Amended IN Senate April 27, 2022 Amended IN Senate April 18, 2022 Amended IN Senate March 09, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 927Introduced by Senator Archuleta(Principal coauthor: Assembly Member Levine)February 07, 2022 An act to amend amend, repeal, and add Section 10127.9 of, and to add Section 1749.81 to, and to add Article 2.5 (commencing with Section 10470) to Chapter 5 of Part 2 of Division 2 of, the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTSB 927, as amended, Archuleta. Life insurance.Existing law generally regulates classes of insurance, including life insurance. Existing law requires a life insurance policy illustration, which is a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years, to include specified information and conform to specified requirements to ensure an illustration is understandable and does not mislead consumers.Existing law requires a life insurance policy to include specified disclosures, including requiring an individual life insurance policy or annuity contract that is initially delivered or issued for delivery on and after January 1, 1990, to include a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation, as specified.This bill would entitle a policy owner, in deciding whether to cancel a policy, to review any illustration, policy, or other disclosure or information of any kind.This bill would authorize a producer to receive compensation or other incentives if the amount does not influence was not material to the recommendation of a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity. The bill would require a life insurance agent to make specified disclosures to a prospective policyholder, including if the agent receives monetary or nonmonetary compensation that is contingent on selling a life insurance policy or annuity or if the insurer or agent who makes a statement about the potential tax advantages of a life insurance policy. The bill would require an illustration or policy to disclose fees and charges, and surrender fees and charges in specified forms. The bill would require a prospective policyholder to sign a copy of those disclosures, and would require the insurer to retain copies of the signed disclosures, as specified.The bill would require a life agent who sells life insurance, other than term life with no cash value, to satisfactorily complete 4 hours of training prior to soliciting individual consumers in order to sell nonterm life insurance. The bill would require a life agent who sells variable life insurance to satisfactorily complete 2 hours of training prior to each license renewal. The bill would require the training to be approved by the Insurance Commissioner and to consist of topics related to, among other things, regulations related to variable life insurance.The bill would become operative on January 1, 2024.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1.Section 10127.9 of the Insurance Code is amended to read:10127.9.(a)(1)An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2)The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b)This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c)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.(d)In deciding whether to cancel a policy under this section or under Section 10129.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e)General references to policy or policies in this section refer to both life insurance policies and annuity contracts.SECTION 1. Section 1749.81 is added to the Insurance Code, to read:1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.SEC. 2. Section 10127.9 of the Insurance Code is amended to read:10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.SEC. 3. Section 10127.9 is added to the Insurance Code, to read:10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.SEC. 2.SEC. 4. Article 2.5 (commencing with Section 10470) is added to Chapter 5 of Part 2 of Division 2 of the Insurance Code, to read: Article 2.5. Transparency and Accountability in Life Insurance Transactions10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.10476. This article shall become operative on January 1, 2024.
Amended IN Senate April 27, 2022 Amended IN Senate April 18, 2022 Amended IN Senate March 09, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Senate Bill No. 927Introduced by Senator Archuleta(Principal coauthor: Assembly Member Levine)February 07, 2022 An act to amend amend, repeal, and add Section 10127.9 of, and to add Section 1749.81 to, and to add Article 2.5 (commencing with Section 10470) to Chapter 5 of Part 2 of Division 2 of, the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTSB 927, as amended, Archuleta. Life insurance.Existing law generally regulates classes of insurance, including life insurance. Existing law requires a life insurance policy illustration, which is a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years, to include specified information and conform to specified requirements to ensure an illustration is understandable and does not mislead consumers.Existing law requires a life insurance policy to include specified disclosures, including requiring an individual life insurance policy or annuity contract that is initially delivered or issued for delivery on and after January 1, 1990, to include a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation, as specified.This bill would entitle a policy owner, in deciding whether to cancel a policy, to review any illustration, policy, or other disclosure or information of any kind.This bill would authorize a producer to receive compensation or other incentives if the amount does not influence was not material to the recommendation of a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity. The bill would require a life insurance agent to make specified disclosures to a prospective policyholder, including if the agent receives monetary or nonmonetary compensation that is contingent on selling a life insurance policy or annuity or if the insurer or agent who makes a statement about the potential tax advantages of a life insurance policy. The bill would require an illustration or policy to disclose fees and charges, and surrender fees and charges in specified forms. The bill would require a prospective policyholder to sign a copy of those disclosures, and would require the insurer to retain copies of the signed disclosures, as specified.The bill would require a life agent who sells life insurance, other than term life with no cash value, to satisfactorily complete 4 hours of training prior to soliciting individual consumers in order to sell nonterm life insurance. The bill would require a life agent who sells variable life insurance to satisfactorily complete 2 hours of training prior to each license renewal. The bill would require the training to be approved by the Insurance Commissioner and to consist of topics related to, among other things, regulations related to variable life insurance.The bill would become operative on January 1, 2024.