Attendance 
            program designed to provide low-wealth veterans with financial 
            support to pay for care and allow the veteran to remain 
            independent.  Eligibility is based, in part, on the 








                                                                  SB 1184
                                                                  Page  2

            applicant's income and net worth.  An agent may advise a 
            senior to hide assets in an annuity or trust in order to 
            qualify for these benefits with intent to sell that product.

           2)Related Legislation  . SB 1170 (Leno), also before pending 
            before this committee, proposes a number of specific rules to 
            govern the same behavior that this bill seeks to govern.  The 
            provisions of the two bills are compatible.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081