Source: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB1255
Timestamp: 2020-08-05 19:31:20
Document Index: 788061971

Matched Legal Cases: ['art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 1', 'art 1']

Bill Text - SB-1255 Insurance.
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SB-1255 Insurance.(2019-2020)
SB1255:v97#DOCUMENT
Introduced by Committee on Insurance (Senators Rubio (Chair), Archuleta, Bates, Borgeas, Dodd, Galgiani, Glazer, Hueso, Jones, Mitchell, Moorlach, Portantino, and Roth)
An act to amend Sections 1592, 32, 769.56, 1104.9, 1592, 1622, 1626, 1637, 1639, 1668, 1668.5, 1669, 1738.5, 1675, 1676, 1677, 1682, 1707.7, 1738.5, 1749, 1749.3, 1749.31, 1749.32, 1749.33, 1749.4, 1750, 1754, 1758.1, 1758.3, 1758.8, 1758.81, 1758.82, 1758.83, 1758.84, 1758.85, 1758.86, 1758.87, 1758.88, 1758.89, 10181.45, 10234.75, 10235.45, 10271, 10291.5, and 12921.2 of, 12921.2, and 13550 of, to amend the heading of Article 16.6 (commencing with Section 1758.8) of Chapter 5 of Part 2 of Division 1 of, to add Section 799.11 to, and to repeal and add Article 6.9 (commencing with Section 799) of Chapter 1 of Part 2 of Division 1 of, the Insurance Code, relating to insurance.
SB 1255, as amended, Committee on Insurance. Insurance.
Existing law provides for the powers and duties of the Department of Insurance and the Insurance Commissioner. Existing law authorizes the commissioner to deny an application for a production agency license, or revoke an existing license, if the applicant or licenseholder has engaged in specified activities. Existing law requires a hearing to suspend or revoke a license, registration, or certificate of authority that involves allegations of misconduct perpetrated against a person age 65 or over to be held within 90 days after the department’s receipt of the notice of defense, unless a continuance is granted. Existing law requires the department to maintain certain records in its office in the City and County of San Francisco.
This bill would make technical, nonsubstantive changes to those provisions and would require a proceeding as described above to be upon the request of the department. The bill would authorize that hearing to be set on the earliest available date if the Office of Administrative Hearings cannot accommodate the hearing within 90 days after the department’s receipt of the notice of defense. The bill would require the department to maintain certain records in its office in the San Francisco Bay area.
Existing law authorizes a life licensee to act on behalf of a life insurer or a disability insurer to transact life insurance and accident and health insurance, as specified. Existing law authorizes a life licensee to act as a life agent and specifies that these licenses are either “life-only” or “accident and health” licenses.
This bill would instead refer to those licenses as “life” and “accident and health or sickness” licenses and would make conforming changes.
Existing law prohibits the commissioner from approving a disability insurance policy, contract, or supplemental contract for insurance or delivery in this state if it meets certain criteria.
This bill would clarify that the commissioner cannot approve a disability insurance policy, contract, or supplemental contract for issuance or delivery in this state if it meets certain criteria.
Existing law prohibits a life insurance policy issued on or after January 1, 2021, that contains long-term care benefits and permits policy loans or cash withdrawals from prohibiting or limiting a loan or withdrawal while the insured receives payment of long-term care benefits, but authorizes future access to policy loans to be limited to the remaining cash value of the policy.
This bill would additionally authorize future access to cash withdrawals to be limited to the remaining cash value of the policy.
Existing law authorizes a life or disability income insurer to decline a life or disability income insurance application or enrollment request on the basis of positive test results from certain tests that detect antibodies to the human immunodeficiency virus (HIV) performed by or at the direction of the insurer.
This bill, on and after January 1, 2023, would instead prohibit an insurer from declining an application or enrollment request for coverage under a policy or certificate for life insurance or disability income insurance based solely on the results of a positive HIV test, regardless of when or at whose direction the test was performed. However, the bill would not prevent or restrict an insurer from refusing to insure an applicant that is HIV positive, limiting the amount, extent, or kind of coverage for an applicant that is HIV positive, or charging a different rate to an applicant that is HIV positive, if the refusal, limitation, or charge is based on sound actuarial principals and actual or reasonably anticipated experience.
Existing law imposes a civil penalty on a person who negligently or willfully discloses results of an HIV antibody test to a third party, except pursuant to written authorization or informed consent, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply. Under existing law, the penalty for a negligent violation of those provisions is a civil penalty in an amount not to exceed $1,000 plus court costs, and the penalty for a willful violation of those provisions is a civil penalty in an amount not less than $1,000 and not more than $5,000 plus court costs. If the negligent or willful disclosure results in economic, bodily, or psychological harm to the subject of the test, existing law makes the person guilty of a misdemeanor punishable by imprisonment in a county jail for a period not to exceed one year, by a fine not to exceed $10,000, or by both that fine and imprisonment. Existing law defines “HIV antibody test” for these purposes to mean an ELISA test or a Western Blot Assay, or both.
On and after January 1, 2023, this bill would eliminate the references to an HIV antibody test for purposes of those civil and criminal penalty provisions and instead would impose penalties for the negligent, willful, or malicious disclosure of results of an HIV test. The bill would increase the civil penalty for a negligent violation of those provisions to an amount not to exceed $2,500 plus court costs and would increase the civil penalty for a willful violation of those provisions to an amount not less than $5,000 and not more than $10,000 plus court costs. The bill would impose the same civil penalty for a malicious violation of those provisions as is provided for the willful violation. The bill would also increase the amount of the fine that may be imposed for a misdemeanor violation of those provisions to an amount not to exceed $25,000. By changing the definition of a crime, the bill would impose a state-mandated local program.
Existing law provides for the licensing of rental car agents and prohibits a rental car company from offering or selling insurance unless it is licensed as an insurance agent or broker, as described, or has been issued a license by the commissioner to act as a rental car agent, as specified.
This bill would revise the name of that license and the holder of that license to instead refer to a car rental agent license and a car rental agent. The bill would make conforming changes.
Existing law requires a health insurer to file with the department, for large group health insurance policies, the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. Existing law also requires a health insurer that is subject to that requirement to disclose specified aggregate rate information for the large group market submitted pursuant to that requirement. Existing law requires the department to conduct an annual public meeting regarding large group rates in order to permit a public discussion of the reasons for the changes in the rates.
This bill would instead require the department to conduct that public meeting in every even-numbered year.
Existing law enacts provisions, only until January 1, 2023, creating the Long Term Care Insurance Task Force in the Department of Insurance to examine the components necessary to design and implement a statewide long-term care insurance program. Existing law requires the task force to submit a report containing recommended options for establishing a statewide long-term care insurance program to the commissioner, the Governor, and the Legislature on or before July 1, 2021. Existing law also requires the department to produce an actuarial report of the recommendations no later than July 1, 2022.
This bill would extend those deadlines to January 1, 2023, and January 1, 2024, respectively. The bill would repeal these provisions on July 1, 2024.
Existing law requires an insurer to cooperate with the Department of Child Support Services and to identify and report a claimant to that department if a claim seeks an economic benefit for an obligor who owes past-due child support. Existing law defines an economic benefit under a life insurance policy, disability income insurance policy, or annuity to mean a payment totaling at least $1,000 in which an individual is paid as the payee or copayee for, among other, specified payments, a loan against the cash value or surrender value of an insurance policy or annuity, including loans for premium payments.
This bill would revise that definition by excluding loans for premium payments.
Section 32 of the Insurance Code is amended to read:
(a) A life and accident and health or sickness licensee is a person authorized to act as a life agent on behalf of a life insurer or a disability insurer to transact any of the following:
(2) Accident and health or sickness insurance.
(3) Life and accident and health or sickness insurance.
(b) Licenses to act as a life agent under this chapter shall be of the types as set forth in Section 1626.
