California Assembly Bill AB2453

California 2019-2020 Regular Session

• Introduced: 2/19/20
• Refer: 3/2/20

Caption

Long-term care insurance and accelerated death benefits.

Impact

If enacted, AB 2453 will enhance regulatory oversight concerning how life insurance policies that offer accelerated benefits for long-term care are marketed. This change mandates insurers to ensure that agents are well-trained and that they adequately inform potential policyholders about the implications of their decisions. This requirement could lead to improved consumer protection by ensuring that applicants are better informed about their insurance choices and the suitability of these choices in relation to their financial circumstances.

Summary

Assembly Bill 2453, introduced by Assembly Member Nazarian, aims to amend the Insurance Code concerning long-term care insurance and the provision of accelerated death benefits. This bill is set to remove the existing exclusion of life insurance policies that accelerate benefits for long-term care from certain regulatory requirements. It specifically requires that insurers develop and use suitability standards that consider not just the financial capacity of applicants but also their goals and needs regarding both life and long-term care insurance. Furthermore, a written summary of these suitability comparisons must be provided to applicants at the time of application.

Contention

Some concerns around the bill involve the level of documentation and procedural requirements imposed on insurers and agents. While supporters argue that these changes will ensure greater transparency and protect consumers from inappropriate sales practices, opponents may view this as an additional bureaucratic burden on insurance agents and companies. The need for detailed reporting and enhanced training requirements may raise concerns about operational overhead and could potentially limit access to insurance products for some consumers.