AB 1131: Insurance: electronic transmission.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-08
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified. The bill would exempt an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if the insurance agent or broker meets various requirements, as specified.
This bill would make conforming changes.
This bill would incorporate changes to Section 1633.3 of the Civil Code proposed by both this bill and AB 1097, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified. The bill would exempt an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if the insurance agent or broker meets various requirements, as specified.
This bill would make conforming changes.
This bill would incorporate changes to Section 1633.3 of the Civil Code proposed by both this bill and AB 1097, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified. The bill would exempt an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if the insurance agent or broker meets various requirements, as specified.
This bill would make conforming changes.
This bill would incorporate changes to Section 1633.3 of the Civil Code proposed by both this bill and AB 1097, which would become operative only if both bills are enacted and become effective on or before January 1, 2016, and this bill is chaptered last.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified. The bill would exempt an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if insurance agent or broker meets various requirements, as specified.
This bill would make conforming changes.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified.
This bill would make conforming changes.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified.
This bill would make conforming changes.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would would, for life insurance records, authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements. The bill would also require the commissioner to submit a report, as specified.
This bill would make conforming changes.
Existing law generally requires that any required notice related to insurance transactions be made by mail. Existing law authorizes an insurer, under specified conditions, to provide by electronic transmission the required offer of renewal for automobile insurance, the required offer of renewal or conditional renewal for property insurance, the required offer of coverage or renewal or any disclosure required regarding earthquake insurance, and the offer of renewal for a workers compensation policy.
Existing law also generally requires that, a record, signature, or contract may not be denied legal effect or enforceability because it is in electronic form. Existing law exempts from this requirement disability insurance and life insurance policies and certificates offered for sale to individuals 65 years of age or older, notice of an increase in premiums on an individual life insurance policy, individual life insurance policies with a face value of less than $10,000, a policy of individual life insurance that is initially delivered or issued for delivery in the state on and after January 1, 1990, applications for life insurance or annuity, and a policy replacement notice.
This bill would authorize additional persons to send records by electronic transmission by providing that an insurer, agent, broker, or any other person licensed by the Department of Insurance may send electronic records. This bill would expand the scope of electronic notice provisions by allowing the above licensees to send any written record by electronic transmission if not specifically excluded and if the licensee meets specified requirements.
This bill would make conforming changes.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 1.5.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.5.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2019.
(i)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 3.5.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(3)Notwithstanding subdivision (l) of Section 1633.2 of the Civil Code, for purposes of this section, person includes, but is not limited to, the policy owner, policyholder, applicant, insured, or assignee or designee of an insured.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented shall be set forth on that record.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by first class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Sections 1633.15 and 1633.16 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7) and complies with the other provisions in this section.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic signature shall not be held liable for any deficiency in the electronic procedures agreed to by the parties under that contract if all of the following are met:
(1)The insurance agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
(2)The insurance agent or broker was not involved in the development or establishment of the electronic procedures.
(3)The insurance agent or broker did not deviate from the electronic procedures.
(d)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(e)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(f)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(g)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 5.Sections 1.5, 2.5, and 3.5 of this bill incorporate statutory changes to Section 1633.3 of the Civil Code proposed by both this bill and Assembly Bill 1097. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends or adds Section 1633.3 of the Civil Code, and (3) this bill is enacted after Assembly Bill 1097, in which case Sections 1, 2, and 3 of this bill shall not become operative.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 1.5.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.5.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2019.
(i)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 3.5.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(3)Notwithstanding subdivision (l) of Section 1633.2 of the Civil Code, for purposes of this section, person includes, but is not limited to, the policy owner, policyholder, applicant, insured, or assignee or designee of an insured.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented shall be set forth on that record.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by first class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Sections 1633.15 and 1633.16 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7) and complies with the other provisions in this section.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic signature shall not be held liable for any deficiency in the electronic procedures agreed to by the parties under that contract if all of the following are met:
(1)The insurance agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
(2)The insurance agent or broker was not involved in the development or establishment of the electronic procedures.
(3)The insurance agent or broker did not deviate from the electronic procedures.
(d)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(e)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(f)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(g)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 5.Sections 1.5, 2.5, and 3.5 of this bill incorporate statutory changes to Section 1633.3 of the Civil Code proposed by both this bill and Assembly Bill 1097. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends or adds Section 1633.3 of the Civil Code, and (3) this bill is enacted after Assembly Bill 1097, in which case Sections 1, 2, and 3 of this bill shall not become operative.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 1.5.Section 1633.3 of the Civil Code, as amended by Section 3 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786, 10113.7, 10127.7, 10127.9, 10127.10, 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(g)
(h)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.5.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(g)
(h)This section shall become operative on January 1, 2019.
(i)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.SEC. 3.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 3.5.Section 1633.3 is added to the Civil Code, to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)Notwithstanding subdivisions (b) and (c), this title shall apply to electronic records and electronic signatures relating to transactions conducted by a person licensed, certified, or registered pursuant to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) for purposes of activities authorized by Section 7599.54 of the Business and Professions Code.
(h)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(3)Notwithstanding subdivision (l) of Section 1633.2 of the Civil Code, for purposes of this section, person includes, but is not limited to, the policy owner, policyholder, applicant, insured, or assignee or designee of an insured.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented shall be set forth on that record.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by first class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Sections 1633.15 and 1633.16 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7) and complies with the other provisions in this section.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic signature shall not be held liable for any deficiency in the electronic procedures agreed to by the parties under that contract if all of the following are met:
(1)The insurance agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
(2)The insurance agent or broker was not involved in the development or establishment of the electronic procedures.
(3)The insurance agent or broker did not deviate from the electronic procedures.
(d)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(e)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(f)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(g)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 5.Sections 1.5, 2.5, and 3.5 of this bill incorporate statutory changes to Section 1633.3 of the Civil Code proposed by both this bill and Assembly Bill 1097. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends or adds Section 1633.3 of the Civil Code, and (3) this bill is enacted after Assembly Bill 1097, in which case Sections 1, 2, and 3 of this bill shall not become operative.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(3)Notwithstanding subdivision (l) of Section 1633.2 of the Civil Code, for purposes of this section, person includes, but is not limited to, the policy owner, policyholder, applicant, insured, or assignee or designee of an insured.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented shall be set forth on that record.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by first class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Section Sections 1633.15 and 1633.16 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7) and complies with the other provisions in this section.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)An insurance agent or broker acting under the direction of a party that enters into a contract by means of an electronic record or electronic signature shall not be held liable for any deficiency in the electronic procedures agreed to by the parties under that contract if all of the following are met:
(1)The insurance agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
(2)The insurance agent or broker was not involved in the development or establishment of the electronic procedures.
(3)The insurance agent or broker did not deviate from the electronic procedures.
(c)
(d)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)
(e)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(e)
(f)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(f)
(g)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent form disclosure required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the persons opt-in consent. opt-in consent disclosure. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt in opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the confirmation and electronic signature, if either is required, signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent form and on the policy declaration page or annual statement if sent to the disclosure. In addition, if the person who consented receives an annual statement, the email address of the person who has consented. consented shall be set forth on that record.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by first class mail, regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the licensee shall maintain a process or system that can demonstrate that the record provided by electronic transmission was both sent and received consistent with Section 1633.15 of the Civil Code. If a different method of sending or receiving is agreed upon by the licensee and the person pursuant to Section 1633.15 of the Civil Code, a licensee shall comply with the provisions of this subdivision. The licensee shall retain and document information so that the documentation and information is retrievable upon request by the department while the current policy is in force and for five years thereafter related to its process or system demonstrating that the record provided by electronic transmission was sent to the person by the applicable statutory regular mail delivery deadlines and received electronically. The record provided by electronic transmission shall be treated as if mailed so long as the licensee delivers the record to the person in compliance with the applicable statutory regular mail delivery deadlines. record may be transmitted by electronic transmission if the licensee complies with all of the requirements of Section 1633.15 of the Civil Code.
(A)Acceptable methods for a licensee to demonstrate that the record was sent to the person include simple mail transfer protocol server log files indicating transmission, or other methodologies indicating sent transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(B)Acceptable methods for the licensee to demonstrate that the record was received by the person include server log files indicating that the email or application has been received, or log files showing that the person logged into his or her secured account with the licensee or other methodologies indicating received transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7). (7) and complies with the other provisions in this section.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or or, if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(e)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(f)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent form required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the persons opt-in consent. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the confirmation and electronic signature, if either is required, with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent form and on the policy declaration page or annual statement if sent to the person who has consented.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the licensee shall maintain a process or system that can demonstrate that the record provided by electronic transmission was both sent and received consistent with Section 1633.15 of the Civil Code. If a different method of sending or receiving is agreed upon by the licensee and the person pursuant to Section 1633.15 of the Civil Code, a licensee shall comply with the provisions of this subdivision. The licensee shall retain and document information so that the documentation and information is retrievable upon request by the department while the current policy is in force and for five years thereafter related to its process or system demonstrating that the record provided by electronic transmission was sent to the person by the applicable statutory regular mail delivery deadlines and received electronically. The record provided by electronic transmission shall be treated as if mailed so long as the licensee delivers the record to the person in compliance with the applicable statutory regular mail delivery deadlines.
(A)Acceptable methods for a licensee to demonstrate that the record was sent to the person include simple mail transfer protocol server log files indicating transmission, or other methodologies indicating sent transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(B)Acceptable methods for the licensee to demonstrate that the record was received by the person include server log files indicating that the email or application has been received, or log files showing that the person logged into his or her secured account with the licensee or other methodologies indicating received transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Any record required to be transmitted by first-class mail and not otherwise prohibited from being transmitted electronically may be transmitted under the provisions of paragraph (6), except that any notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, as defined in Section 101, that is not prohibited to be transmitted electronically by subdivision (a), may be transmitted electronically, only if the licensee demonstrates proof of electronic delivery and receipt as set forth in paragraph (7). This paragraph applies to any law that requires notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, including, but not limited to, subdivision (b) of Section 10113.71 and subdivision (c) of Section 10113.72.
(8)Notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7).
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(e)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(f)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786 as it applies to individual and group disability policies, Section 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 38.5 of the Insurance Code, as amended by Section 4 of Chapter 369 of the Statutes of 2013, is amended to read:38.5.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to any insurance on risks or on operations in this state not excepted by subdivision (a), (c), (d), (e), or (g) of Section 1851 from the coverage of Chapter 9 (commencing with Section 1850.4) of Part 2 of Division 1 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(b)In order to transmit a record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2) A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C) A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The disclosure required by paragraph (2) and the opt-in consent language may be set forth in the application or in a separate document that is part of the policy and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the persons opt-in consent and shall be obtained before the application is completed. The licensee shall retain a copy of the confirmation and electronic signature, if either is required, with the policy information so that each is retrievable upon request by the Department of Insurance while the policy is in force and for five years thereafter.
(4)If the transaction specifically involves the insured, the licensee shall include the insureds email address on the policy declaration page.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by regular mail, or does not specify a method of delivery, and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the licensee shall maintain a process or system that can demonstrate that the record provided by electronic transmission was both sent and received consistent with Section 1633.15 of the Civil Code. If a different method of sending or receiving is agreed upon by the licensee and the person pursuant to Section 1633.15 of the Civil Code, a licensee shall comply with the provisions of this subdivision. The licensee shall retain and document information so that the documentation and information is retrievable upon request by the department while the current policy is in force and for five years thereafter related to its process or system demonstrating that the record provided by electronic transmission was sent to the person by the applicable statutory regular mail delivery deadlines and received electronically. The record provided by electronic transmission shall be treated as if mailed so long as the licensee delivers it to the person in compliance with the applicable statutory regular mail delivery deadlines.
(A)Acceptable methods for a licensee to demonstrate that the record was sent to the person include simple mail transfer protocol server log files indicating transmission, or other methodologies indicating sent transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(B)Acceptable methods for the licensee to demonstrate that the record was received by the person include server log files indicating that the email or application has been received, or log files showing that the person logged into his or her secured account with the licensee or other methodologies indicating received transmission consistent with standards set forth in Section 1633.15 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers it to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(8)Any record required to be transmitted by first-class mail and not otherwise prohibited from being transmitted electronically may be transmitted under the provisions of paragraph (6), except that any notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance that is not prohibited to be transmitted electronically by subdivision (a), may be transmitted electronically, only if the licensee demonstrates proof of electronic delivery and receipt as set forth in paragraph (7). This paragraph applies to any law that requires notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, including, but not limited to, subdivision (b) of Section 10113.71 and subdivision (c) of Section 10113.72.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within two business days, either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the electronic offer, notice, or disclosure sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to induce or otherwise encourage the person to opt in to receive electronic records.
(12)If a person has consented to receive records electronically but a calendar year or more has elapsed since the last required record for which consent was provided was electronically transmitted by the licensee, the licensee shall verify, via paper writing sent by regular mail, the accuracy of the persons email address.
(c)On or before January 1, 2018, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(e)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(f)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 3.Section 38.8 of the Insurance Code is amended to read:38.8.Licensees shall maintain a system for electronically confirming a persons decision to opt in to an agreement to conduct transactions electronically and a system that will allow the person to electronically opt out of the agreement to conduct business electronically as specified in subdivision (c) of Section 1633.5. The licensee shall maintain the electronic records for the same amount of time the licensee would be required to maintain those records if the records were in written form.
