BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2578
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2578 (Dababneh)
          As Amended  June 19, 2014
          Majority vote
           
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          |ASSEMBLY:  |78-0 |(May 15, 2014)  |SENATE: |35-0 |(July 3, 2014) |
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           Original Committee Reference:    INS.  

           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.

           The Senate amendments  make minor technical and clarifying  
          changes to this bill.

           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  :  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel.

           COMMENTS  :   

          1)Purpose.  According to the author, this bill 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 (Ron Calderon),  
            Chapter 345, Statutes of 2013, became law last year, there  
            were a few areas of the existing statute that were  








                                                                  AB 2578
                                                                  Page  2

            inadvertently changed.  This bill simply seeks to clarify  
            contractual language that was previously allowed under  
            California law.  
          2)Previous Legislation.  SB 1449 (Ron Calderon), Chapter 567,  
            Statutes of 2012, added supplemental benefit options to life  
            insurance policies.  SB 281 added accelerated death benefits  
            options to life insurance policies.

           
          Analysis Prepared by  :    Paul Riches / INS. / (916) 319-2086 


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