Bill Text: CA SB397 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Life insurance.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-01-19 - Stricken from Senate file. [SB397 Detail]

Download: California-2009-SB397-Amended.html

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BILL NUMBER: SB 397	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 2, 2009

INTRODUCED BY   Senator Calderon

                        FEBRUARY 26, 2009

    An act to amend Section 10127.7 of, and to add Section
789.15 to,   An act to amend Sections 789.10 and 10127.7
of  the Insurance Code, relating to life insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 397, as amended, Calderon. Life insurance.
   Existing law regulates the sale of life insurance  , in
particular sales  to seniors, including annuities, as
specified.  Existing law requires a person who meets with a
senior in the senior's home regarding the sale of life insurance to
deliver a notice in writing to the senior no less than 24 hours prior
to that individual's meeting, and to abide by other restrictions
regarding contacting the senior in the senior's home.  
   This bill would provide that if a senior makes a written or
telephonic request for a meeting the same day to discuss the purchase
of specific life insurance having an initial face amount of $15,000
or less that is designated by the purchaser for payment of funeral
and burial expenses, a notice, as specified, shall be delivered to
the senior prior to the start of the meeting.  
   The bill would also provide that the sale of a burial or funeral
policy shall not create an existing insurance relationship for the
purposes of the required delivery of a specified written notice to
seniors 24 hours before meeting in their home to sell other life
insurance.  
   This bill would specify that the above provisions do not apply to
the sale of life insurance designated by the purchaser as payment for
funeral and burial expenses if the life insurance policy has an
initial face amount of $15,000 or less and provides a "free look"
period in which the purchaser has 60 days to cancel the policy and be
refunded payments made. 
   Existing law provides that life insurance policies with a face
value of less than $10,000, issued after July 1, 1974, shall contain
a notice permitting the return of the policy within a period of time
designated in the notice, which may not be less than 10 or more than
30 days.
   This bill would provide that a life insurance policy with a face
value of $15,000 or less, issued after January 1, 2010, shall contain
a notice permitting the return of the policy within  45
  60  days.
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 789.15 is added to the
Insurance Code, to read:
   789.15.  If a senior makes a written or telephonic request for a
meeting the same day to discuss the purchase of specific life
insurance having an initial face amount of fifteen thousand dollars
($15,000) or less that is designated by the purchaser for payment of
funeral and burial expenses, a notice as required by subdivision (b)
of Section 789.10 shall be delivered to the senior prior to the start
of the meeting. In addition to the requirements of Section 789.10,
that notice shall contain the following information in at least
14-point type, and be initialed by the senior:
   "You have the right to cancel and return a policy or certificate
within 45 days of receipt for a full refund."
   The notice must be read and signed by the senior and submitted
with any application if the senior purchases a policy. The agent or
insurance representative shall not be permitted to sell any other
lines of insurance that are not policies for funeral or burial
expenses. A sale of a burial or funeral policy under this section
shall not create an existing insurance relationship for purposes of
Section 789.10. 
   SECTION 1.    Section 789.10 of the  
Insurance Code   is amended to read: 
   789.10.  (a) This section applies to the sale, offering for sale,
or generation of leads for the sale of life insurance, including
annuities, to senior insureds or prospective insureds by any person.
   (b) Any person who meets with a senior in the senior's home is
required to deliver a notice in writing to the senior no less than 24
hours prior to that individual's initial meeting in the senior's
home. If the senior has an existing insurance relationship with an
agent and requests a meeting with the agent in the senior's home the
same day, a notice shall be delivered to the senior prior to the
meeting. The notice shall be in substantially the following form,
with the appropriate information inserted, in 14-point type:
   "(1) During this visit or a followup visit, you will be given a
sales presentation on the following [indicate all that apply]:
   ( ) Life insurance, including annuities
   ( ) Other insurance products [specify]: _________________.
   (2) You have the right to have other persons present at the
meeting, including family members, financial advisors or attorneys.
   (3) You have the right to end the meeting at any time.
   (4) You have the right to contact the Department of Insurance for
information, or to file a complaint. [The notice shall include the
consumer assistance telephone numbers at the department]
   (5) The following individuals will be coming to your home: [list
all attendees, and insurance license information, if applicable]"
   (c) Upon contacting the senior in the senior's home, the person
shall, before making any statement other than a greeting, or asking
the senior any other questions, state that the purpose of the contact
is to talk about insurance, or to gather information for a followup
visit to sell insurance, if that is the case, and state all of the
following information:
   (1) The name and titles of all persons arriving at the senior's
home.
   (2) The name of the insurer represented by the person, if known.
   (d) Each person attending a meeting with a senior shall provide
the senior with a business card or other written identification
stating the person's name, business address, telephone number, and
any insurance license number.
   (e) The persons attending a meeting with a senior shall end all
discussions and leave the home of the senior immediately after being
asked to leave by the senior.
   (f) A person may not solicit a sale or order for the sale of an
annuity or life insurance policy at the residence of a senior, in
person or by telephone, by using any plan, scheme, or ruse that
misrepresents the true status or mission of the contact. 
   (g) This section shall not apply to the sale of life insurance
designated by the purchaser as payment for funeral and burial
expenses if the life insurance policy meets both of the following:
 
   (1) Has an initial face amount of fifteen thousand dollars
($15,000) or less.  
   (i) Provides a "free look" period in which the purchaser has 60
days to cancel the policy and be refunded payments made to the
insurer prior to the cancellation of the policy. 
  SEC. 2.  Section 10127.7 of the Insurance Code is amended to read:
   10127.7.  Every policy of individual life insurance with an
initial face value of fifteen thousand dollars ($15,000) or less that
is delivered or issued for delivery in this state on and after
January 1, 2010, shall have printed thereon or attached thereto a
notice stating that, after receipt of the policy by the owner, the
policy may be returned by the owner for cancellation by delivering it
or mailing it to the insurer or to the agent through whom it was
purchased. The period of time set forth by the insurer for return of
the policy by the insured shall be clearly stated on the notice and
this period shall be not less than  45   60
 days. The insured may return the policy to the insurer at any
time during the period specified in the notice. This delivery or
mailing of the policy by the owner shall void the policy from the
beginning, and the parties shall be in the same position as if no
policy or contract had been issued. All premiums paid and any policy
fee paid for the policy shall be refunded to the owner.
   This section applies to all policies issued on or after January 1,
2010, and applies to any renewal thereof. All policies subject to
this section which are in effect on January 1, 2010, shall be
construed to be in compliance with this section, and any provision in
a policy that is in conflict with this section shall be of no force
or effect.
   This section does not apply to individual life insurance policies
issued in connection with a credit transaction or issued under a
contractual policy change or conversion privilege provision contained
in a policy.