SEC. 4.Section 663 of the Insurance Code, as amended by Section 6 of Chapter 369 of the Statutes of 2013, is amended to read:663.(a)Before policy expiration, an insurer shall deliver or mail to the named insured, at the address shown on the policy, one of the following:
(1)At least 20 days before expiration, a written or verbal offer of renewal of the policy, contingent upon payment of premium as stated in the offer.
(2)At least 30 days before expiration, a written notice of nonrenewal of the policy, including the statement required by Section 666.
(b)(1)An insurer that delivers a verbal offer to renew that is declined by an insured shall, at least 20 days before expiration of the policy, deliver to or mail to the named insured, at the address shown on the policy, a written confirmation of the offer and rejection.
(2)An insurer that attempts to satisfy subdivision (a) with a verbal offer to renew, but is unable to contact the named insured directly at least 20 days before policy expiration, shall, at least 20 days before policy expiration, deliver to or mail to the named insured, at the address shown on the policy, a written offer to renew the policy, contingent upon payment of premium as stated in the offer.
(c)In the event that an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 30 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal. Notwithstanding the failure of an insurer to comply with this section, the policy shall terminate on the effective date of any other replacement or succeeding automobile insurance policy procured by the insured, or his or her agent or broker, with respect to any automobile designated in both policies.
(d)The insurer shall not be required to notify the named insured, or any other insured, of nonrenewal of the policy if the insurer has mailed or delivered a notice of expiration or cancellation, on or prior to the 30th day preceding expiration of the policy period.
(e)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 5.Section 678 of the Insurance Code, as amended by Section 8 of Chapter 369 of the Statutes of 2013, is amended to read:678.(a)At least 45 days prior to policy expiration, an insurer shall deliver to the named insured or mail to the named insured at the address shown in the policy, either of the following:
(1)An offer of renewal of the policy contingent upon payment of premium as stated in the offer, stating each of the following:
(A)Any reduction of limits or elimination of coverage.
(B)The telephone number of the insurers representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the renewal offer.
(2)A notice of nonrenewal of the policy. That notice shall contain each of the following:
(A)The reason or reasons for the nonrenewal.
(B)The telephone number of the insurers representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the notice of nonrenewal.
(C)A brief statement indicating that if the consumer has contacted the insurer to discuss the nonrenewal and remains unsatisfied, he or she may have the matter reviewed by the department. The statement shall include the telephone number of the unit within the department that responds to consumer inquiries and complaints.
(b)In the event an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 45 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal.
(c)Any policy written for a term of less than one year shall be considered as if written for a term of one year. Any policy written for a term longer than one year, or any policy with no fixed expiration date, shall be considered as if written for successive policy periods or terms of one year.
(d)This section applies only to policies of insurance specified in Section 675.
(e)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 6.Section 678.1 of the Insurance Code, as amended by Section 10 of Chapter 369 of the Statutes of 2013, is amended to read:678.1.(a)This section applies only to policies of insurance of commercial insurance that are subject to Sections 675.5 and 676.6.
(b)A notice of nonrenewal shall be in writing and shall be delivered or mailed to the producer of record and to the named insured at the mailing address shown on the policy. Subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed.
(c)An insurer, at least 60 days, but not more than 120 days, in advance of the end of the policy period, shall give notice of nonrenewal, and the reasons for the nonrenewal, if the insurer intends not to renew the policy, or to condition renewal upon reduction of limits, elimination of coverages, increase in deductibles, or increase of more than 25 percent in the rate upon which the premium is based.
(d)If an insurer fails to give timely notice required by subdivision (c), the policy of insurance shall be continued, with no change in its terms or conditions, for a period of 60 days after the insurer gives the notice.
(e)With respect to policies defined in subdivision (b) of Section 676.6, in addition to the bases for conditional renewal set forth in subdivision (c), an insurer may also condition renewal upon requirements relating to the underlying policy or policies. If the requirements are not satisfied as of (1) the expiration date of the policy, or (2) 30 days after mailing or delivery of such notice, whichever is later, the conditional renewal notice shall be treated as an effective notice of nonrenewal, provided the insurer has sent written confirmation to the first named insured and the producer of record that the conditions were not met and that coverage ceased at the expiration date shown in the expiring policy.
(f)A notice of nonrenewal shall not be required in any of the following situations:
(1)The transfer of, or renewal of, a policy without a change in its terms or conditions or the rate on which the premium is based between insurers that are members of the same insurance group.
(2)The policy has been extended for 90 days or less, if the notice required in subdivision (c) has been given prior to the extension.
(3)The named insured has obtained replacement coverage or has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage.
(4)The policy is for a period of no more than 60 days and the insured is notified at the time of issuance that it may not be renewed.
(5)The named insured requests a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period.
(6)The insurer has made a written offer to the insured, within the time period specified in subdivision (c), to renew the policy under changed terms or conditions or at a changed premium rate. As used herein, terms or conditions includes, but is not limited to, a reduction in limits, elimination of coverages, or an increase in deductibles.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 786 as it applies to individual and group disability policies, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019.
(h)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 3.Section 1633.3 of the Civil Code, as amended by Section 4 of Chapter 913 of the Statutes of 2014, is amended to read:1633.3.(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786, 10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall become operative on January 1, 2019. 2021.
SEC. 4.Section 38.6 is added to the Insurance Code, to read:38.6.(a)(1)Any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, as defined in Section 101 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature.
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(b)In order to transmit a life insurance record electronically, a licensee shall comply with all of the following:
(1)A licensee, or licensees representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission. A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the licensee shall confirm consent in writing or electronically. The licensee shall retain a record of the persons consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter.
(2)A licensee discloses, in writing or electronically, to the person all of the following:
(A)The opt in to receive the record by electronic transmission is voluntary.
(B)That the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out.
(C)A description of the record that the person will receive by electronic transmission.
(D)The process or system to report a change or correction in the persons email address.
(E)The licensees contact information, which includes, but is not limited to, a toll-free number or the licensees Internet Web site address.
(3)The opt-in consent form required by paragraph (2) may be set forth in the application or in a separate document that is part of the policy approved by the commissioner and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the persons opt-in consent. If the licensee seeks consent at any time prior to the completion of the application, consent and signature shall be obtained before the application is completed. If the person has not opted in at the time the application is completed, the licensee may receive the opt in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application. The licensee shall retain a copy of the confirmation and electronic signature, if either is required, with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter.
(4)The email address of the person who has consented to electronic transmission shall be set forth on the consent form and on the policy declaration page or annual statement if sent to the person who has consented.
(5)The licensee shall annually provide one free printed copy of any record described in this subdivision upon request by the person.
(6)If a provision of this code requires a licensee to transmit a record by regular mail, does not specify a method of delivery, or is a record that is required to be provided pursuant to Article 6.6 (commencing with Section 791), and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the licensee shall maintain a process or system that can demonstrate that the record provided by electronic transmission was both sent and received consistent with Section 1633.15 of the Civil Code. If a different method of sending or receiving is agreed upon by the licensee and the person pursuant to Section 1633.15 of the Civil Code, a licensee shall comply with the provisions of this subdivision. The licensee shall retain and document information so that the documentation and information is retrievable upon request by the department while the current policy is in force and for five years thereafter related to its process or system demonstrating that the record provided by electronic transmission was sent to the person by the applicable statutory regular mail delivery deadlines and received electronically. The record provided by electronic transmission shall be treated as if mailed so long as the licensee delivers the record to the person in compliance with the applicable statutory regular mail delivery deadlines.
(A)Acceptable methods for a licensee to demonstrate that the record was sent to the person include simple mail transfer protocol server log files indicating transmission, or other methodologies indicating sent transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(B)Acceptable methods for the licensee to demonstrate that the record was received by the person include server log files indicating that the email or application has been received, or log files showing that the person logged into his or her secured account with the licensee or other methodologies indicating received transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code and the provisions of this section, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(D)If a licensee is unable to demonstrate actual delivery and receipt pursuant to this paragraph, the licensee shall resend the record by regular mail to the person in the manner originally specified by the underlying provision of this code.
(8)Any record required to be transmitted by first-class mail and not otherwise prohibited from being transmitted electronically may be transmitted under the provisions of paragraph (6), except that any notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, as defined in Section 101, that is not prohibited to be transmitted electronically by subdivision (a), may be transmitted electronically, only if the licensee demonstrates proof of electronic delivery and receipt as set forth in paragraph (7). This paragraph applies to any law that requires notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, including, but not limited to, subdivision (b) of Section 10113.71 and subdivision (c) of Section 10113.72.
(9)If the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee shall notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record.
(10)(A)Upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee shall, within five business days, comply with either clause (i) or (ii):
(i)Contact the person to confirm or update the persons email address and resend the record by electronic transmission. If the licensee elects to resend the record by electronic transmission, the licensee shall demonstrate the transmission was received by the person, pursuant to paragraph (6), (7), or (8). If the licensee is unable to confirm or update the persons email address, the licensee shall resend the record by regular mail to the licensee at the address shown on the policy, or if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(ii)Resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, or if the underlying statute requires delivery in a specified manner, send the record in that specified manner.
(B)If the licensee sends the first electronic record within the time period required by law and the licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the record sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to opt in to receive electronic records.
(12)The licensee shall verify a persons email address via paper writing sent by regular mail when more than 12 months have elapsed since the licenses last electronic communication.
(c)On or before January 1, 2020, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, as defined in Section 101, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(e)The department may suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section. A licensee may appeal the suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the requirements of this section are satisfactory.
(f)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
(a)Except as otherwise provided in subdivisions (b) and (c), this title applies to electronic records and electronic signatures relating to a transaction.
(b)This title does not apply to transactions subject to the following laws:
(1)A law governing the creation and execution of wills, codicils, or testamentary trusts.
(2)Division 1 (commencing with Section 1101) of the Uniform Commercial Code, except Sections 1206 and 1306.
(3)Divisions 3 (commencing with Section 3101), 4 (commencing with Section 4101), 5 (commencing with Section 5101), 8 (commencing with Section 8101), 9 (commencing with Section 9101), and 11 (commencing with Section 11101) of the Uniform Commercial Code.
(4)A law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record. However, this paragraph does not apply to Section 1677 or 1678 of this code or Section 1298 of the Code of Civil Procedure.
(c)This title does not apply to any specific transaction described in Section 17511.5 of the Business and Professions Code, Section 56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7, or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14, 1789.16, or 1793.23 of, Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5, 1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i, 2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section 2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section 2954.5 or 2963 of, Chapter 2b (commencing with Section 2981) or 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of, Section 3071.5 of, Part 5 (commencing with Section 4000) of Division 4 of, or Part 5.3 (commencing with Section 6500) of Division 4 of this code, subdivision (b) of Section 18608 or Section 22328 of the Financial Code, Section 1358.15, 1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety Code, Section 662, paragraph (2) of subdivision (a) of Section 663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of Section 678, subdivisions (a) and (b) of Section 678.1, Section 786, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or 11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482 of the Public Utilities Code, or Section 9975 or 11738 of the Vehicle Code. An electronic record may not be substituted for any notice that is required to be sent pursuant to Section 1162 of the Code of Civil Procedure. Nothing in this subdivision shall be construed to prohibit the recordation of any document with a county recorder by electronic means.
(d)This title applies to an electronic record or electronic signature otherwise excluded from the application of this title under subdivision (b) when used for a transaction subject to a law other than those specified in subdivision (b).
(e)A transaction subject to this title is also subject to other applicable substantive law.
(f)The exclusion of a transaction from the application of this title under subdivision (b) or (c) shall be construed only to exclude the transaction from the application of this title, but shall not be construed to prohibit the transaction from being conducted by electronic means if the transaction may be conducted by electronic means under any other applicable law.
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 38.5 of the Insurance Code, as amended by Section 4 of Chapter 369 of the Statutes of 2013, is amended to read:38.5.(a)(1)Any written notice record required to be given or mailed to any person by an insurer a licensee relating to any insurance on risks or on operations in this state not excepted by subdivision (a), (b), (c), (d), (e), or (g) of Section 1851 from the coverage of Chapter 9 (commencing with Section 1850.4) of Part 2 of Division 1 of this code may, if not excluded by subdivision (b) or (c) of Section 1633.3 of the Civil Code, be provided by electronic transmission pursuant to Title 2.5 (commencing with Section 1633.1) of Part 2 of Division 3 of the Civil Code, if each party has agreed to conduct the transaction by electronic means pursuant to Section 1633.5 of the Civil Code. Civil Code, and if the licensee complies with the provisions of this section. A valid electronic signature shall be sufficient for any provision of law requiring a written signature. The affidavit of the person who initiated the electronic transmission, stating the facts of that transmission into an information processing system outside of the control of the sender or of any person that sent the electronic record on behalf of the sender, is prima facie evidence that the notice was transmitted and shall be sufficient proof of notice. Any notice provided by electronic transmission shall be treated as if mailed or given for the purposes of any provision of this code, except as provided by subdivision (g) of Section 1633.15 of the Civil Code. The insurance company shall maintain a system for confirming that any notice or document that is to be provided by electronic means has been sent in a manner consistent with Section 1633.15 of the Civil Code. A valid electronic signature shall be sufficient for any provision of law requiring a written signature. The insurance company shall retain a copy of the confirmation and electronic signature, when either is required, with the policy information so that they are retrievable upon request by the Department of Insurance while the policy is in force and for five years thereafter.
(b)The offer of renewal required by Sections 663 and 678, the notice of conditional renewal required by Section 678.1, and the offer of coverage or renewal or any disclosure required by Section 10086 and the offer of renewal for a workers compensation policy may be provided by electronic transmission if an insurer complies with all of the following:
(2)For purposes of this section, the definitions set forth in Section 1633.2 of the Civil Code shall apply. The term licensee means an insurer, agent, broker, or any other person who is required to be licensed by the department.
