BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2347
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                           ASSEMBLY COMMITTEE ON INSURANCE
                                Henry T. Perea, Chair
                   AB 2347 (Gonzalez) - As Amended:  April 30, 2014
           
          SUBJECT  :   Life Insurance and Annuity Disclosures

           SUMMARY  :   Requires certain notices for life insurance and  
          annuities to be on the cover page of the policy.  Specifically,  
           this bill  :  

          1)Clarifies that existing rules providing senior citizens a 30  
            day "free look" period after purchasing a life insurance  
            policy or annuity contract applies to both individual and  
            group products.

          2)Requires mandated notices relating to the "free look" period  
            be in 12 point bold print on the cover of the life insurance  
            policy or annuity contract.

          3)Applies existing notices regarding "free look" periods to the  
            sale of immediate annuity products.

          4)Makes numerous technical and clarifying changes relating to  
            life insurance policies and annuity contracts.

           EXISTING LAW  :

          1)Provide adults who are 65 or older a 30 day "free look" period  
            when they purchase certain insurance products (including  
            annuities).  During the "free look" period the purchaser can  
            return the policy and receive a full refund of any premium  
            paid without penalty.  

          2)Requires insurance policies sold to adults who are 65 or older  
            to include a notice describing the "free look" provisions of  
            the policy.

           FISCAL EFFECT  :   Undetermined

           COMMENTS  :   

           1)Purpose  .  According to the author, AB 2347 will require that  
            mandated disclosures for immediate annuities are provided on  








                                                                  AB 2347
                                                                  Page  2

            the cover page of the annuity policy.  AB 2347 also requires  
            the policies to correctly refer to modified guaranteed  
            contracts as fixed annuities rather than variable, allows the  
            insurer to tailor the format of these policies based on the  
            applicable product type that was purchased, and making other  
            technical changes. These changes would not only simplify and  
            clarify the disclosure for customers, but would also provide  
            clarification to insurers about their disclosure obligations.   


           



          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Department of Insurance (sponsor)
          California Advocates for Nursing Home Reform
          Congress of California Seniors

           Opposition 
           
          None received
           
          Analysis Prepared by  :    Paul Riches / INS. / (916) 319-2086