A crop of new insurance laws took effect Jan. 1 in California. The new laws are designed to protect seniors and encourage the use of technology to make insurance-based transactions faster and more efficient, according state insurance regulators.
Four laws took effect on New Year’s Day and three more insurance-related laws come into effect later this year. These laws are “crafted to offer more protections” to consumers, Insurance Commissioner Dave Jones said in a news release.
Laws taking effect New Year’s Day were Senate Bill 426, Assembly Bill 1131, Assembly Bill 387 and Assembly Bill 1515.
Senate Bill 426 requires the death benefit payable under annuities contracts issued to people 65 years old or older to be “at least equal to the annuity value or accumulations value without any surrender charges or penalties upon death,” according to the bill summary.
The new law protects seniors and their beneficiaries from financial losses when carriers apply surrender penalties to annuities paid as a death benefit, the California Department of Insurance said in its press release.
Assembly Bill 1131 allows anyone licensed by the California Insurance Department — carrier, agent or broker — to send life insurance records by electronic transmission so long as the state licensees meet certain requirements.
Agents and brokers also would be exempt from liability for any electronic procedural deficiencies, the bill summary states.
A third law, Assembly Bill 387, authorizes state insurance regulators to develop new, more streamlined guidelines for filing life and disability insurance forms.
The law also extends the amount of time the Insurance Department has to approve policy form changes — which could include premium rate changes — to 120 days from 30 days.
An omnibus insurance bill, Assembly Bill 1515, added several technical changes to the state’s insurance code.
One of the changes to the code restores interest payments applied to claim payments under nonhealth disability policies when the claim payments are made more than 30 days after the carrier receives a claim.
Most of the provisions of AB 1515 took effect Jan. 1, the California Insurance Department said.
Senate Bill 575, which takes effect July 1, requires long-term care carriers to provide annual notification of the availability of nonforfeiture benefits and contingent benefits.
Notification would include the dollar amount of the contingent benefit, and the name, address, and telephone number of the insurer for questions about the contingent benefit, according to the bill’s language.
Also pending is Senate Bill 696, which allows life insurance carriers to use principle-based reserving methods to value insurance contracts.
Principle-based reserving, compared with rules-based reserving, is seen as a more flexible and efficient way for insurance companies to reserve against their liabilities.
The bill’s passage into law is contingent on funding by the California Legislature.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2016 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.