BILL ANALYSIS �
AB 2347
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2347 (Gonzalez)
As Amended June 19, 2014
Majority vote
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|ASSEMBLY: |78-0 |(May 15, 2014) |SENATE: |36-0 |(June 30, |
| | | | | |2014) |
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Original Committee Reference: INS.
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 : Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
AB 2347
Page 2
COMMENTS :
1)Purpose. According to the author, this bill will require that
mandated disclosures for immediate annuities are provided on
the cover page of the annuity policy. This bill 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.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086 FN:
0004056