(c) A life agent may be authorized to transact 24-hour care coverage, as defined in Section 1749.02, pursuant to the requirements of subdivision (d) of Section 1749 or subdivision (b) of Section 1749.33.
Section 769.56 of the Insurance Code is amended to read:
(a) A material change made by a health insurer, as defined in subdivision (b) of Section 106, to the terms and conditions of a contract between the health insurer and a life and accident and health or sickness agent shall not become effective until the health insurer has delivered to the life and accident and health or sickness agent, at least 45 days prior to the effective date of the change, written or electronic notice indicating the change or changes to the contract. For purposes of this section, a “material change” is a change made to a provision of the contract affecting any of the following:
(1) Commissions, bonuses, and incentives paid to the life and accident and health or sickness agent.
(3) Indemnification of the life and accident and health or sickness agent by the health insurer.
(4) Errors and omissions coverage requirements for the life and accident and health or sickness agent.
(1) The change to the contract is mutually agreed upon by the health insurer and the life and accident and health or sickness agent.
Article 6.9 (commencing with Section 799) is added to Chapter 1 of Part 2 of Division 1 of the Insurance Code, to read:
Article 6.9. The Equal Insurance HIV Act
(1) The laws governing the underwriting of insurance policies for individuals with acquired immunodeficiency syndrome (AIDS) were Article 6.9 (commencing with Section 799) of Chapter 1 of Part 2 of Division 1 of the Insurance Code was originally enacted in 1988 and were was last amended in 1997. These laws require an update to reflect advancements in testing and medical treatments for individuals living with the human immunodeficiency virus (HIV).
(2) When the HIV/AIDS epidemic began in the United States, HIV was considered a life-threatening condition because relatively little was known at the time about HIV detection, transmission, or treatment. Today, however, just as with diabetes or other chronic health conditions, HIV can be effectively managed.
(3) According to data collected by the Antiretroviral Therapy Cohort Collaboration from 1996 to 2013, inclusive, modern antiretroviral therapy (ART) is more sophisticated than original treatments, causes fewer adverse effects, and results in a life expectancy similar to people not living with HIV.
(4) The National Institutes of Health notes that ART can suppress an individual’s viral load to a point where HIV is undetectable in the blood, and the chance of HIV developing into AIDS is reduced.
(5) Research shows that in recent years, people living with HIV who are receiving treatment have a life expectancy of approximately 70 to 78 years or more, depending on other determinants of health and how early treatment was commenced, compared to a life expectancy of 39 years in 1996. The risk of death due to AIDS-related causes has declined dramatically.
(6) It is now possible for HIV-positive individuals to have an average life expectancy. They should have the same opportunities as other individuals with chronic medical conditions to purchase life insurance and disability income insurance.
(b) It is, therefore, the intent of the Legislature to ensure the equitable health and well-being of all people living in California.
(c) The purposes of this article are to do all of the following:
(1) Establish standards that prevent life or disability income insurers from making or permitting unfair distinctions between individuals of the same class in underwriting life insurance or disability income insurance for individuals living with HIV.
(2) Require the maintenance of strict confidentiality for personal information obtained through testing.
(3) Require informed consent before an a life or disability income insurer tests for HIV.
(b)“ARC” means an AIDS-related condition.
(b) “Certificate” means a certificate of group life insurance or a certificate of group disability income insurance delivered in this state, regardless of the situs of the group master policy. A certificate of life insurance benefits or disability income insurance benefits issued or delivered in this state by a fraternal benefit society is a “policy” as defined in subdivision (h).
(c) “Disability income insurance” means insurance against loss of occupational earning capacity arising from injury, sickness, or disablement.
(d) “HIV” or “human immunodeficiency virus” means the etiologic virus of AIDS.
(e) “HIV test” means any clinical test, laboratory or otherwise, used to identify HIV, a component of HIV, or antibodies or antigens to HIV.
(g)“Insurer”
(f) “Life or disability income insurer” means an insurer licensed to transact life insurance or disability insurance in this state that is transacting life insurance or disability income insurance in this state, or a fraternal benefit society licensed in this state that is transacting life insurance or disability income insurance in this state.
(g) “Life insurance” means a life insurance policy or life insurance coverage, but it does not include an annuity. the class of coverage described in Section 101, but, as used in this article, excludes annuities.
(h) “Policy” means an individual life insurance policy or individual disability income insurance policy issued or delivered in this state state, or a certificate of life insurance benefits or disability income insurance benefits issued or delivered in this state by a fraternal benefit society.
(a) An A life or disability income insurer shall not decline an application or enrollment request for coverage under a policy or certificate for life insurance or disability income insurance based solely on the results of a positive HIV test, regardless of when or at whose direction the test was performed.
(b) Notwithstanding any other law, this article does not prevent or otherwise restrict an a life or disability income insurer from refusing to insure an applicant that is HIV positive, limiting the amount, extent, or kind of coverage for an applicant that is HIV positive, or charging a different rate to an applicant that is HIV positive, if the refusal, limitation, or charge is based on sound actuarial principles and actual or reasonably anticipated experience.
(c) Transferring an applicant from a simplified, expedited, accelerated, or algorithmic underwriting process to a traditional medical underwriting process, based solely on the results of a positive HIV test, does not constitute a denial of the application or a violation of this section.
(d) This section applies to a policy, certificate, application, or enrollment request that meets both of the following requirements:
(1) It is issued, delivered, or received on or after January 1, 2023.
(2) In order to be effective, its issuance, delivery, or granting is contingent upon medical review for other diseases or medical conditions.
(a) An A life or disability income insurer shall not require a test for HIV or for the presence of antibodies to HIV for the purpose of determining insurability other than in accordance with the informed consent, counseling, and privacy protection provisions of this article and Article 6.6 (commencing with Section 791). Notwithstanding any other law, this constitutes the exclusive requirements for counseling, informed consent, and privacy protection for that testing.
(b) An A life or disability income insurer that asks an applicant to take undergo an HIV test shall obtain the applicant’s written informed consent for the test. Written informed consent shall include a description of the test to be performed, including its purpose, potential uses, and limitations, the meaning of its results, procedures for notifying the applicant of the results, and the right to confidential treatment of the results. Prior to the applicant’s execution of Before the applicant signs the consent, the insurer shall provide the applicant with both of the following: following, on paper or electronically, whichever the applicant chooses, but not by telephone:
(1) Printed material Material describing HIV, its causes and symptoms, the manner in which it is spread, the test or tests used to detect HIV or the HIV antibody, and what a person can do whose test results are positive or negative.
(2) A list of counseling resources available, where the applicant can obtain assistance in understanding the meaning of the test and its results. The list may shall be provided from publicly available information or internet websites, and may shall include resources available from the State Department of Public Health. Health and the federal Centers for Disease Control and Prevention.
(c) The insurer life or disability income insurer that asks an applicant to undergo an HIV test shall notify an applicant of a positive HIV test result by notifying the applicant’s designated physician. If the applicant tested has not given written consent authorizing a physician to receive the test results, the applicant shall be urged, at the time the applicant is informed of the positive test results, to contact a private physician, the county department of health, the State Department of Public Health, local medical societies, or alternative test sites for appropriate counseling and treatment. counseling.
An A life or disability income insurer shall not require an applicant to undergo an HIV test unless the cost of the test is borne by the insurer.
An A life or disability income insurer shall not consider the marital status, actual or perceived sexual orientation, gender, gender identity, or gender expression gender expression, race, color, religion, national origin, ancestry, living arrangements, beneficiary designation, or ZIP Codes or other territorial classification within this state, or any combination thereof, of an applicant for life insurance or disability income insurance in determining whether to require an HIV test of that applicant.
All underwriting activities undertaken by life or disability income insurers pursuant to this article shall be subject to all applicable provisions of Article 6.6 (commencing with Section 791). An application or enrollment request for life insurance or disability income insurance shall not contain a question pertaining to prior HIV tests unless the question is limited in scope to prior testing for the purpose of obtaining insurance.