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Amended IN Senate April 27, 2022 Amended IN Senate April 18, 2022 Amended IN Senate March 09, 2022
Amended IN Senate April 27, 2022
Amended IN Senate April 18, 2022
Amended IN Senate March 09, 2022
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Senate Bill
No. 927
Introduced by Senator Archuleta(Principal coauthor: Assembly Member Levine)February 07, 2022
Introduced by Senator Archuleta(Principal coauthor: Assembly Member Levine)
February 07, 2022
An act to amend amend, repeal, and add Section 10127.9 of, and to add Section 1749.81 to, and to add Article 2.5 (commencing with Section 10470) to Chapter 5 of Part 2 of Division 2 of, the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 927, as amended, Archuleta. Life insurance.
Existing law generally regulates classes of insurance, including life insurance. Existing law requires a life insurance policy illustration, which is a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years, to include specified information and conform to specified requirements to ensure an illustration is understandable and does not mislead consumers.Existing law requires a life insurance policy to include specified disclosures, including requiring an individual life insurance policy or annuity contract that is initially delivered or issued for delivery on and after January 1, 1990, to include a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation, as specified.This bill would entitle a policy owner, in deciding whether to cancel a policy, to review any illustration, policy, or other disclosure or information of any kind.This bill would authorize a producer to receive compensation or other incentives if the amount does not influence was not material to the recommendation of a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity. The bill would require a life insurance agent to make specified disclosures to a prospective policyholder, including if the agent receives monetary or nonmonetary compensation that is contingent on selling a life insurance policy or annuity or if the insurer or agent who makes a statement about the potential tax advantages of a life insurance policy. The bill would require an illustration or policy to disclose fees and charges, and surrender fees and charges in specified forms. The bill would require a prospective policyholder to sign a copy of those disclosures, and would require the insurer to retain copies of the signed disclosures, as specified.The bill would require a life agent who sells life insurance, other than term life with no cash value, to satisfactorily complete 4 hours of training prior to soliciting individual consumers in order to sell nonterm life insurance. The bill would require a life agent who sells variable life insurance to satisfactorily complete 2 hours of training prior to each license renewal. The bill would require the training to be approved by the Insurance Commissioner and to consist of topics related to, among other things, regulations related to variable life insurance.The bill would become operative on January 1, 2024.
Existing law generally regulates classes of insurance, including life insurance. Existing law requires a life insurance policy illustration, which is a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years, to include specified information and conform to specified requirements to ensure an illustration is understandable and does not mislead consumers.
Existing law requires a life insurance policy to include specified disclosures, including requiring an individual life insurance policy or annuity contract that is initially delivered or issued for delivery on and after January 1, 1990, to include a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation, as specified.
This bill would entitle a policy owner, in deciding whether to cancel a policy, to review any illustration, policy, or other disclosure or information of any kind.
This bill would authorize a producer to receive compensation or other incentives if the amount does not influence was not material to the recommendation of a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity. The bill would require a life insurance agent to make specified disclosures to a prospective policyholder, including if the agent receives monetary or nonmonetary compensation that is contingent on selling a life insurance policy or annuity or if the insurer or agent who makes a statement about the potential tax advantages of a life insurance policy. The bill would require an illustration or policy to disclose fees and charges, and surrender fees and charges in specified forms. The bill would require a prospective policyholder to sign a copy of those disclosures, and would require the insurer to retain copies of the signed disclosures, as specified.
The bill would require a life agent who sells life insurance, other than term life with no cash value, to satisfactorily complete 4 hours of training prior to soliciting individual consumers in order to sell nonterm life insurance. The bill would require a life agent who sells variable life insurance to satisfactorily complete 2 hours of training prior to each license renewal. The bill would require the training to be approved by the Insurance Commissioner and to consist of topics related to, among other things, regulations related to variable life insurance.
