SACRAMENTO, Calif., Sept. 18 -- The California Department of Insurance issued the following news release:
Insurance Commissioner Dave Jones today announced that Governor Jerry Brown has signed AB 1747, authored by Assembly Member Mike Feuer (D-Los Angeles). The bill was strongly supported by Commissioner Jones and the California Department of Insurance and provides important consumer safeguards for life insurance policy holders.
"I commend Assembly Member Mike Feuer for successfully getting this important legislation to the Governor and I am very pleased that the Governor has signed it," Commissioner Jones said. "This legislation will further protect California consumers and many seniors by ensuring that they are provided sufficient notice before their life insurance policy is cancelled."
Under existing law, individuals can easily lose the critical protection of life insurance if a single premium is accidentally missed, even if they have been paying premiums on time for many years. Furthermore, if an insured individual loses coverage and wants it reinstated, he or she may then have to undergo a new physical exam and be underwritten again, risking a significantly more expensive, possibly unaffordable premium if his or her health has changed in the years since purchasing the policy.
AB 1747 requires that a "pending lapse notice" be sent to the policy owner within 30-days of nonpayment, to provide a much-needed warning that the bill has not been paid. The new law will also require that insurers allow a policy owner to name one or more designees to receive a copy of the pending lapse notice, so that if the policy owner does not realize the bill has gone unpaid (or is unable to respond, perhaps due to hospitalization or incapacitation); a trusted relative or friend can do so.
AB 1747 will go into effect on January 1, 2013.
TNS 23SQ 120919-JF78-4033985 StaffFurigay