If an applicant has had a positive HIV test, an a life or disability income insurer shall not report a code to an insurance support organization as defined in Section 791.02 or another insurer unless a nonspecific test result code is used that does not indicate that the individual was subject to an HIV test.
A policy or certificate shall not limit benefits otherwise payable if loss is caused or contributed to by AIDS or ARC HIV or AIDS unless the life or disability income insurer could have declined the application or enrollment request of the insured as provided in Section 799.02.
An A life or disability income insurer shall not require an applicant to take an HIV test if the results of the test would be used exclusively or nonexclusively for the purpose of determining eligibility for hospital, medical, or surgical insurance coverage or eligibility for coverage under a nonprofit hospital service plan or health care service plan.
(a) This section applies to the disclosure of the results of HIV tests requested by an a life or disability income insurer pursuant to this article and, notwithstanding Section 120980 of the Health and Safety Code, Section 120980 of the Health and Safety Code does not apply to the disclosure of the results of HIV tests conducted pursuant to this article.
(b) A person who negligently discloses results of an HIV test to any a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, shall be assessed a civil penalty in an amount not to exceed two thousand five hundred dollars ($2,500) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test.
(c) A person who willfully or maliciously discloses the results of an HIV test to a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, shall be assessed a civil penalty in an amount not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000) plus court costs, as determined by the court, which penalty and costs shall be paid to the subject of the test.
(d) A person who willfully, maliciously, or negligently discloses the results of an HIV test to a third party, in a manner that identifies or provides identifying characteristics of the person to whom the test results apply, except pursuant to a written authorization, as described in subdivision (g), or except as provided in this article or in Section 1603.1, 1603.3, or 121022 of the Health and Safety Code, or in any other law that expressly provides an exemption to this section, that results in economic, bodily, or psychological harm to the subject of the test, is guilty of a misdemeanor punishable by imprisonment in a county jail for a period not to exceed one year, or by a fine not to exceed twenty-five thousand dollars ($25,000) ($25,000), or by both that fine and imprisonment.
(e) A person who commits any act described in subdivision (b) or (c) shall be liable to the subject for all actual damages, including damages for economic, bodily, or psychological harm that is a proximate cause of the act.
This article shall become operative on January 1, 2023.
Section 799.11 is added to the Insurance Code, to read:
Section 1104.9 of the Insurance Code is amended to read:
(d) An agreement between the qualified custodian and the insurer shall not be approved by the commissioner unless the qualified custodian agrees therein to comply with this section. Except when the agreement is submitted in conjunction with an application for an original certificate of authority or variable contract life and variable annuity qualification, a fee of seven hundred forty-eight dollars ($748) shall be paid to the commissioner at the time of filing the agreement for approval. However, a fee shall not be required if the form of the agreement has been previously submitted for approval and approved by the commissioner as certified by the insurer and qualified custodian submitting the agreement to the commissioner. The agreement shall be deemed approved unless, within 60 days after receipt by the commissioner of that agreement and any required filing fee, the commissioner has disapproved the agreement in writing citing specific reasons for disapproval.
Section 1592 of the Insurance Code is amended to read:
The statement required by Section 1591 shall be verified in the manner prescribed in Sections 903 and 903.5 and the certificate of each trustee in the United States holding trusteed assets of the alien insurer shall be filed, showing the description and amount of the trusteed assets and the purpose for which they are held. The statement shall be filed in quadruplicate by the alien insurer with the office of the department in Los Angeles. Upon receipt of the four copies, the commissioner shall ensure that one copy is maintained at the department’s office in Los Angeles, one copy at the department’s office in the San Francisco Bay area, and one copy at the department’s office in Sacramento.
The commissioner may at other times require an admitted alien insurer to file similar statements, showing the information specified in Section 1591 with respect to another date prescribed by the commissioner.
Section 1622 of the Insurance Code is amended to read:
(a) A life and accident and health or sickness licensee is a person authorized to act on behalf of a life insurer or a disability insurer to transact any of the following:
(b) Licenses to act as a life and accident and health or sickness agent under this chapter shall be of the types set forth in Section 1626.
(a) A life and accident and health or sickness licensee is a person authorized to act as a life and accident and health or sickness agent. Licenses to act as a life and accident and health or sickness agent under this chapter shall be of the following types:
(1) Life-only, Life, which license shall entitle the licensee to transact insurance coverage on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.
(2) Accident and health, health or sickness, which license shall entitle the licensee to transact insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income.
(b) An accident and health or sickness agent licensee also is authorized to transact 24-hour care coverage, as defined in Section 1749.02, pursuant to subdivision (d) of Section 1749 or subdivision (d) of Section 1749.33.
(a) A license to act as a life-only life agent.
(b) A license to act as an accident and health or sickness agent.
(h) A license to act as a rental car car rental agent.
(c) A life-only life agent or an accident and health or sickness agent if the nonresident possesses a resident license in another state, territory of the United States, or province of Canada to transact life insurance or disability insurance.
(d) A nonresident may be granted authority to transact variable contracts if he or she life and variable annuity contracts if the person has been granted that authority by the state where the resident license is maintained. To qualify for this authority, the nonresident is required to also be licensed as a life-only life agent in the state where the resident license is maintained.
(g) A rental car car rental agent if the nonresident holds that type of license in the state, territory of the United States, or province of Canada where the resident license is maintained.
Section 1668 of the Insurance Code is amended to read:
The commissioner may deny an application for a license issued pursuant to this chapter if any of the following are true:
(a) The applicant is not properly qualified to perform the duties of a person holding the license for which the applicant applied.
(b) The granting of the license will be against public interest.
(c) The applicant does not intend actively and in good faith to carry on as a business with the general public the transactions that would be permitted by the issuance of the license for which the applicant applied.
(d) The applicant is not of good business reputation.
(e) The applicant is lacking in integrity.
(f) The applicant has been refused a professional, occupational, or vocational license or had a professional, occupational, or vocational license suspended or revoked by a licensing authority for reasons that should preclude the granting of the license for which the applicant applied.
(g) The applicant seeks the license for the purpose of avoiding or preventing the operation or enforcement of the insurance laws of this state.
(h) The applicant has knowingly or willfully made a misstatement in an application to the commissioner for a license, or in a document filed in support of that application, or has made a false statement in testimony given under oath before the commissioner or another person acting in the commissioner’s stead.
(i) The applicant has previously engaged in a fraudulent practice or act or has conducted any business in a dishonest manner.
(j) The applicant has shown incompetency or untrustworthiness in the conduct of any business, or has by commission of a wrongful act or practice in the course of any business exposed the public or those dealing with the applicant to the danger of loss.
(k) The applicant has knowingly misrepresented the terms or effect of an insurance policy or contract.
(l) The applicant has failed to perform a duty expressly enjoined upon them by this code or has committed an act expressly forbidden by this code.
(m) The applicant has been convicted of any of the following:
(2) A misdemeanor specified by this code or other laws regulating insurance.
(3) A public offense having as one of its necessary elements a fraudulent act or an act of dishonesty in acceptance, custody, or payment of money or property.
(n) The applicant has aided or abetted a person in an act or omission that would constitute grounds for the suspension, revocation, or refusal of a license or certificate issued under this code to the person aided or abetted.
(o) The applicant has permitted a person in the applicant’s employ to violate this code.
(p) The applicant has violated a law relating to conduct of business that could lawfully be done only under authority conferred by that license.
Section 1668.5 of the Insurance Code is amended to read:
(a) The commissioner may deny an application for a license issued pursuant to this chapter, and may suspend or revoke the permanent license of an organization licensed pursuant to this chapter as authorized by Section 1738, if the applicant or holder of the permanent license is an organization and a controlling person of the organization is any of the following:
(2) The controlling person has shown incompetency or untrustworthiness in the conduct of any business, or has by commission of a wrongful act or practice in the course of any business exposed the public or those dealing with the controlling person to the danger of loss.
