Bill Text: CA SB1405 | 2009-2010 | Regular Session | Chaptered

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Bill Title: Life insurance: premium refunds.

Spectrum: Slight Partisan Bill (Democrat 8-3)

Status: (Passed) 2010-08-23 - Chaptered by Secretary of State. Chapter 184, Statutes of 2010. [SB1405 Detail]

Download: California-2009-SB1405-Chaptered.html

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BILL NUMBER: SB 1405	CHAPTERED
	BILL TEXT

	CHAPTER  184
	FILED WITH SECRETARY OF STATE  AUGUST 23, 2010
	APPROVED BY GOVERNOR  AUGUST 23, 2010
	PASSED THE SENATE  AUGUST 9, 2010
	PASSED THE ASSEMBLY  AUGUST 2, 2010
	AMENDED IN ASSEMBLY  JUNE 29, 2010

INTRODUCED BY   Committee on Banking, Finance and Insurance (Senators
Calderon (Chair), Cogdill, Correa, Cox, Florez, Kehoe, Liu,
Lowenthal, Padilla, Price, and Runner)

                        FEBRUARY 19, 2010

   An act to amend Section 10127.7 of the Insurance Code, relating to
insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1405, Committee on Banking, Finance and Insurance. Life
insurance: premium refunds.
   Existing law requires that life insurance policies with a face
value of less than $10,000, issued after July 1, 1974, 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. If the insured cancels the policy within the given time
period, all premiums paid and any policy fee paid for the policy are
required to be refunded to the owner. Existing law provides that
these provisions apply to all policies issued, amended, or delivered
on or after January 1, 1981, as specified.
   This bill would require that the refund be given within 30 days
from the date that the insurer is notified that the insured has
canceled the policy. The bill would provide that the notice, return,
and refund requirements apply to all policies issued, amended, or
delivered on or after January 1, 2011, and would require that all
policies in effect on January 1, 2011, be construed to be in
compliance with those provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10127.7 of the Insurance Code is amended to
read:
   10127.7.  Every policy of individual life insurance with a face
value of less than ten thousand dollars ($10,000) which is delivered
or issued for delivery in this state on and after July 1, 1974, 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 10 days nor more than 30 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 within 30 days from the date that the insurer
is notified that the insured has canceled the policy.
   This section applies to all policies issued, amended, or delivered
in this state on or after January 1, 2011, and applies to any
renewal thereof. All policies subject to this section that are in
effect on January 1, 2011, shall be construed to be in compliance
with this section, and any provision in such 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.