(b)In order to transmit a record electronically, a licensee shall comply with all of the following:
(1)An insurer, or insurers A licensee, or licensees representative, acquires the consent of the insured person to opt in to receive the offer, notice, or disclosure record by electronic transmission, and the insured person has not withdrawn that consent, prior to providing the offer, notice, or disclosure record by electronic transmission. An insureds A persons consent may be acquired verbally, in writing, or electronically. If consent is acquired verbally, the insurer licensee shall confirm consent in writing or electronically. The insurer licensee shall retain a record of the insureds persons consent to receive the offer, notice, or disclosure record by electronic transmission with the policy information so that it is retrievable upon request by the Department of Insurance department while the policy is in force and for five years thereafter.
(2)An insurer A licensee discloses, in writing or electronically, to the insured person all of the following:
(A)The opt in to receive the offer, notice, or disclosure record by electronic transmission is voluntary.
(B)That the insured person may opt out of receiving the offer, notice, or disclosure record by electronic transmission at any time, and the process or system for the insured person to opt out.
(C) A description of the offer, notice, or disclosure record that the insured person will receive by electronic transmission.
(D)The process or system to report a change or correction in the insureds persons email address.
(E)The insurers licensees contact information, which includes, but is not limited to, a toll-free number or an insurers the licensees Internet Web site address.
(3)The disclosure required by paragraph (2) and the opt-in consent language may be set forth in the application or in a separate document that is part of the policy and shall be bolded or otherwise set forth in a conspicuous manner. The persons signature shall be set forth immediately below the persons opt-in consent and shall be obtained before the application is completed. The licensee shall retain a copy of the confirmation and electronic signature, if either is required, with the policy information so that each is retrievable upon request by the Department of Insurance while the policy is in force and for five years thereafter.
(3)An insurer
(4)If the transaction specifically involves the insured, the licensee shall include the insureds email address on the policy declaration page.
(4)An insurer
(5)The licensee shall annually provide one free printed copy of any offer, notice, or disclosure record described in this subdivision upon request by the insured. the person.
(5)An insurer
(6)If a provision of this code requires a licensee to transmit a record by regular mail, or does not specify a method of delivery, and if the licensee is not otherwise prohibited from transmitting the record electronically under subdivision (b) of Section 1633.8 of the Civil Code, then the licensee shall maintain a process or system that can demonstrate that the offer, notice, or disclosure record provided by electronic transmission was both sent and received consistent with Section 1633.15 of the Civil Code. If a different method of sending or receiving is agreed upon by the insurer licensee and the insured person pursuant to Section 1633.15 of the Civil Code, an insurer a licensee shall comply with the provisions of this subdivision. The insurer licensee shall retain and document information so that the documentation and information is retrievable upon request by the Department of Insurance department while the current policy is in force and for five years thereafter related to its process or system demonstrating that the offer, notice, or disclosure record provided by electronic transmission was sent to the insured person by the applicable statutory regular mail delivery deadlines and received electronically. The offer, notice, or disclosure record provided by electronic transmission shall be treated as if mailed so long as the insurer licensee delivers it to the insured person in compliance with the applicable statutory regular mail delivery deadlines.
(A)Acceptable methods for an insurer a licensee to demonstrate that the offer, notice, or disclosure record was sent to the insured person include simple mail transfer protocol server log files indicating transmission, or other methodologies indicating sent transmission consistent with the standards set forth in Section 1633.15 of the Civil Code.
(B)Acceptable methods for an insurer the licensee to demonstrate that the offer, notice, or disclosure record was received by the insured person include server log files indicating that the email or application has been received, or log files showing that the insured person logged into his or her secured account with the insurer, licensee or other methodologies indicating received transmission consistent with standards set forth in Section 1633.15 of the Civil Code.
(7)Notwithstanding subdivision (b) of Section 1633.8 of the Civil Code, if a provision of this code requires a licensee to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically under Section 1633.3 of the Civil Code, then the licensee shall maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph. The licensee shall document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force. The record provided by electronic transmission shall be treated as if actually received if the licensee delivers it to the person in compliance with applicable statutory delivery deadlines. A licensee may demonstrate actual delivery and receipt by any of the following:
(A)The person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature.
(B)The record is made part of, or attached to, an email sent to the email address designated by the person, a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email.
(C)The record is posted on the licensees secure Internet Web site, evidence demonstrating that the person logged onto the licensees secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
(8)Any record required to be transmitted by first-class mail and not otherwise prohibited from being transmitted electronically may be transmitted under the provisions of paragraph (6), except that any notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance that is not prohibited to be transmitted electronically by subdivision (a), may be transmitted electronically, only if the licensee demonstrates proof of electronic delivery and receipt as set forth in paragraph (7). This paragraph applies to any law that requires notice of nonrenewal, lapse, cancellation, or termination of a policy of life insurance, including, but not limited to, subdivision (b) of Section 10113.71 and subdivision (c) of Section 10113.72.
(6)
(9)If the offer, notice, or disclosure record is not delivered directly to the electronic address designated by the insured, person but placed at an electronic address accessible to the insured, an insurer person, a licensee shall notify the insured person in plain, clear, and conspicuous language at the electronic address designated by the insured person that describes the offer, notice, or disclosure, record, informs that insured person that it is available at another location, and provides instructions to the insured person as to how to obtain the offer, notice, or disclosure. record.
(7)
(10)(A)Upon an insurer a licensee receiving information indicating that the offer, notice, or disclosure record sent by electronic transmission was not received by the insured, the insurer person, the licensee shall, within two business days, either clause (i) or (ii):
(i)Contact the insured person to confirm or update the insureds persons email address and resend the offer, notice, or disclosure record by electronic transmission. If the insurer licensee elects to resend the offer, notice, or disclosure record by electronic transmission, the insurer licensee shall demonstrate the transmission was received by the insured, person, pursuant to paragraph (5) (6), (7), or (8). If the insurer licensee is unable to confirm or update the insureds persons email address, the insurer licensee shall resend the offer, notice, or disclosure record by regular mail to the insured licensee at the address shown on the policy.
(ii)Resend the offer, notice, or disclosure record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy.
(B)If the insurer licensee sends the first electronic offer, notice, or disclosure record within the time period required by law and the insurer licensee complies with both paragraph (5) and subparagraph (A) of this paragraph, the electronic offer, notice, or disclosure sent pursuant to clause (i) or (ii) of subparagraph (A) shall be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines.
(11)The licensee shall not charge any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically. The licensee shall not provide a discount or an incentive to any person to induce or otherwise encourage the person to opt in to receive electronic records.
(12)If a person has consented to receive records electronically but a calendar year or more has elapsed since the last required record for which consent was provided was electronically transmitted by the licensee, the licensee shall verify, via paper writing sent by regular mail, the accuracy of the persons email address.
(8)
(c)On or before January 1, 2018, the commissioner shall submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized by this section. The report shall include input from insurers, consumers, and consumer organizations, and shall include an assessment of the departments experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized by this section.
(d)Notwithstanding paragraph (4) of subdivision (b) of Section 1633.3 of the Civil Code, for any policy of life insurance, any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by subdivision (c) of Section 1633.3 of the Civil Code, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions of this section.
(c)
(e)The department may suspend an insurer a licensee from providing offers, notices, or disclosures records by electronic transmission if there is a pattern or practices that demonstrate the insurer licensee has failed to comply with the requirements of this section. An insurer A licensee may appeal the suspension and resume its electronic transmission of offers, notices, or disclosures records upon communication from the department that the changes the insurer licensee made to its process or system to comply with the requirements of this section are satisfactory.
(d)
(f)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 3.Section 38.8 of the Insurance Code is amended to read:38.8.Insurers Licensees shall maintain a system for electronically confirming a policyholders persons decision to opt in to an agreement to conduct transactions electronically and a system that will allow the policyholder person to electronically opt out of the agreement to conduct business electronically as specified in subdivision (c) of Section 1633.5. The insurer licensee shall maintain the electronic records for the same amount of time the insurer licensee would be required to maintain those records if the records were in written form.
SEC. 4.Section 663 of the Insurance Code, as amended by Section 6 of Chapter 369 of the Statutes of 2013, is amended to read:663.(a)Before policy expiration, an insurer shall deliver or mail to the named insured, at the address shown on the policy, one of the following:
(1)At least 20 days before expiration, a written or verbal offer of renewal of the policy, contingent upon payment of premium as stated in the offer.
(2)At least 30 days before expiration, a written notice of nonrenewal of the policy, including the statement required by Section 666.
(b)(1)An insurer that delivers a verbal offer to renew that is declined by an insured shall, at least 20 days before expiration of the policy, deliver to or mail to the named insured, at the address shown on the policy, a written confirmation of the offer and rejection.
(2)An insurer that attempts to satisfy subdivision (a) with a verbal offer to renew, but is unable to contact the named insured directly at least 20 days before policy expiration, shall, at least 20 days before policy expiration, deliver to or mail to the named insured, at the address shown on the policy, a written offer to renew the policy, contingent upon payment of premium as stated in the offer.
(c)In the event that an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 30 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal. Notwithstanding the failure of an insurer to comply with this section, the policy shall terminate on the effective date of any other replacement or succeeding automobile insurance policy procured by the insured, or his or her agent or broker, with respect to any automobile designated in both policies.
(d)The insurer shall not be required to notify the named insured, or any other insured, of nonrenewal of the policy if the insurer has mailed or delivered a notice of expiration or cancellation, on or prior to the 30th day preceding expiration of the policy period.
(e)The offer of renewal pursuant to this section may be provided electronically to the email address shown on the policy if the insurer complies with subdivision (b) of Section 38.5.
(f)
(e)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 5.Section 678 of the Insurance Code, as amended by Section 8 of Chapter 369 of the Statutes of 2013, is amended to read:678.(a)At least 45 days prior to policy expiration, an insurer shall deliver to the named insured or mail to the named insured at the address shown in the policy, either of the following:
(1)An offer of renewal of the policy contingent upon payment of premium as stated in the offer, stating each of the following:
(A)Any reduction of limits or elimination of coverage.
(B)The telephone number of the insurers representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the renewal offer.
(2)A notice of nonrenewal of the policy. That notice shall contain each of the following:
(A)The reason or reasons for the nonrenewal.
(B)The telephone number of the insurers representatives who handle consumer inquiries or complaints. The telephone number shall be displayed prominently in a font size consistent with the other text of the notice of nonrenewal.
(C)A brief statement indicating that if the consumer has contacted the insurer to discuss the nonrenewal and remains unsatisfied, he or she may have the matter reviewed by the department. The statement shall include the telephone number of the unit within the department that responds to consumer inquiries and complaints.
(b)In the event an insurer fails to give the named insured either an offer of renewal or notice of nonrenewal as required by this section, the existing policy, with no change in its terms and conditions, shall remain in effect for 45 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured. A notice to this effect shall be provided by the insurer to the named insured with the policy or the notice of renewal or nonrenewal.
(c)Any policy written for a term of less than one year shall be considered as if written for a term of one year. Any policy written for a term longer than one year, or any policy with no fixed expiration date, shall be considered as if written for successive policy periods or terms of one year.
(d)This section applies only to policies of insurance specified in Section 675.
(e)The offer of renewal pursuant to this section may be provided electronically to the email address shown on the policy if the insurer complies with subdivision (b) of Section 38.5.
(f)
(e)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 6.Section 678.1 of the Insurance Code, as amended by Section 10 of Chapter 369 of the Statutes of 2013, is amended to read:678.1.(a)This section applies only to policies of insurance of commercial insurance that are subject to Sections 675.5 and 676.6.
(b)A notice of nonrenewal shall be in writing and shall be delivered or mailed to the producer of record and to the named insured at the mailing address shown on the policy. Subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed.
(c)An insurer, at least 60 days, but not more than 120 days, in advance of the end of the policy period, shall give notice of nonrenewal, and the reasons for the nonrenewal, if the insurer intends not to renew the policy, or to condition renewal upon reduction of limits, elimination of coverages, increase in deductibles, or increase of more than 25 percent in the rate upon which the premium is based.
(d)If an insurer fails to give timely notice required by subdivision (c), the policy of insurance shall be continued, with no change in its terms or conditions, for a period of 60 days after the insurer gives the notice.
(e)With respect to policies defined in subdivision (b) of Section 676.6, in addition to the bases for conditional renewal set forth in subdivision (c), an insurer may also condition renewal upon requirements relating to the underlying policy or policies. If the requirements are not satisfied as of (1) the expiration date of the policy, or (2) 30 days after mailing or delivery of such notice, whichever is later, the conditional renewal notice shall be treated as an effective notice of nonrenewal, provided the insurer has sent written confirmation to the first named insured and the producer of record that the conditions were not met and that coverage ceased at the expiration date shown in the expiring policy.
(f)A notice of nonrenewal shall not be required in any of the following situations:
(1)The transfer of, or renewal of, a policy without a change in its terms or conditions or the rate on which the premium is based between insurers that are members of the same insurance group.
(2)The policy has been extended for 90 days or less, if the notice required in subdivision (c) has been given prior to the extension.
(3)The named insured has obtained replacement coverage or has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage.
(4)The policy is for a period of no more than 60 days and the insured is notified at the time of issuance that it may not be renewed.
(5)The named insured requests a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period.
