Amended in Assembly April 28, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 565


Introduced by Assembly Member Cooley

February 24, 2015


An act tobegin delete add and repeal Section 10191.5end deletebegin insert amend Section 10270.6end insert of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 565, as amended, Cooley. begin deleteInterstate Insurance Product Regulation Compact: independent study. end deletebegin insertGroup disability insurance: required provisions.end insert

begin insert

Existing law provides for the regulation of specified insurance products, including group disability insurance, by the Insurance Commissioner. Existing law requires a group disability master insurance policy to include a provision that the insurer will issue to the policyholder for delivery to an individual insured under the policy an individual certificate that sets forth a statement as to the insurance protection to which he or she is entitled and to whom it is payable.

end insert
begin insert

This bill would provide that instead the insurer may include in the master insurance policy a provision that the insurer will issue the certificate directly to the insured individual. This bill would make other technical, nonsubstantive changes.

end insert
begin delete

Existing law provides for the regulation of insurers and specified insurance products, including life insurance, disability insurance, and long-term care insurance, by the Insurance Commissioner. Existing law directs the Insurance Commissioner to enforce the execution of laws regulating the business of insurance.

end delete
begin delete

This bill would require the commissioner to commission an independent study to examine the extent to which the uniform standards set forth in the Interstate Insurance Product Regulation Compact provide consumer protections that are equivalent to those established under state law for annuity, life insurance, disability income, and long-term care insurance products, and would prohibit the use of General Fund or Insurance Fund moneys for this purpose. The bill would require the commissioner to submit the report to the chairpersons of the Assembly and Senate Committees on Insurance no later than January 1, 2017.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteyes end deletebegin insertnoend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 10270.6 of the end insertbegin insertInsurance Codeend insertbegin insert is amended
2to read:end insert

3

10270.6.  

Every group disability master policy shall contain
4the following provisions:

5(a) A provision that the policy, the application of the
6begin delete policyholderend deletebegin insert policyholder,end insert and the individual applications, if any,
7of the individuals insured shall constitute the entire contract
8between the parties, and that all statements made by the
9policyholder, or by the individuals insured shall, in the absence of
10fraud, be deemed representations and not warranties, and that no
11such statement shall be used in defense to a claim under the policy,
12unless it is contained in a writtenbegin delete application;end deletebegin insert application.end insert

13(b) A provision that the insurer will issue to the policyholder
14for delivery to the individuals insured underbegin delete suchend deletebegin insert thatend insert policy,begin insert or
15a provision that the insurer will issue directly to the insured,end insert
an
16individual certificate setting forth a statement as to the insurance
17protection to which hebegin insert or sheend insert is entitled and to whombegin delete payable;end delete
18begin insert payable.end insert

19(c) A provision that to the group or class thereof originally
20insured shall be added from time to time all new employees,
21members or pupils of the policyholder eligible to and applying for
22insurance inbegin delete suchend deletebegin insert thatend insert group orbegin delete class;end deletebegin insert class.end insert

P3    1(d) A statement thatbegin delete suchend deletebegin insert theend insert policy is not in lieu of and does
2not affect any requirement for coverage by workmen’s
3compensation insurance.

begin delete
4

SECTION 1.  

Section 10191.5 is added to the Insurance Code,
5to read:

6

10191.5.  

(a) (1) The commissioner shall commission an
7independent study to examine the extent to which the uniform
8standards set forth in the Interstate Insurance Product Regulation
9Compact developed by the Interstate Insurance Product Regulation
10Commission provide consumer protections that are equivalent to
11those established under state law for annuity, life insurance,
12disability income, and long-term care insurance products.

13(2) The report shall, to the extent feasible, also highlight the
14substantive differences between the uniform standards set forth in
15the Interstate Insurance Product Regulation Compact and the
16statutory requirements under state law for annuity, life insurance,
17disability income, and long-term care insurance products.

18(b) (1) The commissioner shall submit the report to the
19chairpersons of the Assembly and Senate Committees on Insurance
20no later than January 1, 2017. The report shall be made in
21compliance with Section 9795 of the Government Code.

22(2) The commissioner shall have the right to review and approve
23the final report prior to its submission to the Legislature.

24(c) This section shall be implemented only to the extent that
25solicited nonpublic funds are received and made available for the
26commission of the independent study. No General Fund or
27Insurance Fund moneys shall be used to implement this section.

28(d) This section shall remain in effect only until January 1, 2021,
29and as of that date is repealed, unless a later enacted statute, that
30is enacted before January 1, 2021, deletes or extends that date.

end delete


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