summary
Introduced
In Committee
Crossed Over
Passed
Dead
Signed/Enacted/Adopted
07/26/2011
07/26/2011
Introduced Session
2011-2012 Regular Session
Bill Summary
SB 713, Calderon. Insurance: proceeds: disclosure. Existing law requires insurers to fulfill certain requirements with regard to life insurance policies. This bill, the Life Insurance Proceeds Disclosure Act of 2011, would require insurers to provide written disclosures to life insurance beneficiaries, as specified, at the time a claim is made and before a retained asset account, as defined, is selected or established as the benefit payment. The bill would require an insurer that settles life insurance benefits through a retained asset account to provide the beneficiary with a supplemental contract that clearly discloses the rights of the beneficiary and the obligations of the insurer under the supplemental contract. The bill would also require, if the life insurance benefits are placed in a retained asset account, the insurer to send the beneficiary at least one statement per quarter, and a statement for any month in which there has been any account activity other than the crediting of interest. The bill would provide that an insurer that fails to conform to the requirements of the above provisions would be subject to provisions of existing law that provide for the imposition of a civil penalty against any person who engages in any unfair method of competition or any unfair or deceptive act or practice in the business of insurance, as provided. The bill would become operative only if SB 599 of the 2011-12 Regular Session is enacted and becomes effective.
AI Summary
This bill, known as the Life Insurance Proceeds Disclosure Act of 2011, aims to ensure beneficiaries of life insurance policies receive clear information about their payout options, particularly when those options involve a "retained asset account," which is a special account where the insurer deposits the death benefit and the beneficiary can access it with check-writing privileges. The bill mandates that insurers provide written disclosures to beneficiaries at the time a claim is made, detailing all available settlement options, including retained asset accounts, and how to get more information. If a retained asset account is chosen, the insurer must provide a supplemental contract clearly outlining the beneficiary's rights and the insurer's obligations, and send quarterly statements, or more frequent statements if there's account activity beyond interest crediting. Failure to comply with these disclosure requirements could result in civil penalties for unfair insurance practices, and the bill will only become law if another specific bill, SB 599, is also enacted.
Committee Categories
Business and Industry, Justice
Sponsors (7)
Lou Correa (D)*,
Alan Lowenthal (D)*,
Joel Anderson (R),
Ronald Calderon (D),
Ellen Corbett (D),
Ted Gaines (R),
Mark Wyland (R),
Last Action
Chaptered by Secretary of State. Chapter 130, Statutes of 2011. (on 07/26/2011)
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