New year - new insurance laws
News: 2015 Press Release
SACRAMENTO, Calif. - The new year will ring in with four bills sponsored by the California Department of Insurance taking effect January 1, 2016 and three other bills becoming active later in the year.
"In this new year consumers will benefit from new insurance laws crafted to offer more protections," said Insurance Commissioner Dave Jones. "The seven bills signed by Governor Brown will go a long way toward keeping the insurance market healthy and increasing safeguards for consumers, seniors and hard-working families."
SB 426, authored by Senator Connie Leyva (D-Chino) -Senior Annuity Benefit Protection
Senate Bill 426 prohibits surrender charges on the death benefits of certain annuity practices. The new law protects seniors and their beneficiaries from financial losses incurred when insurers apply surrender penalties to annuities paid as a death benefit. This law goes into effect January 1, 2016.
AB 1131, authored by Assembly Member Matthew Dababneh (D-Encino) -Electronic Transactions
Under this new law, life insurers are able to transact more business electronically if specified consumer protections are met, allowing consumers choices as to how they manage their insurance. Assembly Bill 1131 is an important step in keeping up with the increasing use of technology for consumers who seek to opt in to e-commerce for insurance transactions.
AB 387, authored by Assembly Member Kevin McCarty (D-Sacramento) -Policy Review Timing
The new law will authorize the Insurance Commissioner to develop and publish new guidelines for insurers on the department's website for the purpose of streamlining and expediting the department's file review process for life and disability insurance forms. The law additionally clarifies and extends the period of time allowed for the department to review and approve policy forms and any associated risks and premium rates from 30 to 120 calendar days.
AB 1515, authored by the Assembly Committee on Insurance -Omnibus provisions
This omnibus bill clarifies and improves various sections of the Insurance Code, the body of law that provides for consumer protections and regulation of insurance companies. Specifically it includes provisions that restore the requirement that interest be applied to claim payments under non-health disability policies when the payment is made more than 30 days after receipt of the claim. It also restores the requirement that interest be applied to claim payments under non-health disability policies when the payment is made more than 30 days after receipt of the claim. Most of the provisions in this bill take effect January 1, 2016.
SB 575, authored by Senator Carol Liu (D-La Cañada, Flintridge) -Senior Annuity Benefit Protection
Senate Bill 575 protects consumers, specifically the elderly and their caregivers by requiring long-term care insurers to provide annual notification of the availability of non-forfeiture benefits and contingent benefits to the insured and the insured's designated backup contact. This law will go into effect on July 1, 2016.
SB 696, authored by Senator Richard Roth (D- Riverside) -Principle Based Reserving
This law permits life insurers to use the Principle-Based Reserve (PBR) method of calculating reserves required to pay future claims for certain insurance products sold to individuals. Under this reserving method, reserves are more appropriately aligned with the risks actually assumed by an insurer, and in effect, insurance premiums are based on more refined risk analyses. National implementation of PBR requires the approval of 42 of the 55 jurisdictions within the National Association of Insurance Commissioners, representing 75 percent of relevant premium volume.
AB 553, authored by Assembly Member Tom Daly (D-Anaheim) -Enhanced corporate governance policies
Assembly Bill 553 took effect August 17, 2015, as an urgency measure. This bill enhanced corporate governance policies for insurers and established new oversight tools to reduce the number of insolvencies of insurance companies.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.