(4) The controlling person has failed to perform a duty expressly enjoined upon them by a provision of this code or has committed an act expressly forbidden by a provision of this code.
(B) A misdemeanor specified by this code or other laws regulating insurance.
(6) The controlling person has aided or abetted a person in an act or omission that would constitute grounds for the suspension, revocation, or refusal of a license or certificate issued under this code to the person aided or abetted.
(7) The controlling person has permitted a person in the controlling person’s employ to violate this code.
(8) The controlling person has violated a law relating to conduct of business that could lawfully be done only under authority conferred by a license under this chapter.
(b) As used in this section, “controlling person” means a person who possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the organization, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, including, but not limited to, power that is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, more than 10 percent of the voting securities of the organization. This presumption may be rebutted by a showing that control does not exist in fact. The commissioner may, after furnishing all persons in interest notice and opportunity to be heard, determine that control exists in fact, notwithstanding the absence of a presumption to that effect.
(2) Been convicted of a misdemeanor specified by this code or by other laws regulating insurance.
(b) Had a previous application for a professional, occupational, or vocational license denied for cause by a licensing authority, within five years of the date of the filing of the application to be acted upon, on grounds that should preclude the granting of a license by the commissioner under this chapter.
(c) Had a previously issued professional, occupational, or vocational license suspended or revoked for cause by a licensing authority, within five years of the date of the filing of the application to be acted upon, on grounds that should preclude the granting of a license by the commissioner under this chapter.
If the commissioner issues an order based on a plea that does not at any time result in a judgment of conviction, the commissioner shall vacate the order upon petition by the applicant.
(b) An applicant for a license to act as a life-only life agent who has been licensed as a life-only life agent during any part of the license year in which the application is filed or the immediately preceding license year.
(c) An applicant for a license to act as an accident and health or sickness agent who has been licensed as an accident and health or sickness agent during any part of the license year in which the application is filed or the immediately preceding license year.
(f) (1) A nonresident licensee who applies for a property broker-agent, casualty broker-agent, personal lines broker-agent, or life agent resident license in this state, and who is currently licensed for the same lines of authority in the state of his or her the current resident license, shall not be required to complete an examination. The application shall be received within 90 days of the cancellation of the applicant’s resident license and the producer database records, maintained by the National Association of Insurance Commissioners, shall indicate that the producer is licensed in good standing for the line of authority requested.
Section 1676 of the Insurance Code is amended to read:
(b) An application for both the life-only life and accident and health or sickness license types shall meet the requirement in subdivision (a) by passing one examination covering subjects pertaining to both license types. These applicants shall pay the fee for a life agent, as specified in paragraph (4) of subdivision (a) of Section 1751.
(c) An applicant for a life-only life license pursuant to Section 1626 or a life-only life license limited to the payment of funeral and burial expenses who is limited by the terms of a written agreement with an insurer that has filed on that life-only life agent’s behalf a notice of appointment with the commissioner to transact only specific life insurance policies or annuities having an initial face amount of twenty thousand dollars ($20,000) or less that are designated by the purchaser for the payment of funeral and burial expenses, shall not be required to take the full life agent examination to obtain a license. The applicant shall be required to take an examination developed to test their knowledge of topics relevant to the type of policies that they are restricted to sell.
Section 1677 of the Insurance Code, as amended by Section 2 of Chapter 560 of the Statutes of 2016, is amended to read:
(b) On and after January 1, 2018, the examination for a license as a life agent, life-only agent, agent and accident and health or sickness agent shall be provided in English and Spanish.
Section 1682 of the Insurance Code is amended to read:
(1) The accident and health or sickness agent type examinations, which include both of the following:
(A) The accident and health or sickness agent examination.
(B) The life, life and accident and health or sickness agent combination examination.
(C) The life-only life agent examination.
(8) The life, life and accident and health or sickness agent combination type examinations, which include all of the following:
(A) The life, life and accident and health or sickness agent combination examination.
(B) The accident and health or sickness agent examination.
(D) The life-only life agent examination.
(9) The life-only life agent type examinations, which include all of the following:
(A) The life-only life agent examination.
(1) The accident and health or sickness agent examination.
(8) The life, life and accident and health or sickness agent combination examination.
(9) The life-only life agent examination.
(d) Except as provided in this article, there is no not a limitation on the frequency with which a person may take license qualification examinations.
Section 1707.7 of the Insurance Code is amended to read:
(a) The total number of applications filed for a fire property and casualty broker-agent license, a property broker-agent license, a casualty broker-agent license, a personal lines broker-agent license, a limited lines auto-only agent license, a life-only life agent license, and an accident and health or sickness agent license.
(b) The total number of licensees issued a fire property and casualty license, a property broker-agent license, a casualty broker-agent license, a personal lines license, a limited lines automobile license, a life-only life license, and an accident and health or sickness license.
(c) The total number of licensees with both a life-only life agent license and an accident and health or sickness agent license.
(e) At the end of five years following the issuance of auto-only agent, life-only life agent, and accident and health or sickness agent licenses, a cumulative summary of the data required by this section compared to the licenses issued for fire property and casualty broker-agent, property broker-agent, casualty broker-agent, personal lines broker-agent, and life agent for the year immediately preceding the creation of this section.
SEC. 7.SEC. 19.
Section 1738.5 of the Insurance Code is amended to read:
Upon the request of the department, a proceeding held pursuant to Section 1668, 1668.5, 1738, 1739, or 12921.8 that involves allegations of misconduct perpetrated against a person age 65 or over shall be held within 90 days after receipt by the department of the notice of defense, unless a continuance of the hearing is granted by the department or the administrative law judge. If the Office of Administrative Hearings cannot accommodate a hearing within 90 days, the hearing shall be set on the earliest available date and the delay shall not prejudice either party. When the matter has been set for hearing, only the administrative law judge may grant a continuance of the hearing. The administrative law judge may, but need not, grant a continuance of the hearing, only upon finding the existence of one or more of the following:
Section 1749 of the Insurance Code is amended to read:
The department shall require all new applicants for license as a property broker-agent, casualty broker-agent, limited lines automobile insurance agent, personal lines broker-agent, life-only life agent, or accident and health or sickness agent to meet prelicensing education standards as follows:
(d) Require a minimum of 20 hours of prelicensing study as a prerequisite for qualification for a life-only life agent license. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. Any additions to the minimum requirements provided by this section shall be approved by the curriculum board pursuant to Section 1749.1 and certified by the department.
(f) Require a minimum of 20 hours of prelicensing study as a prerequisite for qualification for an accident and health or sickness insurance agent license. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval. Any additions to the minimum requirements under this section shall be approved by the curriculum board pursuant to Section 1749.1 and certified by the department. This curriculum shall also include instruction in workers’ compensation and general principles of employers’ liability.
(g) In addition to the 20 hours of prelicensing education required to qualify for a license as a property broker-agent, casualty broker-agent, personal lines broker-agent, a life-only life agent, or an accident and health or sickness agent, or the 20 hours of prelicensing education required to qualify for a license as a limited lines automobile insurance agent, the department shall require 12 hours of study on ethics and this code. Where an applicant seeks a license for more than one of the following license types: a property broker-agent license, a casualty broker-agent license, a personal lines broker-agent license, a life-only life license, or an accident and health or sickness license, the applicant shall only be required to complete one 12-hour course on ethics and this code. The curriculum for satisfying this requirement shall be approved by the curriculum board and submitted to the commissioner for final approval.
(h) An applicant for a life-only life agent license, an accident and health or sickness license, a personal lines broker-agent license, or a limited lines automobile insurance agent license, who is currently licensed as a nonresident in this state shall be required to complete only the course of study on ethics and this code, as required by this section. Additionally, any applicant for that license holding one or more of the designations specified in subdivisions (a) to (p), inclusive, of Section 1749.4 shall be exempted from any requirement for courses in general insurance that would otherwise be a condition of issuance of the license.