(6)The insurer has made a written offer to the insured, within the time period specified in subdivision (c), to renew the policy under changed terms or conditions or at a changed premium rate. As used herein, terms or conditions includes, but is not limited to, a reduction in limits, elimination of coverages, or an increase in deductibles.
(g)The notice of conditional renewal described in subdivision (c) may be provided electronically to the email address shown on the policy if the insurer complies with subdivision (b) of Section 38.5.
(h)
(g)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
|
Date
|
Status
|
|---|---|
| Sep 9, 2015 | Assembly Rule 77 suspended. |
| Jul 15, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (July 14). Re-referred to Com. on APPR. |
| Aug 17, 2015 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8 and be amended. |
| Aug 18, 2015 | Read second time and amended. Ordered to third reading. |
| Sep 1, 2015 | Read third time and amended. Ordered to second reading. |
| Sep 2, 2015 | Read second time. Ordered to third reading. |
| Sep 8, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 10 pursuant to Assembly Rule 77. |
| Sep 8, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Sep 8, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2585.). |
| Jul 8, 2015 | From committee: Do pass and re-refer to Com. on JUD. with recommendation: To Consent Calendar. (Ayes 8. Noes 0.) (July 8). Re-referred to Com. on JUD. |
| Sep 9, 2015 | Assembly Rule 77 suspended. (Page 2990.) |
| Sep 9, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Sep 9, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0. Page 3020.). |
| Sep 9, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0.). |
| Sep 17, 2015 | Enrolled and presented to the Governor at 4 p.m. |
| Oct 8, 2015 | Approved by the Governor. |
| Oct 8, 2015 | Chaptered by Secretary of State - Chapter 638, Statutes of 2015. |
| May 20, 2015 | From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.) (May 20). |
| Mar 1, 2015 | From printer. May be heard in committee March 31. |
| Mar 2, 2015 | Read first time. |
| Mar 19, 2015 | Referred to Com. on INS. |
| May 4, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| May 5, 2015 | Re-referred to Com. on INS. |
| May 6, 2015 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 13. Noes 0.) (May 6). Re-referred to Com. on APPR. |
| May 14, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| May 18, 2015 | Re-referred to Com. on APPR. |
| Feb 27, 2015 | Introduced. To print. |
| May 21, 2015 | Read second time. Ordered to Consent Calendar. |
| May 26, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 26, 2015 | Read third time. Passed. Ordered to the Senate. |
| May 26, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 1595.) |
| Jun 4, 2015 | Referred to Coms. on INS. and JUD. |
| Jun 19, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jun 29, 2015 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 9, 2015 | AB 1131 DABABNEH Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 8, 2015 | Assembly 3rd Reading AB1131 Dababneh By Hall | Senate Floor |
Passed |
|
| Jul 14, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Judiciary |
Passed |
|
| Jul 8, 2015 | Do pass, but first be re-referred to the Committee on [Judiciary] with the recommendation: To Consent Calendar | Senate Standing Committee on Insurance |
Passed |
|
| May 26, 2015 | AB 1131 DABABNEH Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| May 20, 2015 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| May 6, 2015 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| American Council Of Life Insurers | ** Support | Sep 8, 2015 |
| Department of Insurance | ** Support | Sep 8, 2015 |
| Deputy Insurance Commissioner | * Indeterminate | Jul 14, 2015 |
AB 1131
Page 3
CONCURRENCE IN SENATE AMENDMENTS
AB 1131
(Dababneh)
As Amended September 1, 2015
Majority vote
ASSEMBLY: |
76-0 |
(May 26, 2015) |
SENATE: |
40-0 |
(September 8, 2015) |
Original Committee Reference: INS.
SUMMARY: Permits consumers to receive documents and conduct certain transactions related to life insurance, disability insurance and annuities electronically.
The Senate amendments:
Clarify that an agent or broker is not liable for any deficiencies in the system used by the insurer to conduct electronic transactions.
Make minor technical changes.
Add amendments to eliminate chaptering out conflicts with AB 1097 (Holden) of the current legislative session.
EXISTING LAW: Establishes the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (eSIGN) that governs the conduct of electronic transactions and requires that both parties consent to conducting transactions electronically.
Prohibits the use of electronic transactions for many insurance products.
Permits consumers, who opt-in, to receive electronic renewal notices for the following types of insurance policies:
Automobile
Property
Liability
Commercial liability
Workers' Compensation
Requires the insurer to obtain consent from the insured before sending electronic renewal notices.
Requires the insurer to make the following disclosures to the consumer before sending electronic renewal notices and disclosures:
That the insured must opt-in to receiving these electronic documents.
That the insured may opt-out of electronic receipt at any time.
How the insured can change the email address used by the insurer.
Provide the insured the insurer's contact information (including toll free phone number and Web site address).
Permits an insurer, after obtaining consent from the insured, to send offers of earthquake insurance and renewal notices for earthquake insurance policies electronically.
Requires the insurer to provide the consumer, upon request, a printed copy of the electronic documents to the insured.
Requires the insurer to do one of the following within two business days if the electronic transmission fails:
Contact the insured to confirm the email address and resend the document electronically.
Resend the documents by regular mail to the insured's address.
Permits the department to suspend an insurer's authorization to send electronic documents if the insurer has a pattern or practice that demonstrates a failure to comply with the bill's requirements.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Purpose. According to the author, current law needs to be updated to allow broader use of voluntary e-delivery and e-signature of life insurance documents. While California law largely follows the principles of the federal eSIGN legislation, many life insurance documents are still required to be delivered in hardcopy form, and many transactions still have a "wet signature" requirement. This has prevented the life insurers from implementing a completely electronic sales process, presenting challenges to customers and agents, and undermining the benefits to insurers and consumers of full electronic processing. In advancing this legislation, the department and the life insurance industry are attempting to meet the increasing demand of California consumers to conduct business electronically, and take advantage of the convenience of e-delivery and e-signatures in life insurance.
Electronic Transactions. In 2000 eSIGN was enacted to establish federal law governing electronic transactions. Generally speaking, UETA (adopted by California in 1999) provides that the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from UETA may be conducted electronically, subject to specific rules including:
All parties must "opt-in" and may "opt-out" from conducting further transactions electronically at any time.
A record or signature cannot be denied legal effect because it is in electronic form.
If a law requires a person to provide information in writing to another, that requirement is satisfied if the information is provided in an electronic record that the recipient can preserve and access for future reference.
Advantages of Electronic Transactions. Electronic transactions notices have a number of significant advantages including:
Consumer Choice. Many consumers prefer to interact with their financial services companies electronically and current law denies these consumers that option.
Faster Delivery. First class mail is typically delivered within a few days whereas electronic mail is essentially instantaneous.
Cheaper. Electronic delivery will reduce administrative costs for insurers.
Greener. Electronic delivery eliminates the consumption of energy, paper, and other consumables associated with delivering conventional mail.
Disaster Recovery. Natural disasters frequently disrupt mail delivery. Electronic delivery of these notices greatly reduces the potential for disruptions related to natural disasters.
Portability. For the many consumers who do not receive their mail at their primary residence or who change their primary residence frequently, electronic delivery provides a more timely notice.
Previous Legislation. Senate Bill 251 (Calderon), Chapter 369, Statutes of 2013 which allows policy renewal notices for property/casualty insurance policies to be delivered electronically. This bill closely parallels the requirements of SB 251 as it relates to notices and disclosures related to life insurance. However, this bill allows for a dramatically broader range of electronic transactions in life insurance including the transmission of key documents requiring an affirmative acknowledgment of receipt by the consumer (including the policy document itself and notices of lapse, termination, cancellation or non-renewal).
Partial Progress. Property/casualty, life, and health insurers have long sought more flexibility in responding to consumer demand for greater electronic commerce options. Last Session, SB 251 made the first significant strides. However, the scope of electronic activity allowed by this bill stands in stark contrast to current law that still prohibits simple, common, consumer initiated transactions in property/casualty insurance. If this bill is enacted consumers would face the incongruous reality of being able to purchase an annuity costing hundreds of thousands of dollars online, but still have to use a paper process to add a vehicle to their automobile policy. This bill recognizes the increasing demand from consumers, who already safely conduct most of their financial affairs online, to bring life insurance products online, and highlights the need to recognize that same demand in other types of insurance products.
Analysis Prepared by: Paul Riches / INS. / (916) 319-2086 FN: 0002081
AB 1131
Page 6
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Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1131
Amended: 9/1/15 in Senate
SENATE INSURANCE COMMITTEE: 8-0, 7/8/15
AYES: Roth, Gaines, Berryhill, Glazer, Hall, Hernandez, Liu, Wieckowski
NO VOTE RECORDED: Mitchell
SENATE JUDICIARY COMMITTEE: 7-0, 7/14/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski
ASSEMBLY FLOOR: 76-0, 5/26/15 - See last page for vote
SUBJECT: Insurance: electronic transmission
SOURCE: Association of California Life and Health Insurance Companies
Department of Insurance
DIGEST: This bill permits life insurance carriers, agents and brokers to send documents and conduct transactions related to life insurance and annuities electronically.
Senate Floor Amendments of 9/1/15 add double-jointing language to avoid a chaptering problem with AB 1097.
Existing law:
Codifies the Uniform Electronic Transactions Act (UETA) which provides that a record or signature cannot be denied legal effect or enforceability because it is in electronic form provided that the transaction complies with specified standards and principles.
Exempts types of transactions or classes of records related to specified Insurance Code sections from being conducted under UETA.
This bill:
Applies UETA (by eliminating the exemption) to the following:
Notices included or attached to individual policies or annuities that disclose the period in which the applicant has the right to return the policy without penalty (“free look period”) (Ins. Code §§ 786, 10127.7, 10127.9, 10127.10.)
A notice of premium increase for individual policies. (Ins. Code § 10113.7.)
Notices and signed statements regarding replacement policies and annuities. (Ins. Code §§ 10509.4 and 10509.7.)
Defines “licensee” as an insurer, agent, broker, or any other person who is required to be licensed by California Department of Insurance (CDI).
Requires the licensee to document the consumer’s consent to engage in electronic transactions, as specified, and retain documentation while the policy is in force and at least five years thereafter.
Requires a licensee to disclose to the consumer the following:
The option to receive records electronically is voluntary.
The consumer may opt-out at any time and a description of the opt-out process.
A description of the documents to be received electronically.
The process to change the consumer’s email address.
The licensee's contact information, including phone number and Internet Web site address.
Requires the licensee to provide, upon request of the consumer, a hard copy of any life insurance document free of charge once per year.
Requires that the consumer’s email address be placed on the consent disclosure and, if provided, an annual statement.
Prohibits charging a fee or offering a discount based on a consumer's willingness to accept electronic documents.
Requires the licensee to confirm the email address of any consumer who elected to receive life insurance documents electronically if more than 12 months have elapsed since the last electronic communication with the consumer.
Requires the insurer to follow-up with the consumer within five business days, as specified, if the licensee receives information that the record was not received.
Establishes that the following records, if not otherwise prohibited due to formatting, placement, or other restrictions, may be sent electronically:
Records sent by first class or regular mail.
Records not subject to a particular delivery method.
Records sent in compliance with the Insurance Information and Privacy Protection Act (Ins. Code §§ Section 791 et seq.)
Establishes that the following records, if not excluded from UETA, may be sent electronically if not otherwise prohibited by other law if the licensee maintains a system or process that can demonstrate actual receipt of a document:
Records sent by registered or certified mail.
Records sent by any method requiring return receipt or signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person.
Notices of termination or nonrenewal.
Provides that acceptable proof of actual receipt includes any of the following:
An electronic receipt returned by the consumer or electronic signature executed by the consumer.
A confirmation receipt or some other evidence that the person received the email in his or her email account and opened the email.
Evidence demonstrating that the person logged onto the licensee’s secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
Requires the licensee to send a hardcopy of any document for which a written acknowledgment of receipt is required if the licensee cannot demonstrate that the electronic document was actually received.
Provides that even if a life insurance transaction is excluded from UETA by Section 1633.3(b)(4) of the Civil Code (documents that must be separately signed), any statutory requirement for a separate acknowledgment, signature, or initial may be transacted using an electronic signature or by electronic transaction so long as the requirement is not specifically excluded from UETA and the licensee complies with all applicable provisions of this bill.
Exempts an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if the insurance agent or broker meets various requirements, including that the agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
Requires the Insurance Commissioner (IC) to report to the Governor and the Legislature regarding the impact and implementation of the bill on or before January 1, 2020.
Permits CDI to suspend the authority of a licensee to transmit life insurance records electronically if CDI can establish a pattern or practice that demonstrates a lack of compliance with the provisions of this bill.
Sunsets the bill effective January 1, 2021.
Provides that if this bill and AB 1097 are enacted and go into effect January 1, 2016, and this bill goes into effect after AB 1097, the changes made by both bills to Civil Code Section 1633.3 will go into effect.
Background
Some types of agreements and transactions are only enforceable if they are in writing. Most electronic transactions are recognized as the equivalent of paper transaction as provided by the Uniform Electronic Transactions Act (UETA) enacted in 1999 and the federal Electronic Records and Signatures in Global and National Commerce Act (ESIGN) enacted in 2000. Both laws provide that electronic transactions and signatures satisfy writing requirements so long as both parties consent (“opt-in”) and follow some basic rules. Both acts also have provisions that allow for certain exceptions.