The bill would become operative on January 1, 2024.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1.Section 10127.9 of the Insurance Code is amended to read:10127.9.(a)(1)An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2)The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b)This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c)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.(d)In deciding whether to cancel a policy under this section or under Section 10129.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e)General references to policy or policies in this section refer to both life insurance policies and annuity contracts.SECTION 1. Section 1749.81 is added to the Insurance Code, to read:1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.SEC. 2. Section 10127.9 of the Insurance Code is amended to read:10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.SEC. 3. Section 10127.9 is added to the Insurance Code, to read:10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.SEC. 2.SEC. 4. Article 2.5 (commencing with Section 10470) is added to Chapter 5 of Part 2 of Division 2 of the Insurance Code, to read: Article 2.5. Transparency and Accountability in Life Insurance Transactions10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.10476. This article shall become operative on January 1, 2024.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
(a)(1)An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.
(2)The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.
(b)This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.
(c)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.
(d)In deciding whether to cancel a policy under this section or under Section 10129.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.
(e)General references to policy or policies in this section refer to both life insurance policies and annuity contracts.
SECTION 1. Section 1749.81 is added to the Insurance Code, to read:1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.
SECTION 1. Section 1749.81 is added to the Insurance Code, to read:
### SECTION 1.
1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.
1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.
1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:(1) The insurer does not initiate telephone contact with insureds or prospective insureds.(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.(e) This section shall become operative on January 1, 2024.
1749.81. (a) A life agent who sells life insurance other than term life with no cash value shall satisfactorily complete four hours of training prior to soliciting individual consumers in order to sell nonterm life insurance.
(b) A life agent who sells variable life insurance shall satisfactorily complete two hours of training prior to each license renewal. Completion of the four-hour annuity training required by Section 1749.8 does not satisfy the training required by this section. For resident licensees, this requirement shall count toward the licensees continuing education requirement but may still result in completing more than the minimum number of continuing education hours set forth in this section.
(c) The training required by this section shall be approved by the commissioner and shall consist of topics related to variable life insurance, and California law, regulations, and requirements related to variable life insurance, prohibited sales practices, and unfair trade practices. Subject matter determined by the commissioner to be primarily intended to promote the sale or marketing of variable life insurance shall not qualify for credit toward the training requirement. Any course or seminar that is disapproved under the provisions of this section shall be presumed invalid for credit toward the training requirement of this section unless it is approved in writing by the commissioner.
(d) The training requirements set forth in this section shall not apply to nonresident agents representing an insurer that is a direct response provider. For purposes of this section, direct response provider means an insurer that meets each of the following criteria:
(1) The insurer does not initiate telephone contact with insureds or prospective insureds.
(2) Agents of the insurer speak with insureds or prospective insureds only by telephone and at the request of the insureds or prospective insureds.
(3) Agents of the insurer are assigned to speak with insureds or prospective insureds on a random basis, when contacted.
(4) Agents of the insurer are salaried and do not receive commissions for sales or referrals.
(e) This section shall become operative on January 1, 2024.
SEC. 2. Section 10127.9 of the Insurance Code is amended to read:10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.
SEC. 2. Section 10127.9 of the Insurance Code is amended to read:
### SEC. 2.
10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.
10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.
10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.(c) 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.(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.(e) This section shall become operative on July 1, 2015.(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.
10127.9. (a) (1) Every individual life insurance policy and every individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 10 days nor more than 30 days.
(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.
(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section which are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy which is in conflict with this section shall be of no force or effect.
(c) 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.
(d) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.
(e) This section shall become operative on July 1, 2015.
(f) This section shall remain in effect only until January 1, 2024, and as of that date is repealed.
SEC. 3. Section 10127.9 is added to the Insurance Code, to read:10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.
SEC. 3. Section 10127.9 is added to the Insurance Code, to read:
### SEC. 3.
10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.
10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.
10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.(c) 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.(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts. (f) This section shall become operative on January 1, 2024.
10127.9. (a) (1) An individual life insurance policy or individual annuity contract that is initially delivered or issued for delivery in this state on and after January 1, 1990, shall have printed on the front of the policy jacket or on the cover page a notice stating that, after receipt of the policy by the owner, the policy may be returned by the owner for cancellation by mail or other delivery method 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 owner shall be clearly stated and this period shall be not less than 30 days.