An individual licensed as a life-only life agent or an accident and health or sickness agent and also licensed as a property or casualty broker-agent, or an individual only licensed as a property or casualty broker-agent, shall complete those courses, programs of instruction, or seminars approved by the commissioner for the type of license held. Completion of specified product training required in subdivision (d) of Section 1749.33, subdivision (b) of Section 1749.8, and paragraph (4) of subdivision (a) of Section 10234.93 may result in the completion of more than the minimum of required continuing education hours. The minimum number of hours required is as follows:
(a) Any A licensee, as specified in this section, shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. These hours of instruction may be completed at any time prior to renewal of the license.
(b) An individual licensed as a property broker-agent or casualty broker-agent and as a life-only life agent or an accident and health or sickness agent shall satisfy the requirements of this section by demonstrating completion of the courses, programs of instruction, or seminars approved by the commissioner for any of the license types listed in this section.
(c) A licensee shall not be is not required to comply with the requirements of this article if the licensee submits proof satisfactory to the commissioner that he or she the licensee has been a licensee in good standing for 30 continuous years in this state and is 70 years of age or older. This exemption shall does not apply to those individuals licensed for the first time on or after January 1, 2010.
(b) An individual licensed as a personal lines broker-agent and as a life-only life agent or accident and health or sickness agent shall satisfy the requirements of this section by satisfactorily completing 24 hours of instruction prior to renewal of the license.
(b) An individual licensed as a limited automobile insurance agent and as a life-only life agent or accident and health or sickness agent shall satisfy the requirements of this section by satisfactorily completing 24 hours of instruction prior to renewal of the license.
(a) A life-only life agent licensee shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. These hours of instruction may be completed at any time prior to renewal of the license.
(b) An accident and health or sickness agent licensee shall satisfactorily complete 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. These hours of instruction may be completed at any time prior to renewal of the license.
(c) An agent licensed as both a life-only life agent and as an accident and health or sickness agent shall satisfactorily complete a total of 24 hours of instruction, of which three hours shall be in ethics, prior to renewal of the license. These hours of instruction may be completed at any time prior to renewal of the license.
(d) Any accident and health or sickness agent who wishes to sell 24-hour care coverage, as defined in Section 1749.02, shall complete a course, program of instruction, or seminar of an approved continuing education provider on workers’ compensation and general principles of employer liability, which shall be completed by examination approved by the commissioner as part of the continuing education course, program of instruction, or seminar prior to selling this coverage. The required number of instruction hours shall be equal to but no greater than that required by the curriculum board for the prelicensing requirements of a property broker-agent or a casualty broker-agent on these subjects. For resident licensees, this requirement shall count toward the licensee’s continuing education requirement, but may still result in completing more than the minimum number of continuing education hours set forth in this section. Nothing in this section shall be deemed to allow This section does not authorize an accident and health or sickness agent to satisfy the obligations set forth in this section by other than a proctored examination administered or approved by the department.
Section 1749.4 of the Insurance Code is amended to read:
(a) Any part of the Life Underwriter Training Council Fellow (LUTCF) program totaling 30 hours for the life-only life license and the accident and health or sickness license.
(b) Any part of the Chartered Life Underwriter (CLU) curriculum totaling 30 hours for the life-only life license and the accident and health or sickness license.
(e) Any part of the Certified Insurance Counselor (CIC) program totaling 25 hours for the life-only life or accident health and health or sickness agent license and the property broker-agent license or the casualty broker-agent license.
(f) Any part of the Certified Employee Benefit Specialists (CEBS) program totaling 25 hours for the life-only life license and the accident and health or sickness license.
(g) Any part of the Chartered Financial Consultant (ChFC) program totaling 30 hours for the life-only life license.
(h) Any part of the Certified Financial Planner (CFP) program totaling 30 hours for the life-only life license.
(i) Any part of the Fellow, Life Management Institute (FLMI) program totaling 30 hours for the life-only life license and the accident and health or sickness license.
(j) Any part of the Health Insurance Associate (HIA) program totaling 25 hours for the accident and health or sickness license.
(k) Any part of the Registered Employee Benefits Consultant (REBC) program totaling 30 hours for the accident and health or sickness license.
(l) Any part of the Registered Health Underwriter (RHU) program totaling 30 hours for the accident and health or sickness license.
(n) Any An insurance-related course approved by the curriculum board and the commissioner taught by an accredited college or university per credit hour granted totaling 15 hours.
(o) Any A course or program of instruction or seminar developed or sponsored by an authorized insurer, recognized agents’ association, or insurance trade association, or any independent program of instruction shall, if approved by the curriculum board and the commissioner, qualify for the equivalency of the number of classroom hours assigned thereto by the curriculum board and the commissioner.
(p) Any A correspondence course approved by the curriculum board and the commissioner shall qualify for the equivalency of the number of classroom hours assigned thereto by the commissioner.
(i) Variable contract life and variable annuity authority, nonresident, when not also applying for a nonresident life agent license, eighty-five dollars ($85).
Section 1754 of the Insurance Code is amended to read:
(3) The limited lines travel insurance agent has designated one of its employees to be responsible for its compliance with the insurance laws, rules, and regulations of the state. The limited lines travel insurance agent and its designated responsible employees shall hold property, casualty, life-only, life, and accident and health or sickness agent licenses, to the extent required by this chapter, based upon the types of insurance transacted by the licensee.
(a) For the purpose of making provision for the issuance of policies or contracts authorized by Article 5 (commencing with Section 10506) of Chapter 5 of Part 2 of Division 2, the commissioner may grant authority to transact variable contracts life and variable annuity to a person or a natural person named on a license of an organization licensed as a life agent that is appointed by an admitted insurer that is required to register itself or to register a separate account or fund with the United States Securities and Exchange Commission under the Federal Investment Company Act of 1940, or to register its variable policies or contracts with the Securities and Exchange Commission under the Federal Securities Act of 1933, and has complied with that requirement. The commissioner may grant variable contract life and variable annuity authority to a person who is not a resident of California and is not a licensed life agent in California provided that the person is licensed for both life and variable contract annuity authority in his or her the resident state.
(b) No person shall A person shall not act as an agent of the insurer in the transaction of the policies or contracts unless he or she the person holds a valid authority under this article.
The commissioner shall not grant authority to transact variable contracts life and variable annuity unless the life agent or applicant furnishes proof that he or she the person is registered to sell securities in California in accordance with the rules of the United States Securities and Exchange Commission or the Financial Industry Regulatory Authority. Any authority granted to a life agent to transact variable contracts life and variable annuity shall immediately terminate upon the life agent no longer being registered to sell securities in accordance with the rules of the United States Securities and Exchange Commission or the Financial Industry Regulatory Authority.
The heading of Article 16.6 (commencing with Section 1758.8) of Chapter 5 of Part 2 of Division 1 of the Insurance Code is amended to read:
Article 16.6. Rental Car Car Rental Agents
Section 1758.8 of the Insurance Code is amended to read:
(a) No A rental car company shall not offer or sell insurance unless it is licensed as an insurance agent or broker pursuant to Article 3 (commencing with Section 1631) or has complied with the requirements of this article and has been issued a license by the commissioner as provided in this article.
(b) The commissioner may issue to a rental car company, or to a franchisee of a rental car company, that has complied with the requirements of this article, a license that authorizes the rental car company or the franchisee of a rental car company to act as a rental car car rental agent to offer or sell those types of insurance specified in Section 1758.85, in connection with and incidental to rental agreements, on behalf of any insurer authorized to write those types of insurance in this state.