When electronic commerce was still young, electronic delivery was seen as unreliable. This led to California adopt numerous exceptions to UETA in 1999, including many insurance-related documents. Now many consumers rely on their cell phones, computers, and other devices to manage their affairs. This bill specifically applies UETA to the purchase of life insurance (including annuities), notices related to life insurance, and notices of cancelation of life insurance. This bill also authorizes other types of transactions generally so long as the transaction meets specified standards.
Consistent with UETA and ESIGN, this bill imposes duties for electronic delivery based on the prescribed hardcopy delivery method. For regular or first-class mail, the basic UETA rules apply along with additional safeguards established in this bill, including requirements that the licensee must provide a free hardcopy every year if requested and must follow-up if he or she receives information that an electronic document was not received.
If a record must be sent by certified or registered mail, the insurer will also be required to obtain proof of “actual receipt” to verify that the document was delivered. The bill specifies the evidence necessary to show actual receipt, such as a returned electronic receipt or signature, or record showing the consumer logged onto a website and downloaded the document. Although notices of cancelation may be sent by first-class mail, they are excluded by ESIGN and UETA. This bill would allow an insurer to send notices of cancelation electronically so long as it can prove receipt in the same manner.
If a licensee habitually fails to follow the standards and procedures in this bill, CDI would be authorized to suspend the licensee from engaging in electronic transaction.
Prior Legislation
SB 820 (Sher, Chapter 428, Statutes of 1999) enacted UETA based on the model act adopted by the National Conference of Commissioners on Uniform State Laws.
AB 328 (C. Calderon, Chapter 433, Statutes 2009) authorized electronic transmission of specified documents, such as the notice of reasons for refusal to issue a good driver policy and the notice of the reasons for cancelling an automobile insurance policy, related to property and casualty lines.
SB 251 (R. Calderon, Chapter 369, Statutes of 2013) authorized electronic transmission of offers of renewals and conditional renewals related to property and casualty lines.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Association of California Life and Health Insurance Companies (co-source)
Department of Insurance (co-source)
American Council of Life Insurers
None received
ARGUMENTS IN SUPPORT: According to the author, AB 1131 will further modernize California’s e-commerce law for life insurance and annuities which are otherwise authorized pursuant to California’s version of the UETA, the California Insurance Code, and the federal ESIGN framework.
ASSEMBLY FLOOR: 76-0, 5/26/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Bloom, Chávez, Harper, Mathis
Prepared by: Hugh Slayden / INS. / (916) 651-4110
9/2/15 12:29:06
**** END ****
AB 1131
Page 6
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Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1131
Amended: 8/18/15 in Senate
SENATE INSURANCE COMMITTEE: 8-0, 7/8/15
AYES: Roth, Gaines, Berryhill, Glazer, Hall, Hernandez, Liu, Wieckowski
NO VOTE RECORDED: Mitchell
SENATE JUDICIARY COMMITTEE: 7-0, 7/14/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 5/26/15 (Consent) - See last page for vote
SUBJECT: Insurance: electronic transmission
SOURCE: Association of California Life and Health Insurance Companies
Department of Insurance
DIGEST: This bill permits life insurance carriers, agents and brokers to send documents and conduct transactions related to life insurance and annuities electronically.
Existing law:
Codifies the Uniform Electronic Transactions Act (UETA) which provides that a record or signature cannot be denied legal effect or enforceability because it is in electronic form provided that the transaction complies with specified standards and principles.
Exempts types of transactions or classes of records related to specified Insurance Code sections from being conducted under UETA.
This bill:
Applies UETA (by eliminating the exemption) to the following:
Notices included or attached to individual policies or annuities that disclose the period in which the applicant has the right to return the policy without penalty (“free look period”) (Ins. Code §§ 786, 10127.7, 10127.9, 10127.10.)
A notice of premium increase for individual policies. (Ins. Code § 10113.7.)
Notices and signed statements regarding replacement policies and annuities. (Ins. Code §§ 10509.4 and 10509.7.)
Defines “licensee” as an insurer, agent, broker, or any other person who is required to be licensed by California Department of Insurance (CDI).
Requires the licensee to document the consumer’s consent to engage in electronic transactions, as specified, and retain documentation while the policy is in force and at least five years thereafter.
Requires a licensee to disclose to the consumer the following:
The option to receive records electronically is voluntary.
The consumer may opt-out at any time and a description of the opt-out process.
A description of the documents to be received electronically.
The process to change the consumer’s email address.
The licensee's contact information, including phone number and Internet Web site address.
Requires the licensee to provide, upon request of the consumer, a hard copy of any life insurance document free of charge once per year.
Requires that the consumer’s email address be placed on the consent disclosure and, if provided, an annual statement.
Prohibits charging a fee or offering a discount based on a consumer's willingness to accept electronic documents.
Requires the licensee to confirm the email address of any consumer who elected to receive life insurance documents electronically if more than 12 months have elapsed since the last electronic communication with the consumer.
Requires the insurer to follow-up with the consumer within five business days, as specified, if the licensee receives information that the record was not received.
Establishes that the following records, if not otherwise prohibited due to formatting, placement, or other restrictions, may be sent electronically:
Records sent by first class or regular mail.
Records not subject to a particular delivery method.
Records sent in compliance with the Insurance Information and Privacy Protection Act (Ins. Code §§ Section 791 et seq.)
Establishes that the following records, if not excluded from UETA, may be sent electronically if not otherwise prohibited by other law if the licensee maintains a system or process that can demonstrate actual receipt of a document:
Records sent by registered or certified mail.
Records sent by any method requiring return receipt or signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person.
Notices of termination or nonrenewal.
Provides that acceptable proof of actual receipt includes any of the following:
An electronic receipt returned by the consumer or electronic signature executed by the consumer.
A confirmation receipt or some other evidence that the person received the email in his or her email account and opened the email.
Evidence demonstrating that the person logged onto the licensee’s secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
Requires the licensee to send a hardcopy of any document for which a written acknowledgment of receipt is required if the licensee cannot demonstrate that the electronic document was actually received.
Provides that even if a life insurance transaction is excluded from UETA by Section 1633.3(b)(4) of the Civil Code (documents that must be separately signed), any statutory requirement for a separate acknowledgment, signature, or initial may be transacted using an electronic signature or by electronic transaction so long as the requirement is not specifically excluded from UETA and the licensee complies with all applicable provisions of this bill.
Exempts an insurance agent or broker from civil liability for any deficiency in the electronic procedures agreed to by the parties if the insurance agent or broker meets various requirements, including that the agent or broker has not engaged in negligent, reckless, or intentional tortious conduct.
Requires the Insurance Commissioner (IC) to report to the Governor and the Legislature regarding the impact and implementation of the bill on or before January 1, 2020.
Permits CDI to suspend the authority of a licensee to transmit life insurance records electronically if CDI can establish a pattern or practice that demonstrates a lack of compliance with the provisions of this bill.
Sunsets the bill effective January 1, 2021.
Background
Some types of agreements and transactions are only enforceable if they are in writing. Most electronic transactions are recognized as the equivalent of paper transaction as provided by the Uniform Electronic Transactions Act (UETA) enacted in 1999 and the federal Electronic Records and Signatures in Global and National Commerce Act (ESIGN) enacted in 2000. Both laws provide that electronic transactions and signatures satisfy writing requirements so long as both parties consent (“opt-in”) and follow some basic rules. Both acts also have provisions that allow for certain exceptions.
When electronic commerce was still young, electronic delivery was seen as unreliable. This led to California adopt numerous exceptions to UETA in 1999, including many insurance-related documents. Now many consumers rely on their cell phones, computers, and other devices to manage their affairs. This bill specifically applies UETA to the purchase of life insurance (including annuities), notices related to life insurance, and notices of cancelation of life insurance. This bill also authorizes other types of transactions generally so long as the transaction meets specified standards.
Consistent with UETA and ESIGN, this bill imposes duties for electronic delivery based on the prescribed hardcopy delivery method. For regular or first-class mail, the basic UETA rules apply along with additional safeguards established in this bill, including requirements that the licensee must provide a free hardcopy every year if requested and must follow-up if he or she receives information that an electronic document was not received.
If a record must be sent by certified or registered mail, the insurer will also be required to obtain proof of “actual receipt” to verify that the document was delivered. The bill specifies the evidence necessary to show actual receipt, such as a returned electronic receipt or signature, or record showing the consumer logged onto a website and downloaded the document. Although notices of cancelation may be sent by first-class mail, they are excluded by ESIGN and UETA. This bill would allow an insurer to send notices of cancelation electronically so long as it can prove receipt in the same manner.
If a licensee habitually fails to follow the standards and procedures in this bill, CDI would be authorized to suspend the licensee from engaging in electronic transaction.
Recent amendments clarify that the word “person” includes individuals, such as the policyholder and applicant to whom certain notices must be sent, since the definitions provided by the Insurance Code and UETA focus on business entities. Recent amendments also make clear that California law is consistent with ESIGN regarding agent and broker liability related to electronic transactions.
Prior Legislation
SB 820 (Sher, Chapter 428, Statutes of 1999) enacted UETA based on the model act adopted by the National Conference of Commissioners on Uniform State Laws.
AB 328 (C. Calderon, Chapter 433, Statutes 2009) authorized electronic transmission of specified documents, such as the notice of reasons for refusal to issue a good driver policy and the notice of the reasons for cancelling an automobile insurance policy, related to property and casualty lines.
SB 251 (R. Calderon, Chapter 369, Statutes of 2013) authorized electronic transmission of offers of renewals and conditional renewals related to property and casualty lines.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
Association of California Life and Health Insurance Companies (co-source)
Department of Insurance (co-source)
American Council of Life Insurers
OPPOSITION: (Verified 8/19/15)
None received
ARGUMENTS IN SUPPORT: According to the author, AB 1131 will further modernize California’s e-commerce law for life insurance and annuities which are otherwise authorized pursuant to California’s version of the UETA, the California Insurance Code, and the federal ESIGN framework.
ASSEMBLY FLOOR: 76-0, 5/26/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Bloom, Chávez, Harper, Mathis
Prepared by: Hugh Slayden / INS. / (916) 651-4110
8/19/15 21:04:43
AB 1131 (Dababneh)
Page 20 of 20
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 1131 (Dababneh)
Version: June 29, 2015
Hearing Date: July 14, 2015
Fiscal: Yes
Urgency: No
TMW
SUBJECT
Insurance: electronic transmission
DESCRIPTION
This bill, until January 1, 2021, would authorize an insurer, agent, broker, or any other person required to be licensed by the California Department of Insurance, to send individual life insurance and annuity records by electronic transmission. This bill would expand the scope of electronic notice provisions under the California Uniform Electronic Transactions Act (UETA) by allowing the above licensees to send a life insurance or annuity written record by electronic transmission, if not specifically excluded under UETA, and if the licensee meets specified requirements. This bill would also require the Insurance Commissioner to submit a report, as specified.
BACKGROUND
In 1999, based on the model law proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) to set rules by which electronic commerce may be conducted across the country, California enacted the Uniform Electronic Transactions Act (UETA). (SB 820 (Sher, Ch. 428, Stats. 1999).) One of the critical motivators for enacting a law validating electronic records was the Statute of Frauds, which requires that certain contracts be in writing.
In California, the Statute of Frauds is codified at Section 1624 of the Civil Code, which expressly states that certain contracts are invalid (i.e. unenforceable) unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent. Such contracts include, for example, an agreement that by its terms is not to be performed within a year from the making thereof; an agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; or specified contracts, promises, undertakings, or commitments to loan money or to grant or extend credit, in an amount greater than $100,000.
California’s UETA provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form, that a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation, and that an electronic record or signature satisfies a requirement in the law that a record be in writing or a signature be affixed or if a law provides consequences if there is no record or signature.
UETA, however, does not apply to all contracts. For example, expressly excluded from UETA are transactions that are subject to a law governing the creation and execution of wills, codicils, or testamentary trusts; specified transactions in the Uniform Commercial Code, that were specifically drafted in consideration of electronic records; and transactions subject to a law that requires that specifically identifiable text or disclosures in a record or a portion of a record be separately signed, including initialed, from the record (such as real estate transactions).
Various specified insurance transactions are prohibited from UETA. However, beginning in 2009, specific insurance transactions were removed from UETA’s prohibited statute list, thereby authorizing these transactions to be made electronically. AB 328 (C. Calderon, Chapter 433, Statutes 2009) authorized electronic transmission of certain notices that otherwise would require a mailing, upon agreement by the policyholder to receive the electronic communication, including notice of reasons for refusal to issue a good driver policy pursuant to Proposition 103, notice of the reasons for cancelling an automobile insurance policy, notice of the right of a homeowner to purchase earthquake coverage from or as arranged by the homeowner’s insurer, or the proof of mailing this notice, and the standard residential property insurance disclosure that sets forth the various types of homeowners’ insurance policies.
Then in 2013, SB 251 (Calderon, Chapter 369, Statutes of 2013) removed from the prohibited statutes list under UETA and authorized electronic transmission of certain notices pertaining to workers’ compensation insurance, the offer of renewal required for personal auto, real and personal property, and liability insurance policies, the notice of conditional renewal for commercial insurance policies, and the offer of renewal and certain disclosures related to earthquake insurance, so long as the insurer complies with the specified provisions of UETA and additional procedures and standards. SB 251 requires the Department of Insurance to submit a report, on or before January 1, 2018, to the Governor and to the Committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures, as specified. SB 251 sunsets on January 1, 2019.
This bill now seeks to permit the electronic transmission of specified records related to individual life insurance and annuity contracts, as specified.
This bill was heard by the Senate Insurance Committee on July 8, 2015, and was approved by a vote of 8-0.
