BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2578
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                           ASSEMBLY COMMITTEE ON INSURANCE
                                Henry T. Perea, Chair
                   AB 2578 (Dababneh) - As Amended:  April 7, 2014
           
          SUBJECT  :   Life Insurance

           SUMMARY  :   Makes technical changes to the law governing  
          accelerated death benefits.  Specifically,  this bill  :  

          1)Permits life insurers to exclude losses substantially  
            contributed to by engaging in aviation, other than as a fare  
            paying passenger.

          2)Clarifies when an insurer must provide a policyholder with a  
            statement of accelerated death benefits paid.

           EXISTING LAW  :

          1)Provides for "supplemental benefits" to be added to life  
            insurance policies that waive the payment of premium when a  
            policyholder becomes totally disabled.

          2)Provides for an accelerated death benefit that allows for  
            early payment of the death benefit if the insured has a  
            terminal illness or a disabling condition.

           FISCAL EFFECT  :   Undetermined

           COMMENTS :   

           1)Purpose  .  According to the author, AB 2578 makes minor  
            technical changes to the statutes governing accelerated access  
            to life insurance benefits for individuals with chronic or  
            catastrophic health conditions. When SB 281 became law last  
            year, there were a few areas of the existing statute that were  
            inadvertently changed.  This bill simply seeks to clarify  
            contractual language that was previously allowed under  
            California law.  
          2)Previous Legislation  .  SB 1449 (Statutes of 2012, Chapter 567)  
            added supplemental benefit options to life insurance policies.  
             SB 281(Statutes of 2013, Chapter 345) added accelerated death  
            benefits options to life insurance policies.









                                                                  AB 2578
                                                                  Page  2

           REGISTERED SUPPORT / OPPOSITION :   

           Support 
           
          ACHLIC (sponsor)

           



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