Section 1758.81 of the Insurance Code is amended to read:
(a) An applicant for a rental car car rental agent license under this article shall file the following documents with the commissioner:
(2) A certificate by the insurer that is to be named in the rental car car rental agent license, stating that the insurer has satisfied itself that the named applicant is trustworthy and competent to act as its insurance agent limited to this purpose and that the insurer will appoint the applicant to act as its agent to transact the kind or kinds of insurance that are permitted by this article, if the rental car car rental agent license applied for is issued by the commissioner. The certification shall be subscribed by an officer or managing agent of the insurer on a form prescribed by the commissioner.
(4) Not less than 60 days before a permanent license will expire, the commissioner may use an electronic delivery method, including email or other similar electronic method of delivery, to deliver, or may mail, to the latest email or mailing address appearing on his or her the licensee’s records, an application to the licensee to renew the license for the appropriate succeeding license period. It is the licensee’s responsibility to renew whether or not a renewal application is received. The commissioner may accept a late renewal without a penalty, provided the licensee’s failure to comply is due to clerical error or inadvertence on the part of the department.
Section 1758.82 of the Insurance Code is amended to read:
(a) An employee of a rental car company or franchisee of a rental car company that has been issued a rental car car rental agent license pursuant to this article may be an endorsee authorized to offer insurance products under the authority of the rental car car rental agent license if all of the following conditions have been met:
(2) The rental car company, at the time it submits its rental car car rental agent license application pursuant to Section 1758.81, also establishes a list of the names of all endorsees to its rental car car rental agent license. The list shall be maintained by the rental car company in a form prescribed by the commissioner and updated annually. The list shall be retained by the rental car company for three years and made available to the commissioner for review and inspection.
(3) The rental car company submits to the commissioner with its initial rental car car rental agent license application and annually thereafter a certification, subscribed by an officer of the company on a form prescribed by the commissioner, stating all of the following:
(A) The number of endorsees offering insurance products under the authority of the rental car car rental agent license for the applicable period.
(1) Each rental car car rental endorsee shall receive instruction about the types of insurance specified in Section 1758.85 that are offered for sale to prospective renters.
(2) Each rental car car rental endorsee shall receive training about ethical sales practices.
(3) Each rental car car rental endorsee shall receive training about the disclosures to be given to prospective renters pursuant to subdivision (c) of Section 1758.86.
Section 1758.83 of the Insurance Code is amended to read:
(b) An endorsee may act on behalf and under the supervision of the rental car car rental agent in matters relating to transacting insurance under that agent’s license. The conduct of an endorsee of a rental car car rental agent acting within the scope of employment or agency shall be deemed the conduct of the rental car car rental agent for purposes of this article.
Section 1758.84 of the Insurance Code is amended to read:
(1) After notice and hearing, suspend or revoke the license of the rental car car rental agent.
(2) After notice and hearing impose fines on the rental car car rental agent for its conduct or that of its endorsees.
(b) If any person sells insurance in connection with, or incidental to, rental car agreements or holds himself or herself or claims to be or holds an organization out as a rental car car rental agent without obtaining the license required by this article, or as being an endorsee when that person is not an endorsee, or as being licensed pursuant to Chapter 5 (commencing with Section 1631) without obtaining that license, the commissioner may issue a cease and desist order pursuant to Section 12921.8.
(c) Notwithstanding any other provision of law to the contrary, the provisions of Section 1748.5 are applicable to both the rental car car rental agent and any endorsee to the license of the rental car car rental agent.
Section 1758.85 of the Insurance Code is amended to read:
A rental car company or franchisee licensed under this article may act as a rental car car rental agent for an authorized insurer only in connection with the rental of vehicles and only with respect to the following kinds of insurance:
Section 1758.86 of the Insurance Code is amended to read:
A rental car car rental agent shall not sell insurance pursuant to this article unless all of the following conditions are satisfied:
(b) The rental car car rental agent provides brochures or other written materials to the prospective renter that do all of the following:
(c) The rental car car rental agent or its endorsee makes all of the following disclosures to the renter, which shall be acknowledged in writing by the renter, or displayed by clear and conspicuous signs that are posted at every location where rental agreements are executed, such as the counter where the renter signs the rental agreement:
(2) That the insurance policies offered by the rental car car rental agent may provide a duplication of coverage already provided by a renter’s personal automobile insurance policy or by another source of coverage.
(3) That the endorsee on the rental car car rental agent’s license is not qualified or authorized to evaluate the adequacy of the purchaser’s existing insurance coverages.
(e) The insurance is provided under an individual policy issued to the purchaser, or under a group, or master policy issued to an organization licensed as a rental car car rental agent by an insurer authorized to transact the applicable kinds or types of insurance in this state.
Section 1758.87 of the Insurance Code is amended to read:
A rental car car rental agent shall not do any of the following:
Section 1758.88 of the Insurance Code is amended to read:
Any insurer that provides insurance to be sold by a rental car company or franchisee of a rental car company under this article shall file a copy of any individual policy issued to a purchaser, or any policy or certificate issued under a group or master policy to an organization licensed as a rental car car rental agent, with the commissioner, who shall make that policy available to the public.
Section 1758.89 of the Insurance Code is amended to read:
(f) “Rental car “Car rental agent” means a person or organization licensed pursuant to this article to offer insurance in connection with and incidental to rental car agreements on behalf of an insurer authorized to write those types of insurance in this state.
(g) “Endorsee” means an unlicensed employee of a rental car car rental agent who meets the requirements of this article.
(a) For large group health insurance policies, a health insurer shall file with the department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The average shall be weighted by the number of insureds in each large group benefit design in the insurer’s large group market and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. For the purposes of this section, the large group benefit design includes, but is not limited to, benefits such as basic health care services and prescription drugs. The large group benefit design shall not include cost sharing, including, but not limited to, deductibles, copays, and coinsurance.
(2) The department shall conduct an annual a public meeting in every even-numbered year regarding large group rates within four months of posting the aggregate information described in this section in order to permit a public discussion of the reasons for the changes in the rates, benefits, and cost sharing in the large group market. The meeting shall be held in either the Los Angeles area or the San Francisco Bay area.
(3) (A) The insurer’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology for the applicable 12-month period ending January 1 of the following year.
(B) The amount of the projected trend separately attributable to the use of services, price inflation, and fees and risk for annual policy trends by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.
Section 10234.75 of the Insurance Code is amended to read:
(g) The task force shall recommend options for establishing a statewide long-term care insurance program and comment on the respective degrees of feasibility of those options in a report submitted to the commissioner, the Governor, and the Legislature on or before July 1, 2021. January 1, 2023. The report submitted to the Legislature shall be submitted in accordance with Section 9795 of the Government Code.
(h) To ensure an adequate benefit within a solvent program, the department shall, no later than July 1, 2022, January 1, 2024, produce an actuarial report of the recommendations made by the task force pursuant to subdivision (g). The report shall be shared with and approved by the members of the task force. If approved the report shall be submitted to the Legislature in accordance with Section 9795 of the Government Code.
(j)This section shall remain in effect only until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
(j) This section shall remain in effect only until July 1, 2024, and as of that date is repealed.
SEC. 8.SEC. 43.
Section 10235.45 of the Insurance Code is amended to read:
(1) Payment of an accelerated death benefit for long-term care shall result in no more than a pro rata reduction in the cash value of the life insurance policy. A reduction in cash value shall be proportionally equal to the percentage of death benefits accelerated to produce the accelerated death benefit payment. Future access to policy loans and cash withdrawals may be limited to the remaining cash value.
(2) Notwithstanding paragraph (1), payment of an accelerated death benefit for long-term care may be considered a lien against the death benefit of the life insurance policy, and access to the cash value of the life insurance policy may be restricted to the excess of the cash value over the sum of outstanding policy loans and the lien. Future access to policy loans and cash withdrawals may also be limited to the excess of the cash value over the sum of outstanding policy loans and the lien.