CHANGES TO EXISTING LAW
Existing federal law, the Electronic Signatures in Global and National Commerce Act (E-SIGN), generally provides for the transmission of electronic signatures, but does not apply to a contract or other record that is governed by: (1) a statute, regulation, or other rule of law governing the creation and execution of wills, codicils, or testamentary trusts; (2) a state statute, regulation, or other rule of law governing adoption, divorce, or other matters of family law; or (3) the Uniform Commercial Code, as in effect in any State, as specified. (15 U.S.C. Secs. 7001, 7003(a).)
Existing federal law also excludes the following specific transactions from electronic transmission: (1) court orders or notices, or official court documents (including briefs, pleadings, and other writings) required to be executed in connection with court proceedings; (2) any notice of (A) the cancellation or termination of utility services (including water, heat, and power), (B) default, acceleration, repossession, foreclosure, or eviction, or the right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual, (C) the cancellation or termination of health insurance or benefits or life insurance benefits (excluding annuities), or (D) recall of a product, or material failure of a product, that risks endangering health or safety; or (3) any document required to accompany any transportation or handling of hazardous materials, pesticides, or other toxic or dangerous materials. (15 U.S.C. Sec. 7003(b).)
Existing law, the Uniform Electronic Transactions Act (UETA), generally authorizes the transaction of business, commerce and contracts by electronic means. (Civ. Code Sec. 1633.1.) UETA does not apply to transactions that are subject to certain laws, such as laws governing the creation and execution of wills, codicils, or testamentary trusts. (Civ. Code Sec. 1633.3(a).) In addition, UETA does not apply to specific transactions described under various statutes, including:
notices that disclose the period in which the applicant has the right to return the policy without penalty (“free look period”) included or attached to the following:
individual and group disability insurance policies and certificates, and all group life insurance or annuity policies and certificates offered for sale to individuals age 65 or older in California (under Ins. Code Sec. 786);
individual life insurance policies with a face value of $10,000 or less (under Ins. Code Sec. 10127.7);
individual life insurance policies issued on and after January 1, 1990 (under Ins. Code Sec. 10127.9); and
individual life insurance and individual annuity contracts that are initially delivered or issued for delivery to a senior citizen in California on and after July 1, 2004 (under Ins. Code Sec. 10127.10);
a notice of premium increase for individual life insurance policies (Ins. Code Sec. 10113.7); and
notices and signed statements regarding replacement life insurance and annuity policies (under Ins. Code Secs. 10509.4, 10509.7). (Civ. Code Sec. 1633.3(b).)
Existing law provides that UETA applies only to a transaction between parties each of which has agreed to conduct the transaction by electronic means, as specified. (Civ. Code Sec. 1633.5(b).)
Existing law provides that, except as otherwise provided in UETA, the effect of any of its provisions may be varied by agreement. (Civ. Code Sec. 1633.5(d).)
Existing law sets forth certain principles governing the legal effect of conducting transactions electronically as follows:
a record or signature may not be denied legal effect or enforceability solely because it is in electronic form;
a contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation;
if a law requires a record to be in writing, an electronic record satisfies the law; and
if a law requires a signature, an electronic signature satisfies the law. (Civ. Code Sec. 1633.7.)
Existing law provides that an electronic record or electronic signature is attributable to a person if it was the act of the person, which may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. (Civ. Code Sec. 1633.9(a).)
Existing law provides that the effect of an electronic record or electronic signature attributed to a person is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law. (Civ. Code Sec. 1633.9(b).)
Existing law only applies to a transaction that all parties have agreed to conduct electronically. (Civ. Code Sec. 1633.5(b).) Existing law provides that agreement is determined from the context and surrounding circumstances, including the parties’ conduct. (Id.) Except for a separate and optional agreement whose primary purpose is to authorize a transaction to be conducted electronically, an agreement to conduct a transaction by electronic means may not be contained in a standard form contract that is not an electronic record. (Id.) An agreement in such a standard form contract may not be conditioned on an agreement to conduct transactions by electronic means. (Id.) Further, an agreement to conduct a transaction electronically may not be inferred solely from the fact that a party has used electronic means to pay an account or register a purchase or warranty. (Id.) Existing law provides that these provisions may not be varied by agreement. (Id.)
Existing law allows a party that agrees to conduct a transaction electronically to refuse to conduct other transactions by electronic means. (Civ. Code Sec. 1633.5(c).) If a seller sells goods or services by both electronic and non-electronic means and a buyer purchases the goods or services by conducting the transaction electronically, the buyer may refuse to conduct further transactions regarding the goods or services by electronic means. (Id.) Existing law provides that these provisions may not be varied by agreement. (Id.)
Existing law provides that a party to an agreement to conduct a transaction electronically may satisfy a law requiring that information be provided, sent, or delivered by one person to another in writing by providing, sending, or delivering the information in an electronic record capable of retention by the recipient at the time of receipt. (Civ. Code Sec. 1633.8(a).) Existing law provides that an electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record. (Id.)
Existing law provides that if a law other than UETA requires that a notice of the right to cancel be provided or sent, an electronic record may not substitute for a writing under that other law unless, in addition to satisfying the requirements of that other law and UETA, the notice of cancellation may be returned by electronic means. (Civ. Code Sec. 1633.16.) Existing law provides that this provision may not be varied by agreement. (Id.)
Existing law provides for the issuance of life insurance, which includes insurance upon the lives of persons or appertaining thereto, and the granting, purchasing, or disposing of annuities. (Ins. Code Sec. 101.)
Existing law, the Insurance Information and Privacy Protection Act (IIPPA), requires insurers to send specified privacy notices to insurance policy holders in writing with all of the following information:
whether personal information may be collected from persons other than the individual or individuals proposed for coverage;
the types of personal information that may be collected and the types of sources and investigative techniques that may be used to collect such information;
the types of disclosures to additional parties, as specified, and the circumstances under which the disclosures may be made without prior authorization, except that only those circumstances need be described which occur with such frequency as to indicate a general business practice;
a description of the rights to access, correct, or delete recorded personal information about the individual and the manner in which the rights may be exercised; and
that information obtained from a report prepared by an insurance-support organization may be retained by the insurance-support organization and disclosed to other persons. (Ins. Code Sec. 791.04(b).)
Existing law, in lieu of the above notice, authorizes the insurance institution or agent to provide an abbreviated notice informing the insurance applicant or policyholder of the following:
personal information may be collected from persons other than the individual or individuals proposed for coverage;
such information as well as other personal or privileged information subsequently collected by the insurance institution or agent may in certain circumstances be disclosed to third parties without authorization;
a right of access and correction exists with respect to all personal information collected; and
the notice prescribed above will be furnished to the applicant or policyholder upon request. (Ins. Code Sec. 791.04(c).)
Existing law provides that, unless expressly otherwise provided, any notice relating to insurance required to be given to any person may be given by mailing notice, postage prepaid, addressed to the person to be notified at his or her residence or principal place of business in California. (Ins. Code Sec. 38.) Further, the affidavit of the person who mails the notice, stating the facts of such mailing, is prima facie evidence that the notice was thus mailed. (Id.)
Existing law authorizes a written notice to be provided electronically, as specified, relating to the following transactions:
any insurance on risks or on operations in California regarding workers’ compensation insurance (under Ins. Code Sec. 1851(f));
written offers to renew or nonrenew an automobile policy (under Ins. Code Sec. 663);
renewal offers and notices of nonrenewal of real or personal property or personal injury policies (under Ins. Code Sec. 678);
commercial policy nonrenewal or conditional renewal notices (under Ins. Code Sec. 678.1); and
notices of modified earthquake coverage at renewal (under Ins. Code Sec. 10086). (Ins. Code Sec. 38.5(a).)
Existing law requires insurers to maintain a system for electronically confirming a policyholder’s decision to opt in to an agreement to conduct transactions electronically and a system that will allow the policyholder to electronically opt out of the agreement to conduct business electronically, as specified under UETA. (Ins. Code Sec. 38.8.)
This bill would remove the following insurance transactions from the list of prohibited statutes, thereby authorizing the electronic transmission of the following records:
notices that disclose the period in which the applicant has the right to return the policy without penalty (“free look period”) included or attached to the following:
all group life insurance or annuity policies and certificates offered for sale to individuals age 65 or older in California (under Ins. Code Sec. 786);
individual life insurance policies with a face value of $10,000 or less (under Ins. Code Sec. 10127.7);
individual life insurance policies issued on and after January 1, 1990 (under Ins. Code sec. 10127.9);
individual life insurance and individual annuity contracts that are initially delivered or issued for delivery to a senior citizen in California on and after July 1, 2004 (under Ins. Code Sec. 10127.10);
notice of premium increases for individual life insurance policies (Ins. Code Sec. 10113.7); and
notices and signed statements regarding replacement life insurance and annuity policies (under Ins. Code Secs. 10509.4, 10509.7). (Civ. Code Sec. 1633.3(b).)
This bill would authorize any written record required to be given or mailed to any person by a licensee relating to the business of life insurance, which includes insurance annuities, may, if not prohibited by UETA, be provided by electronic transmission if each party has agreed to conduct the transaction by electronic means pursuant to UETA, and if the licensee complies with the provisions of this bill.
This bill would provide that a valid electronic signature would be sufficient for any provision of law requiring a written signature.
This bill, for the electronic transmission provisions enacted by this bill, would apply the definitions under UETA, and provide that the term “licensee” means an insurer, agent, broker, or any other person who is required to be licensed by the Department of Insurance (department).
This bill, in order to transmit a life insurance record electronically, would require a licensee to comply with all of the following:
a licensee, or licensee’s representative, acquires the consent of the person to opt in to receive the record by electronic transmission, and the person has not withdrawn that consent, prior to providing the record by electronic transmission; a person’s consent may be acquired verbally, in writing, or electronically, and if consent is acquired verbally, the licensee would be required to confirm consent in writing or electronically, and the licensee would be required to retain a record of the person’s consent to receive the record by electronic transmission with the policy information so that it is retrievable upon request by the department while the policy is in force and for five years thereafter;
a licensee discloses, in writing or electronically, to the person all of the following:
the opt in to receive the record by electronic transmission is voluntary;
that the person may opt out of receiving the record by electronic transmission at any time, and the process or system for the person to opt out;
a description of the record that the person will receive by electronic transmission;
the process or system to report a change or correction in the person’s email address; and
the licensee’s contact information, which includes, but is not limited to, a toll-free number or the licensee’s Internet Web site address;
the opt-in consent disclosure would be authorized to be set forth in the application or in a separate document that is part of the policy approved by the Insurance Commissioner (commissioner) and would be required to be bolded or otherwise set forth in a conspicuous manner, and require the person’s signature to be set forth immediately below the opt-in consent disclosure; if the licensee seeks consent at any time prior to the completion of the application, the consent and signature would be required to be obtained before the application is completed, but the person has not opted in at the time the application is completed, the licensee may receive the opt-in consent at any time thereafter, pursuant to the same opt in requirements that apply at the time of the application, and the licensee would be required to retain a copy of the signed opt-in consent disclosure with the policy information so that each is retrievable upon request by the department while the policy is in force and for five years thereafter;
the email address of the person who has consented to electronic transmission would be required to be set forth on the consent disclosure, and if the person who consented receives an annual statement, the email address of the person who has consented must be set forth on that record;
the licensee would be required annually to provide one free printed copy of any record described in this subdivision upon request by the person;
if a licensee is otherwise required to transmit a record by first class mail, regular mail, by an unspecified method of delivery, or is a record that is required to be provided pursuant to the IIPPA, and if the licensee is not otherwise prohibited from transmitting the record electronically under UETA, then the record could be transmitted by electronic transmission if the licensee complies with all of the requirements for the methods of sending electronic transmissions under UETA;
notwithstanding UETA, if a licensee is otherwise required to transmit a record by return receipt, registered mail, certified mail, signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person, and if the licensee is not otherwise prohibited from transmitting the record electronically UETA and this bill, then the licensee would be required to maintain a process or system that demonstrates proof of delivery and actual receipt of the record by the person consistent with this paragraph; the licensee would be required to document and retain information demonstrating delivery and actual receipt so that it is retrievable, upon request, by the department at least five years after the policy is no longer in force, and the record provided by electronic transmission would be treated as if actually received if the licensee delivers the record to the person in compliance with applicable statutory delivery deadlines; a licensee may demonstrate actual delivery and receipt by any of the following:
the person acknowledges receipt of the electronic transmission of the record by returning an electronic receipt or by executing an electronic signature;
the record is made part of, or attached to, an email sent to the email address designated by the person, and there is a confirmation receipt, or some other evidence that the person received the email in his or her email account and opened the email;
the record is posted on the licensee’s secure Internet Web site, and there is evidence demonstrating that the person logged onto the licensee’s secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record; or
if a licensee is unable to demonstrate actual delivery and receipt, the licensee would be required to resend the record by regular mail to the person in the manner originally specified;
notwithstanding any other law, a notice of lapse, nonrenewal, cancellation, or termination of any product under this bill may be transmitted electronically if the licensee demonstrates proof of delivery, as specified, and complies with the other provisions for delivery in this bill;
if the record is not delivered directly to the electronic address designated by the person but placed at an electronic address accessible to the person, a licensee would be required to notify the person in plain, clear, and conspicuous language at the electronic address designated by the person that describes the record, informs that person that it is available at another location, and provides instructions to the person as to how to obtain the record;
upon a licensee receiving information indicating that the record sent by electronic transmission was not received by the person, the licensee, within five business days, would be required to either contact the person to confirm or update the person’s email address and resend the record by electronic transmission, as specified, or resend the record initially provided by electronic transmission by regular mail to the insured at the address shown on the policy, as specified; if the licensee sends the first electronic record within the time period required by law and the licensee complies, as specified, the record sent would be treated as if mailed in compliance with the applicable statutory regular mail delivery deadlines;
the licensee would be prohibited from charging any person who declines to opt in to receive a record through electronic transmission from receiving a record electronically, and prohibit the licensee from providing a discount or an incentive to any person to opt in to receive electronic records; and
the licensee would be required to verify a person’s email address via a paper writing sent by regular mail when more than 12 months have elapsed since the licensee’s last electronic communication.