(2) The owner may return the policy to the insurer by mail or other delivery method at any time during the period specified in the notice. In the case of individual nonvariable life insurance policies and individual nonvariable annuity contracts, including modified guaranteed contracts, by delivering or mailing the policy pursuant to this section during the cancellation period, the owner shall void the policy from the beginning, and the parties shall be in the same position as if no policy had been issued. All premiums paid and any policy fee paid for the policy shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy. In the case of individual variable annuity contracts and individual variable life insurance policies, return of the policy during the cancellation period shall entitle the owner to a refund of the account value and any policy fee paid for the policy. The account value and policy fee shall be refunded by the insurer to the owner within 30 days from the date that the insurer is notified that the owner has canceled the policy.
(b) This section applies to all individual policies issued or delivered in this state on or after January 1, 1990, but does not apply to any policy subject to Section 10127.7. All policies subject to this section that are in effect on January 1, 1990, shall be construed to be in compliance with this section, and any provision in any policy that is in conflict with this section shall be of no force or effect.
(c) 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.
(d) In deciding whether to cancel a policy under this section or under Section 10127.10, the policy owner is entitled to review any illustration, policy, or other disclosure or information of any kind. In deciding whether to cancel the policy, the extent to which a policy owner may rely on information received by the policy owner is unaffected by whether the information was received before or after the policy was delivered to the policy owner.
(e) General references to policy or policies in this section refer to both life insurance policies and annuity contracts.
(f) This section shall become operative on January 1, 2024.
SEC. 2.SEC. 4. Article 2.5 (commencing with Section 10470) is added to Chapter 5 of Part 2 of Division 2 of the Insurance Code, to read: Article 2.5. Transparency and Accountability in Life Insurance Transactions10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.10476. This article shall become operative on January 1, 2024.
SEC. 2.SEC. 4. Article 2.5 (commencing with Section 10470) is added to Chapter 5 of Part 2 of Division 2 of the Insurance Code, to read:
### SEC. 2.SEC. 4.
Article 2.5. Transparency and Accountability in Life Insurance Transactions10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.10476. This article shall become operative on January 1, 2024.
Article 2.5. Transparency and Accountability in Life Insurance Transactions10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.10476. This article shall become operative on January 1, 2024.
Article 2.5. Transparency and Accountability in Life Insurance Transactions
Article 2.5. Transparency and Accountability in Life Insurance Transactions
10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.
10470. In recommending a sales transaction of a life insurance policy, other than a policy solely providing term life with no cash value, or an annuity to a consumer, the producer may receive compensation or other incentives authorized by law and regulation if the amount of the compensation or the receipt of an incentive does not influence was not material to the recommendation.
10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.
10471. (a) A life insurance agent shall provide the following separate and prominent disclosure to a prospective policyholder at or before the time the agent first engages in any substantive discussion of the potential purchase of a life insurance policy, other than a life insurance policy providing solely term life with no cash value, or an annuity:
Who I Work For: I am an agent for one or more insurance companies whose products I sell. I may receive monetary or nonmonetary compensation for the sale of a life insurance policy or annuity, and that compensation may be based on the amount of the premiums for the policy or annuity purchased. If you have questions about the compensation I may receive for this transaction, please ask me. You are free to consult with an independent insurance professional, tax advisor, or attorney, about any recommendation I may make to you.
(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy or annuity is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy or annuity is no longer in force.
10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:(1) Narrative form, with a description of each fee or charge and its method of calculation.(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.
10472. (a) An illustration, as defined in Section 10509.953, shall disclose all fees or charges applicable to the policy in both of the following forms:
(1) Narrative form, with a description of each fee or charge and its method of calculation.
(2) Numerical form in a policy fees and charges report, which sets forth the amount of each fee or charge that would be paid in the scenario or scenarios depicted in any presentation of nonguaranteed values in an illustration. The policy fees and charges report shall include all of the following:
(A) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.
(B) The fees or charges that would be paid assuming current levels of fees and charges according to the insurers illustrated scale, as defined in Section 10509.953, and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.
(C) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and the nonguaranteed crediting rates underlying any nonguaranteed values shown in the illustration.