(2) An explanation of changes to the policy that would occur as a result of the payment, including, but not limited to, a prohibition or limitation of access to loans or cash withdrawals.
(2) An explanation of changes to the remaining death benefit, cash value or accumulation account, policy loan value, outstanding policy loan amount, no-lapse guarantee, policy lien, and premium payments or cost of insurance charges.
(f) If a policyholder or certificate holder initiates a request to take a loan or withdrawal from the cash value of a life insurance policy that accelerates benefits for long-term care, the insurer shall provide the policyholder or certificate holder with the information described in paragraphs (1) to (7), inclusive, of this subdivision. The request shall be deemed incomplete, and the insurer shall not approve the loan or withdrawal, until the information has been provided and the policyholder or certificate holder submits a response that finalizes the request for the loan or withdrawal. The insurer shall send the policyholder or certificate holder a dated statement that includes all of the following:
(1) An explanation of changes to the policy that would occur as a result of the loan or withdrawal.
(3) If a policyholder or certificate holder is initiating a request for a loan, a notice stating: “WARNING: Loans may reduce and potentially eliminate your death benefit and your long-term care benefits. Receipt of a loan may adversely affect your eligibility for Medicaid or other government entitlements, and loan proceeds may be taxable at your death if the loan is not repaid. Please consult a financial advisor.”
(4) If a policyholder or certificate holder is initiating a request for a withdrawal, a notice stating: “WARNING: Cash withdrawals may reduce and potentially eliminate your death benefit and your long-term care benefits. Receipt of a cash withdrawal may be taxable and may also adversely affect your eligibility for Medicaid or other government benefits or entitlements. Please consult a financial advisor.”
SEC. 9.SEC. 44.
(a) Except as set forth in this section, this chapter shall does not apply to, or in any way affect, provisions in life insurance, endowment, or annuity contracts, or contracts supplemental thereto, that provide additional benefits in case of death or dismemberment or loss of sight by accident, or that operate to safeguard those contracts against lapse, as described in subdivision (a) of Section 10271.1, or give a special surrender benefit, as defined in subdivision (b) of Section 10271.1, or an accelerated death benefit as defined in Article 2.1 (commencing with Section 10295), in the event that the owner, insured, or annuitant, as applicable, meets the benefit triggers specified in the life insurance or annuity contract or supplemental contract.
(1) A life insurance policy or annuity contract that contains a supplemental benefit shall provide that the contract, supplemental contract, and papers attached thereto by the insurer, including the application if attached, constitute the entire insurance or annuity contract and shall also provide that an agent does not have the authority to change the contract or to waive its provisions. This provision shall be preceded individually by a caption stating “ENTIRE CONTRACT; CHANGES:” or other appropriate caption as the commissioner may approve.
(2) The supplemental benefit shall provide that reinstatement of the supplemental benefit shall be on the same or more favorable terms as reinstatement of the underlying life insurance policy or annuity contract. Following reinstatement, the insured and insurer shall have the same rights under reinstatement as they had under the supplemental benefit immediately before the due date of the defaulted premium, subject to the provisions endorsed in the rider or endorsement or attached to the rider or endorsement in connection with the reinstatement. This reinstatement provision shall be preceded individually by a caption stating “REINSTATEMENT:” or other appropriate caption as the commissioner may approve.
(A) The supplemental benefit shall provide either that the insurer may accept written notice of claim at any time or that the insurer may require that written notice of claim be submitted by a due date that is no less than 20 days after an occurrence covered by the supplemental benefit, or commencement of a loss covered by the supplemental benefit, or as soon after the due date as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary, as applicable, to the insurer at the insurer’s address or telephone number, or to an authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. This provision shall be preceded individually by a caption stating “NOTICE OF CLAIM:” or other appropriate caption as the commissioner may approve.
(B) The accelerated death benefit shall provide either that the insured may give notice of claim at any time or that the insured shall give notice of claim by a due date that is at least 20 days after the insured receives documentation that establishes the occurrence of a qualifying event, or as soon after the due date as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary, as applicable, to the insurer at the insurer’s address or telephone number, or to an authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. This provision shall be preceded individually by a caption stating “NOTICE OF CLAIM:” or other appropriate caption as the commissioner may approve.
(A) The supplemental benefit shall provide that the insurer may require, in the case of a claim for which the supplemental benefit provides a periodic payment contingent upon continuing occurrence or loss, that the insured provide written proof of occurrence or proof of loss no less than 90 days after the termination of the period for which the insurer is liable, and, in the case of claim for any other occurrence or loss, that the insured provide written proof of occurrence or proof of loss within 90 days after the date of the occurrence or loss. Failure to furnish proof within the time required shall not invalidate or reduce the claim if it was not reasonably possible to give proof within the time, provided proof is furnished as soon as reasonably possible and, except in the absence of legal capacity, no later than one year from the time proof is otherwise required. This provision shall be preceded individually by a caption stating “PROOF OF LOSS:” or other appropriate caption as the commissioner may approve.
(d) The commissioner shall not approve a contract or supplemental contract for issuance or delivery in this state if the commissioner finds that the contract or supplemental contract does any of the following:
(1) Contains a provision, label, description of its contents, title, heading, backing, or other indication of its provisions that is unintelligible, uncertain, ambiguous, or abstruse, or likely to mislead a person to whom the supplemental benefit is offered, delivered, or issued.
(3) Contains actuarial information that is materially incomplete, incorrect, or inadequate.
(e) A supplemental benefit described in subdivision (a) shall not contain a title, description, or any other indication that would describe or imply that the supplemental benefit provides long-term care coverage.
(f) Commencing two years from the date of the issuance of the supplemental benefit, no claim for loss incurred or disability, as defined by the supplemental benefit, may be reduced or denied on the grounds that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed before the effective date on the coverage of the supplemental benefit.
(A) A drug, unless prescribed or administered by a physician and taken in accordance with the physician’s instructions.
(h) If the commissioner notifies the insurer, in writing, that the filed form or actuarial information does not comply with the law and specifies the reasons for the commissioner’s opinion, it is unlawful for an insurer to issue a policy in that form.
SEC. 10.SEC. 45.
Section 10291.5 of the Insurance Code is amended to read:
(b) The commissioner shall not approve a disability policy for issuance or delivery in this state in any of the following circumstances:
(1) If the commissioner finds that it contains a provision, or has a label, description of its contents, title, heading, backing, or other indication of its provisions that is unintelligible, uncertain, ambiguous, or abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued.
(2) If it contains a provision for payment at a rate, or in an amount (other than the product of rate times the periods for which payments are promised) for loss caused by particular event or events (as distinguished from character of physical injury or illness of the insured) more than triple the lowest rate, or amount, promised in the policy for the same loss caused by another event or events (loss caused by sickness, loss caused by accident, and different degrees of disability each being considered, for the purpose of this paragraph, a different loss); or if it contains a provision for payment for a confining loss of time at a rate more than six times the least rate payable for a partial loss of time or more than twice the least rate payable for a nonconfining total loss of time; or if it contains a provision for payment for any nonconfining total loss of time at a rate more than three times the least rate payable for any partial loss of time.
(3) If it contains a provision for payment for disability caused by particular event or events (as distinguished from character of physical injury or illness of the insured) payable for a term more than twice the least term of payment provided by the policy for the same degree of disability caused by another event or events; or if it contains a benefit for total nonconfining disability payable for lifetime or for more than 12 months and a benefit for partial disability, unless the benefit for partial disability is payable for at least three months; or if it contains a benefit for total confining disability payable for lifetime or for more than 12 months, unless it also contains benefit for total nonconfining disability caused by the same event or events payable for at least three months, and, if it also contains a benefit for partial disability, unless the benefit for partial disability is payable for at least three months. This paragraph shall apply separately to accident benefits and to sickness benefits.