This bill, on or before January 1, 2020, would require the commissioner to submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of certain insurance renewal offers, notices, or disclosures as authorized. The report would be required to include input from insurers, consumers, and consumer organizations, and include an assessment of the department’s experience pertaining to the authorization of the electronic transmission of insurance renewals as authorized.
This bill, notwithstanding UETA, for any policy of life insurance, as defined, would provide that any statutory requirement for a separate acknowledgment, signature, or initial, which is not expressly prohibited by UETA, may be transacted using an electronic signature, or by electronic transaction, subject to all applicable provisions.
This bill would authorize the department to suspend a licensee from providing records by electronic transmission if there is a pattern or practices that demonstrate the licensee has failed to comply with the requirements of this section.
This bill would authorize a licensee to appeal a suspension and resume its electronic transmission of records upon communication from the department that the changes the licensee made to its process or system to comply with the specified requirements are satisfactory.
This bill would sunset on January 1, 2021, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
COMMENT
1. Stated need for the bill
The author writes:
While California has enacted e-Commerce legislation that largely follows the principles under federal [Electronic Signatures in Global and National Commerce Act (E-SIGN)] and [the Uniform Electronic Transactions Act (UETA)], a small number of documents required to be delivered under the Insurance Code, referenced in Civil Code 1633.3, could be interpreted as requiring a paper-based delivery process or a “wet signature” requirement. This has prevented the life insurers, among others, from implementing a completely electronic sales process, presenting challenges to customers and agents, and undermining the benefits to insurers and consumers of full electronic processing.
Current law must be updated to allow broader use of voluntary e-delivery and e-signature of life insurance documents. Customers voluntarily opt in only after being fully informed of all their options and rights. In advancing this legislation, the life insurance industry is attempting to meet the increasing demand of California consumers to conduct business electronically, and, in so doing, to take advantage of the convenience of e-delivery and e-signatures in obtaining, and keeping track of, life insurance coverage. All existing consumer protections and rights to cancel under current law remain intact. The bill also provides for heightened delivery requirements for certain documents, as well as record-retention requirements that are consistent with existing California law.
In addition, the Department of Insurance [DOI] will also be able to evaluate the impact and implementation of the electronic transmission of these documents and include its findings in a report. This authorization will also expire unless a later enacted statute deletes or extends the authorization.
AB 1131 will further modernize California’s e-Commerce law for life insurance, annuities, disability insurance and LTC transactions[,] which are otherwise authorized pursuant to California’s version of [UETA] statutes[,] the [California] Insurance Code, and the federal E-SIGN framework. Specifically this bill will allow certain insurers to transact specified insurance related business electronically in lieu of mailing them with the prior opt-in consent of the consumer so long as the insurer complies with the specified provisions of state and federal law and additional procedures and standards.
Lack of information on how existing electronic insurance notices are working under SB 251
Two years ago, SB 251 (Calderon, Chapter 369, Statutes of 2013) similarly removed from the prohibited statutes list under UETA and authorized electronic transmission of certain notices pertaining to workers’ compensation insurance, personal auto, real and personal property, and liability insurance policies, commercial insurance policies, and earthquake insurance. SB 251 required DOI to submit a report, on or before January 1, 2018, to the Governor and to the Committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding the impact and implementation of the authorization of the electronic transmission of these notices. However, because the required date for the report is over two years away, no information has been fully compiled by DOI or provided to the Legislature. DOI expects to complete a survey of all property and casualty insurers to ascertain with specificity whether and to what degree they are expanding the use of electronic transactions permitted under SB 251, and DOI expects to complete this survey later this summer.
This bill seeks to exempt several more insurance notices from the UETA prohibition. Yet, it is difficult to ascertain whether the changes made by SB 251 are working effectively and appropriately protecting consumers; therefore, it is uncertain as to whether it is appropriate to remove life insurance and annuity notices for the prohibited transactions list under UETA.
Federal preemption by E-SIGN
On June 30, 2000, the same year that California’s UETA went into effect, E-SIGN was signed into law and established legal parity between electronic records and signatures and their paper and ink counterparts. (R. A. Wittie, J. K. Winn, Electronic Records and Signatures Under the Federal E-SIGN Legislation and the UETA <http://www.law. washington.edu/Directory/docs/Winn/Electronic%20Records%20and%20Signatures.htm> [as of July 8, 2015].)
E-SIGN specifically applies to insurance: “It is the specific intent of the Congress that this title and title II apply to the business of insurance.” (15 U.S.C. Sec. 7001(i).) E-SIGN also specifically prohibits any notice of the cancellation or termination of life insurance benefits. (15 U.S.C. Sec. 7003(b)(2)(C).) This provision directly conflicts with the exemptions provided under this bill from the existing UETA prohibition on electronic transmission of life insurance and annuity cancellation notices; as such, these exemptions may be preempted by federal law.
As discussed by the California Law Revision Commission (CLRC) when it undertook the study of adopting the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (UAGPPJA), subsequently enacted by SB 940 (Jackson, Chapter 553, Statutes of 2014), the CLRC noted the following issues of whether a state law could be preempted by E-SIGN:
Subsection (a) of E-SIGN Section 102 governs preemption generally; the remainder of Section 102 appears irrelevant for present purposes. As codified, subsection (a) creates a two-prong test for determining whether a state law is exempt from E-SIGN preemption, and thus may effectively modify E-SIGN’s requirements for electronic transactions. [Citation omitted.]
Under the first prong (paragraph (a)(1)), a state’s enactment or adoption of the final version of UETA may, subject to certain exceptions, “modify, limit, or supersede” the requirements of E-SIGN Section 101 (15 U.S.C. [Sec.] 7001). In other words, in specified circumstances a state’s enactment or adoption of UETA is not preempted by E-SIGN.
Under the second prong (paragraph (a)(2)), a state law may effectively specify alternative procedures or requirements for electronic transactions if all of the following requirements are met:
(1) Those alternative procedures or requirements are consistent with E-SIGN.
(2) As compared to E-SIGN, those procedures or requirements do not require or give greater legal status or effect to implementation or application of a specific technology or technical specification for the functions of creating, storing, generating, receiving, communicating, or authenticating electronic records or electronic signatures.
(3) The state law specifically refers to E-SIGN.
In other words, a state law may deviate from E-SIGN’s requirements for electronic records without being preempted if it satisfies all of the above criteria.
By its terms, the preemption exemption provided by E-SIGN Section 102(a) applies only to the requirements in E-SIGN Section 101 (15 U.S.C. [Sec.] 7001).
. . .
After the enactment of E-SIGN, [the Uniform Law Commission (ULC)] took steps to protect its uniform laws from E-SIGN preemption claims. To meet the second prong of E-SIGN’s preemption test and provide a defense against such claims, ULC created a standard provision (known as “the Standard Section”) for its uniform acts that
provide for electronic records, agreements, or signatures.
. . .
The Standard Section has already been included in a number of uniform acts enacted by California, including the Uniform Anatomical Gift Act (Health & Safety Code [Sec.] 7151.30), Uniform Commercial Code (Com. Code [Sec.] 1108), Uniform Limited Partnership Act of 2008 (Corp. Code [Sec.] 15912.03), Uniform Prudent Management of Institutional Funds Act (Prob. Code [Sec.] 18509), Revised Uniform Limited Liability Company Act (Corp. Code [Sec.] 17713.02), and Uniform Electronic Legal Material Act (Gov’t Code [Sec.] 10300.) (Study L-750, Staff Memorandum 2013-14, Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act: E-SIGN (Mar. 28, 2013) Cal. Law Revision Comm. <http://www.clrc.ca.gov/pub/2013/ MM13-14.pdf> [as of July 8, 2015] pp. 7-9.)
This bill would supersede the prior version of UETA and specifically authorize the electronic transmission of life insurance benefit cancellation notices in direct conflict with E-SIGN, and does not provide for the Standard Section, which is being included in other uniform laws adopted by California. Accordingly, because federal law prohibits electronic transmission of life insurance policy cancellation notices, depending upon whether the notice of right to cancel is considered a notice for cancellation purposes, and this bill does not properly comply with the federal procedures regarding preemption, it is possible this bill would be preempted by federal law.
Consumer protections in UETA
California enacted its own version of UETA in 1999, shortly before the draft UETA was finalized and submitted by NCCUSL for adoption in all states. California’s version of UETA includes specified notice exclusions that vary from those found in the NCCUSL version.
DOI asserts that existing law allows some life insurance and annuity notices to be provided electronically while others are prohibited from UETA, and this “[t]his leaves some transactions prohibited and some permitted, with policyholders/annuitants receiving some notices by hard copy and some electronically. One aspect of the bill is to avoid potential confusion as to how the consumer is to receive records and permit all aspects of life/annuity transactions by electronic means. However, in doing so, the insurer must comply with all of the UETA law as well as the additional requirements in this bill.”
Consumers Union, which raised consumer protection concerns and worked extensively on SB 820, which enacted the California UETA, continues to have concerns with the various UETA statutes enacted in various states because they are not as protective as E-SIGN. (See Sen. Com. on Judiciary, Analysis of Sen. Bill No. 820 (1998-1999 Reg. Session) as amended May 6, 1999, p. 6; Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business analysis of Sen. Bill No. 820 (1998-1999 Reg. Sess.) as amended Sept. 3, 1999, p. 4.) According to the Consumers Union:
E-Sign and UETA are similar in many respects, but they are not at all similar in the way they treat consumers. In consumer transactions, E-Sign requires a specific and electronic consent process before an electronic notice may replace a legally required written notice. UETA merely requires that the parties agree to conduct transactions by electronic means, but does not specify how that agreement is to be proven. Instead, UETA states that agreement is determined from the context and circumstances. UETA’s agreement requirement applies to all types of electronic notices (legal and contractual). UETA undercuts its own basic premise of agreement by permitting the agreement to conduct transactions electronically to be found from the context, including conduct. UETA also permits the agreement for future electronic notices to be given only on paper. UETA does not exempt any categories of consumer notices.
(1) The need for consumer protection: Electronic records, however, present special problems in a consumer context. Unlike mail, which all consumers have for free, over two thirds of the households in the U.S. still are not connected to the Internet. Yet, under UETA consumers in face-to-face transactions could be asked to sign paper documents agreeing to receive all documents relating to the transaction — both currently and in the future — on-line. This could be construed to be legal even if the consumer does not have ready access to a computer.
There are considerable problems even for consumers who have computers. Consumers commonly receive mail every day[;] many people do not check email on a regular basis. Unlike mail, where filing a forwarding address with the post office is easy, there is no system for forwarding email when a consumer switches internet providers. Unlike mail, where everyone has a residence address somewhere, many consumers discontinue email accounts entirely. Unlike mail, which can be opened by opening an envelope, email sometimes comes with attachments which the consumer’s computer cannot read (and, indeed, we are sometimes warned not to open unfamiliar attachments because of the risk of viruses). All of these factors counsel that we exercise caution in limiting consumer rights based on the assumption that consumers have received everything that has been emailed to them. (The Need to Protect Consumers – Especially Low-Income Consumers – from UETA, Consumers Union <http://consumersunion.org/news/the-need-to-protect-consumers-especially-low-income-consumers-from-ueta/> [as of July 8, 2015].)
Yet, the notices of cancellation for life insurance and annuity policies, which includes the statutes created to protect senior policyholders age 65 and older, that this bill would exempt were specifically included in the UETA prohibition with a host of other consumer protection notices because of the Legislature’s concern when enacting SB 820 that some consumer notices should not be sent electronically. Since DOI has yet to compile information as to whether the exemptions provided under SB 251 are adequately protecting consumers, it may be premature to provide more exemptions before the Legislature can review the effects of the SB 251 exemptions on consumer protections.
Elder financial abuse and annuities
This bill would authorize electronic transmission of right of cancellation notices regarding life insurance and annuities sold to individuals over 65 years old. Although E-SIGN authorizes electronic transmission of annuity notices, California has a long history of legislative efforts to protect predatory practices aimed at elders.
In 2003, the Senate Insurance Committee held an informational hearing entitled “Financial Planning or Fleecing of Seniors?: Insurance Products and Investments.” This hearing highlighted many instances where senior citizens were preyed upon by “Medi-Cal advocates,” who would convince seniors to spend down their assets through the purchase of annuities so that the seniors would qualify for Medi-Cal. These “advocates” received a commission for the sale of the annuity, and the senior purchased a product that may not be appropriate for their life expectancy and financial circumstances.
To combat this financial predatory scheme, in 2008, the Legislature extended consumer protections under the Consumer Legal Remedies Act (CLRA) for unreasonable fees charged for the preparation, assistance, or advice regarding applications for public social services. (SB 1136 (Alquist, Chapter 479, Statutes of 2008).) The CLRA prohibits unfair and deceptive commercial conduct, and authorizes a consumer to commence a civil action for damages resulting from violations of the CLRA. The definition of public social services under the CLRA includes activities and functions of state and local government administered or supervised by the State Department of Public Health or the State Department of Social Services.