(D) The fees or charges that would be paid assuming guaranteed maximum levels of fees and charges and an alternate crediting rate that reflects the midpoint between the guaranteed minimum crediting rate and the nonguaranteed crediting rate underlying any nonguaranteed values shown in the illustration.
(b) The illustration shall include the following disclosure immediately above the signature line for the prospective policyholder: Any fee not labeled as guaranteed may be increased by the insurer at any time.
(c) If a prospective policyholder applies for a policy, the prospective policyholder shall sign a copy, which may be electronic, of the policy fee and charges report for any illustration that is of the policy as applied for or of the policy as issued, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed policy fee and charges report until three years after the policy is no longer in force.
10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.
10473. (a) If an insurer or agent makes a statement about the potential tax advantages of a life insurance policy, the insurer or agent shall, the first time that statement is made, provide the prospective policyholder with the following disclosure:
Disclosure Regarding the Potential Tax Benefits of Life Insurance: In most circumstances, a policy of life insurance cannot deliver any tax benefits unless the policy is kept in force, or exchanged for an annuity or another policy that is kept in force, until the death of the insured, which may be many years in the future. This is an important consideration because cost of insurance or other charges or fees may increase substantially as the insured ages. Ask your agent or insurer about the extent to which fees or charges may increase over time. Neither the insurer nor the agent is authorized to provide tax advice; you should consult a tax adviser if potential tax advantages are an important reason you are considering buying the policy.
(b) A prospective policyholder shall sign a copy, which may be electronic, of the disclosure required by subdivision (a), and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure until three years after the policy is no longer in force.
(c) The disclosure required by this section may be provided in one document with the disclosure required by Section 10471.
10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.(d) This section does not apply to nonguaranteed dividends.
10474. If a life insurance policy provides for crediting the account value of the policy in a manner that does not prorate that credit to the date of termination of the policy, all of the following shall apply:
(a) An illustration of the policy shall show all surrender fees and charges applicable to the policy and shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result, separate from any surrender fees and charges, in forfeiture of crediting time.
(b) If the policy offers the policyholder any options that affect the frequency of crediting, including a choice between indexed strategies of different durations, any discussion of those options in an illustration of the policy, or in any document by which the policyholder makes an election among indexed strategies of different durations, shall include the word WARNING and an explanation, in a manner that is understandable to a reasonable consumer, that selecting an option with less frequent crediting would result in a larger forfeiture of crediting time upon surrender or other termination. The prospective policyholder shall sign a copy, which may be electronic, of the disclosure, and a signed copy shall be provided to the prospective policyholder. If a policy is issued, the insurer shall retain a copy of the signed disclosure as part of the illustration retained pursuant to Section 10509.958.
(c) A description of surrender fees and charges contained in the policy shall show all surrender fees and charges and any surrender-related loss of potential unearned credits that are not prorated. The description shall explain, in a manner that is understandable to a reasonable consumer, how credits to the account value of the policy are provided and that surrendering the policy between dates on which credits are provided will result in forfeiture of crediting time. The description shall also include the following statement:
THIS POLICY DOES NOT PRORATE ACCOUNT CREDITING TO THE DATE OF SURRENDER. If you are considering surrendering your policy, you may be better off waiting until the next crediting date before you surrender your policy. Our customer service representatives can tell you when the next crediting date will be and give you an estimate of (1) what policy credits would be applied if todays crediting result were to remain unchanged until surrender; and (2) what policy charges would be applied if you wait until the next crediting date to surrender your policy.
(d) This section does not apply to nonguaranteed dividends.
10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.
10475. If a life insurance policy or illustration references a guaranteed minimum interest rate or other guaranteed crediting rate that is determined on any basis other than annual, including a cumulative guarantee that runs from issuance until termination of the policy, or any guarantee that is determined retrospectively over more than one year, the description of the nonannual guarantee shall state: THIS GUARANTEE IS NOT AN ANNUAL GUARANTEE. The policy or illustration shall also include a numerical example by which a reasonable consumer would understand how the calculation of the guarantee offered by the policy differs from the calculation of an annual guarantee. An illustration that shows policy values for any indexed strategy using a crediting rate calculated by back casting shall also disclose the percentage of interest or other credits that the guarantee would have provided had it been in effect during the period used to generate a back-casted crediting rate for nonguaranteed values.
10476. This article shall become operative on January 1, 2024.
10476. This article shall become operative on January 1, 2024.