(4) If it contains a provision or provisions that would have the effect, upon termination of the policy, of reducing or ending the liability as the insurer would have, but for the termination, for loss of time resulting from accident occurring while the policy is in force or for loss of time commencing while the policy is in force and resulting from sickness contracted while the policy is in force or for other losses resulting from accident occurring or sickness contracted while the policy is in force, and also contains provision or provisions reserving to the insurer the right to cancel or refuse to renew the policy, unless it also contains other provision or provisions the effect of which is that termination of the policy as the result of the exercise by the insurer of that right shall not reduce or end the liability in respect to the hereinafter specified losses as the insurer would have had under the policy, including its other limitations, conditions, reductions, and restrictions, had the policy not been terminated.
(i) Loss of time that begins while the policy is in force and results from sickness contracted while the policy is in force.
(ii) Loss of time that begins within 20 days following and results from accident occurring while the policy is in force.
(iii) Losses that result from accident occurring or sickness contracted while the policy is in force and arise out of the care or treatment of illness or injury and which occur within 90 days from the termination of the policy or during a period of continuous compensable loss or losses which period commences before the end of those 90 days.
(iv) Losses other than those specified in clause (i), (ii), or (iii) that result from accident occurring or sickness contracted while the policy is in force and which losses occur within 90 days following the accident or the contraction of the sickness.
(5) If a caption, label, title, or description of contents the policy states, implies, or infers without reasonable qualification that it provides loss of time indemnity for lifetime, or for a period of more than two years, if the loss of time indemnity is made payable only when house confined or only under special contingencies not applicable to other total loss of time indemnity.
(6) If it contains a benefit for total confining disability payable only upon condition that the confinement be of an abnormally restricted nature unless the caption of the part containing that benefit is accurately descriptive of the nature of the confinement required and unless, if the policy has a description of contents, label, or title, at least one of them contain reference to the nature of the confinement required.
(7) (A) If, irrespective of the premium charged therefor, a benefit of the policy is, or the benefits of the policy as a whole are, not sufficient to be of real economic value to the insured.
(C) To be of real economic value, it shall not be necessary that any benefit or benefits cover the full amount of a loss which might be suffered by reason of the occurrence of a hazard or event insured against.
(8) If it substitutes a specified indemnity upon the occurrence of accidental death for a benefit of the policy, other than a specified indemnity for dismemberment, that would accrue before that death or if it contains a provision that has the effect, other than at the election of the insured exercisable within not less than 20 days in the case of benefits specifically limited to the loss by removal of one or more fingers or one or more toes or within not less than 90 days in all other cases, of doing any of the following:
(A) Of substituting, upon the occurrence of the loss of both hands, both feet, one hand and one foot, the sight of both eyes or the sight of one eye and the loss of one hand or one foot, some specified indemnity for any or all benefits under the policy unless the indemnity so specified is equal to or greater than the total of the benefit or benefits for which that specified indemnity is substituted and which, assuming in all cases that the insured would continue to live, could possibly accrue within four years from the date of that dismemberment under all other provisions of the policy applicable to the particular event or events (as distinguished from character of physical injury or illness) causing the dismemberment.
(C) Of substituting a specified indemnity upon the occurrence of a dismemberment for a benefit of the policy which would accrue before the time of dismemberment.
(9) If it contains a provision, other than as provided in Section 10369.3, reducing an original benefit more than 50 percent on account of age of the insured.
(i) The part or system of the human body principally subject to all those diseases.
(ii) The similarity in nature or cause of those diseases.
(iii) In case of diseases of an unusually serious nature and protracted course of treatment, the common characteristics of all those diseases with respect to severity of affliction and cost of treatment.
(13) If it fails to conform with a law of this state.
(c) The commissioner shall not approve a disability policy covering hospital, medical, or surgical expenses unless the commissioner finds that the application conforms to both of the following requirements:
(d) This section does not authorize the commissioner to establish or require a single or standard application form for application questions.
(e) The commissioner may, from time to time as conditions warrant, after notice and hearing, promulgate reasonable rules and regulations, and amendments and additions thereto, as are necessary or convenient, to establish, in advance of the submission of policies, the standard or standards conforming to subdivision (b), by which the commissioner shall disapprove or withdraw approval of a disability policy.
(1) In promulgating a rule or regulation the commissioner shall give consideration to the criteria established in this section and to the desirability of approving for use in policies in this state uniform provisions, nationwide or otherwise, and is hereby granted the authority to consult with insurance authorities of any other state and their representatives individually or by way of convention or committee, to seek agreement upon those provisions.
(2) A rule or regulation shall be promulgated in accordance with the procedure provided in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(f) (1) The commissioner may withdraw approval of filing of any policy or other document or matter required to be approved by the commissioner, or filed with the commissioner, by this chapter when the commissioner would be authorized to disapprove or refuse filing of the same if originally submitted at the time of the action of withdrawal.
(2) A withdrawal pursuant to paragraph (1) shall be in writing and shall specify reasons. An insurer adversely affected by a withdrawal may, within a period of 30 days following mailing or delivery of the writing containing the withdrawal, by written request secure a hearing to determine whether the withdrawal should be annulled, modified, or confirmed. Unless, at any time, it is mutually agreed to the contrary, a hearing shall be granted and commenced within 30 days following filing of the request and shall proceed with reasonable dispatch to determination. Unless the commissioner in writing in the withdrawal, or subsequent thereto, grants an extension, a withdrawal shall, in the absence of a hearing request, be effective, prospectively and not retroactively, on the 91st day following the mailing or delivery of the withdrawal, and, if request for the hearing is filed, on the 91st day following mailing or delivery of written notice of the commissioner’s determination.
(g) A proceeding under this section is not subject to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(h) (1) Except as provided in subdivision (k), an action taken by the commissioner under this section is subject to review by the courts of this state and proceedings on review shall be in accordance with the Code of Civil Procedure.
(2) Notwithstanding any other law, a petition for review may be filed at any time before the effective date of the action taken by the commissioner. No action of the commissioner shall become effective before the expiration of 20 days after written notice and a copy thereof are mailed or delivered to the person adversely affected, and an action so submitted for review shall not become effective for a further period of 15 days after the filing of the petition in court. The court may stay the effectiveness thereof for a longer period.
(i) This section shall be liberally construed to effectuate the purpose and intentions of this section, but shall not be construed to grant the commissioner power to fix or regulate rates for disability insurance or prescribe a standard form of disability policy, except that the commissioner shall prescribe a standard supplementary disclosure form for presentation with all disability insurance policies, pursuant to Section 10603.
(j) This section shall be effective on and after July 1, 1950, as to all policies thereafter submitted and on and after January 1, 1951, the commissioner may withdraw approval pursuant to subdivision (d) of a policy thereafter issued or delivered in this state irrespective of when its form may have been submitted or approved, and before those dates the law in effect on January 1, 1949, shall apply to those policies.
(k) A policy issued by an insurer to an insured on a form approved by the commissioner before July 1, 1950, and in accordance with the conditions, if any, contained in the approval, at a time when that approval is outstanding shall, as between the insurer and the insured, or a person claiming under the policy, be conclusively presumed to comply with, and conform to, this section.
SEC. 11.SEC. 46.
Section 12921.2 of the Insurance Code is amended to read:
All public records of the department and the commissioner subject to disclosure under Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code shall be available for inspection and copying pursuant to those provisions at the offices of the department in the San Francisco Bay area, in the City of Los Angeles, and in the City of Sacramento. Adequate copy facilities for this purpose shall be made available. Notwithstanding any other law, a person requesting copies of these records shall receive the copies from employees of the department and the fee charged for the copies shall not exceed the actual cost of producing the copies. Notwithstanding Section 6256 of the Government Code, a public record submitted to the department as computer data on an electronic medium shall, in addition to other formats, be made available to the public pursuant to this section through an electronic medium.
(E) A loan against the cash value or surrender value of an insurance policy or annuity, including excluding loans for premium payments.
SEC. 12.SEC. 48.