In 2007, the United States Department of Veterans Affairs (USDVA) reported that private companies were targeting the elderly at assisted living facilities, and these companies would offer to assist elderly veterans qualify for veteran’s benefits. (Acting Director Bradley G. Mayes, Letter to all VA Regional Offices and Centers, Jan. 3, 2007.) The USDVA noted that companies were charging fees related to veteran’s benefits applications even though these companies had not been authorized by USDVA to perform such services. In order to protect seniors from improper fees associated with veteran’s benefits applications, SB 180 (Corbett, Chapter 79, Statutes of 2011) added to the definition of public social services in the CLRA veteran’s benefits administered by the United States Department of Veterans Affairs and the California Department of Veterans Affairs.
Veterans’ associations around California began reporting an increase in predatory practices on elderly veterans. “Veterans advocates” are offering services to redistribute the veteran’s finances so that the veteran will qualify for the Veterans Aid and Attendance program. As with the Medi-Cal and Medicaid schemes, these “advocates” reorganize a senior veteran’s finances through the purchase of insurance and annuity products that may not be appropriate for the senior veteran’s life expectancy and financial circumstances. To combat these practices, SB 1170 (Leno, Chapter 653, Statutes of 2012) provided senior citizens protection against deceptive insurance advertisements regarding veterans organizations or agencies, added veteran’s benefits assistance advertising and promotions, as specified, to the list of deceptive practices under the Consumer Legal Remedies Act, provided additional disclosure requirements, as specified, for the sale of life insurance and annuities to senior citizens, and prohibited an insurance agent, as specified, from delivering living trusts or other legal documents, other than insurance product documents, to a senior citizen if the purpose of the delivery is to sell an insurance product.
Additionally, AB 689 (Blumenfield, Chapter 295, Statutes of 2011) enacted the Suitability Requirements for Annuity Transactions and, among other things, prohibited an insurer from issuing an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity is suitable based on the consumer’s suitability information, and prohibited a producer and an insurer from recommending to a person 65 years of age or older the sale of an annuity to replace an existing annuity that requires the insured to pay a surrender charge for the annuity that is being replaced, where purchase of the annuity does not confer a substantial financial benefit over the life of the policy to the consumer, so that a reasonable person would believe the purchase is unnecessary.
Just last year, AB 2347 (Gonzalez, Chapter 166, Statutes of 2014) revised the senior disability and life insurance policy 30-day notices to apply to individual and group life insurance products, require the mandated notice explaining the 30-day “free look” period be in 12 point bold print on the front of the policy jacket or on the cover page of the policy, as specified; added individual annuity contracts to the requirement that all individual life insurance policies include a right to return of not less than 10 days nor more than 30 days, as specified, required that mandatory notice to a senior citizen describing the 30-day “free look” period to be on the front of the policy jacket or the cover page, required individual non-variable life insurance policies and non-variable annuity contracts, individual variable life insurance policies and annuity contracts, and immediate annuity contracts sold to senior citizens to include a notice on the front of the policy jacket or cover page in 12 point bold print that describes the 30-day right to return and any surrender charges or penalties, as specified. Concerns regarding appropriate consumer protections for senior groups regarding life insurance and annuity cancellation notices continue to this day. As noted in Comment 4, there are multiple factors regarding the inconsistency of policyholder computer and email use to be considered when limiting consumer rights based on the assumption that, even though the policyholder may initially opt in to receive electronic notices, consumers have received everything that has been emailed to them.
Notably, AB 1747 (Feuer, Chapter 315, Statutes of 2012) requires life insurers to permit policy owners to designate at least one other person (a designee) to receive notices of missed payments and prohibits termination of an individual life insurance policy until that notice has been mailed 30 days prior to the effective date of termination for nonpayment of premium. The insured’s assignee is already authorized to receive these notices electronically. (Ins. Code Sec. 10113.71(b)(3).) Those provisions were enacted to add additional procedural protections to a life insurance policy owner in order to avoid lapse. Similarly, this bill should require the life or annuity insurer to provide the bill’s electronic notices to the insured’s designee and assignee, upon the designee’s or assignee’s consent, respectively, and require the insurer to have an electronic process through which the designee or assignee may electronically communicate to the insurer changes in the designee’s or assignee’s email address.
6. Additional points
E-SIGN makes insurance agents and brokers liable for any deficiency in the electronic procedures agreed to by the parties under the contract if the agent or broker has engaged in negligent, reckless, or intentional tortious conduct, was involved in the development or establishment of such electronic procedures, and the agent or broker deviated from such procedures. (15 USC Sec. 7001(j).) However, neither existing law nor this bill provides these consumer protections, which should be considered by the author and added to this bill to enhance consumer protections.
Also, UETA prohibits sending electronic notices of the right to cancel unless, in addition to satisfying the other law authorizing a particular notice to be transmitted electronically and UETA, the policyholder may return the notice of cancellation by electronic means. (Civ. Code Sec. 1633.16.) Accordingly, this bill should also require the life or annuity insurer to provide the ability for the policyholder to electronically return a notice of cancellation.
Support: None Known
Opposition: None Known
HISTORY
Source: Association of California Life and Health Insurance Companies; California Department of Insurance
Related Pending Legislation: AB 1097 (Holden, 2015) would permit alarm companies, upon the consent of the contracting customer, to execute home solicitation contracts electronically, as specified, and allow for the execution of a notice of cancellation by electronic means pursuant to the Uniform Electronic Transactions Act (UETA).
Prior Legislation:
SB 940 (Jackson, Chapter 553, Statutes of 2014) See Comment 3.
AB 2347 (Gonzalez, Chapter 166, Statutes of 2014) See Comment 5.
SB 251 (R. Calderon, Chapter 369, Statutes of 2013) See Background.
SB 1212 (R. Calderon, 2012) would have authorized an insurer to transmit electronically specified offers of renewal for automobile, property, or commercial insurance, as well as certain liability insurance and notices related to earthquake coverage. SB 1212 was held without action in the Assembly Insurance Committee.
SB 1170 (Leno, Chapter 653, Statutes of 2012) See Comment 5.
AB 1747 (Feuer, Chapter 315, Statutes of 2012) See Comment 5.
SB 715 (Calderon, 2011) would have enacted the Suitability Requirements for Annuity Transactions but was vetoed by Governor Brown because he signed AB 689, a virtually identical bill.
SB 180 (Corbett, Chapter 79, Statutes of 2011) See Comment 5.
AB 689 (Blumenfield, Chapter 295, Statutes of 2011) See Comment 5.
AB 2066 (Jones, 2010) would have required all insurers, brokers, agents, and others engaged in the transaction of insurance who offer to sell an annuity to a senior to disclose to the senior, as defined, all material facts and features of the annuity that he or she knows or reasonably should know are likely to affect the decision of the senior to purchase the annuity, required a written notice with all blanks filled in and initialed by the senior, signed by the senior, in the annuity transaction, would have delineated conditions under which it would be presumptively improper to sell an annuity to a senior; and would have made the sale of an annuity to a senior without fulfilling the written notice requirement or under specified circumstances as presumptively improper, a violation of the duty owed to a prospective insured who is 65 years of age or older of honesty, good faith, and fair dealing. AB 2066 was held in the Assembly Insurance Committee.
AB 328 (C. Calderon, Chapter 433, Statutes 2009) See Background.
SB 1136 (Alquist, Chapter 479, Statutes of 2008) See Comment 5.
SB 820 (Sher, Chapter 428, Statutes of 1999) See Background.
Prior Vote:
Senate Insurance Committee (Ayes 8, Noes 0)
Assembly Floor (Ayes 76, Noes 0)
Assembly Appropriations Committee (Ayes 15, Noes 0)
Assembly Insurance Committee (Ayes 13, Noes 0)
**************
AB 1131 (Dababneh) Page 8 of 8
SENATE COMMITTEE ON INSURANCE
Senator Richard Roth, Chair
2015 - 2016 Regular
Bill No: AB 1131 Hearing Date: July 8, 2015
Author: |
Dababneh |
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Version: |
June 29, 2015 Amended |
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Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Hugh Slayden |
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Subject: Insurance: electronic transmission.
SUMMARY
Permits life insurance carriers, agents and brokers to send documents and conduct transactions related to life insurance and annuities electronically.
DIGEST
Existing law
Codifies the Uniform Electronic Transactions Act (UETA) which provides that a record or signature cannot be denied legal effect or enforceability because it is in electronic form provided that the transaction complies with specified standards and principles.
Exempts types of transactions or classes of records related to specified Insurance Code sections from being conducted under UETA.
This bill
Applies UETA to the following:
Notices included or attached to individual policies or annuities that disclose the period in which the applicant has the right to return the policy without penalty (“free look period”) (Ins. Code §§ 786, 10127.7, 10127.9, 10127.10.)
A notice of premium increase for individual policies. (Ins. Code § 10113.7.)
Notices and signed statements regarding replacement policies and annuities. (Ins. Code §§ 10509.4 and 10509.7.)
Defines “licensee” as an insurer, agent, broker, or any other person who is required to be licensed by California Department of Insurance (CDI).
Requires the licensee to document the consumer’s consent to engage in electronic transactions, as specified, and retain documentation while the policy is in force and at least five years thereafter.
Requires a licensee to disclose to the consumer the following:
The option to receive records electronically is voluntary.
The consumer may opt-out at any time and a description of the opt-out process.
A description of the documents to be received electronically.
The process to change the consumer’s email address.
The licensee's contact information, including phone number and Internet Web site address.
Requires the licensee to provide, upon request of the consumer, a hard copy of any life insurance document free of charge once per year.
Requires that the consumer’s email address be placed on the consent disclosure and, if provided, an annual statement.
Prohibits charging a fee or offering a discount based on a consumer's willingness to accept electronic documents.
Requires the licensee to confirm the email address of any consumer who elected to receive life insurance documents electronically if more than 12 months have elapsed since the last electronic communication with the consumer.
Requires the insurer to follow-up with the consumer within five business days, as specified, if the licensee receives information that the record was not received.
Establishes that the following records, if not excluded from UETA, may be sent electronically if not otherwise prohibited by law:
Records sent by first class or regular mail.
Records not subject to a particular delivery method.
Records sent in compliance with the Insurance Information and Privacy Protection Act (Ins. Code §§ Section 791 et seq.)
Establishes that the following records, if not excluded from UETA, may be sent electronically if not otherwise prohibited by other law if the licensee maintains a system or process that can demonstrate actual receipt of a document:
Records sent by registered or certified mail.
Records sent by any method requiring return receipt or signed written receipt of delivery, or other method of delivery evidencing actual receipt by the person.
Notices of termination or nonrenewal.
Provides that acceptable proof of actual receipt includes any of the following:
An electronic receipt returned by the consumer or electronic signature executed by the consumer.
A confirmation receipt or some other evidence that the person received the email in his or her email account and opened the email.
Evidence demonstrating that the person logged onto the licensee’s secure Internet Web site and downloaded, printed, or otherwise acknowledged receipt of the record.
Provides that even if a life insurance transaction is excluded from UETA by Section 1633.3(b)(4) of the Civil Code (documents that must be separately signed), any statutory requirement for a separate acknowledgment, signature, or initial may be transacted using an electronic signature or by electronic transaction, so long as the requirement is not specifically excluded from UETA by Civil Code Section 1633(c) and the licensee complies with all applicable provisions of this bill.
Requires the licensee to send a hardcopy of any document for which a written acknowledgment of receipt is required if the licensee cannot demonstrate that the electronic document was actually received.
Requires the Insurance Commissioner (IC) to report to the Governor and the Legislature regarding the impact and implementation of the bill on or before January 1, 2020.
Permits CDI to suspend the authority of a licensee to transmit life insurance records electronically if CDI can establish a pattern or practice that demonstrates a lack of compliance with the provisions of this bill.
Sunsets the bill effective January 1, 2021.
COMMENTS
Purpose of the bill According to the author, AB 1131 will further modernize California’s electronic commerce (“e-commerce”) law for life insurance and annuities which are otherwise authorized pursuant to California’s version of the UETA, the California Insurance Code, and the federal ESIGN framework. Specifically, this bill will allow certain insurers to transact specified insurance related business electronically in lieu of mailing them with the prior opt-in consent of the consumer so long as the insurer complies with the specified provisions of state and federal law and additional procedures and standards.
Background Every day, countless electronic transaction occur via email, facsimile, smart phone applications, web pages, and other digital forums. The technology works behind the scenes to facilitate contracts, sales, and other commercial activity, but it is the law that makes agreements “real” and enforceable. Some types of agreements are only enforceable if they are in writing. Not too long ago, “writing” meant ink and paper and it was not clear whether the law recognized agreements formed and memorialized electronically.
In 1999, the National Conference of Commissioners on Uniform State Laws (NCCUSL) adopted the model UETA to establish consistent interstate rules for electronic transactions. SB 820 (Sher), Chapter 428, Statutes of 1999, enacted California’s version of UETA almost immediately afterward. The following year, Congress enacted the Electronic Records and Signatures in Global and National Commerce Act (ESIGN), in part, to encourage the states to adopt UETA in its broadest form and facilitate e-commerce among the states. ESIGN’s preemption provisions bind states that fail to adopt UETA or laws similar to it; ESIGN’s practical effect is to establish UETA as the universal standard.
Back in 1999, many consumers lacked access to, and understanding of e-commerce, and electronic delivery was seen as unreliable. This led to California adopt numerous exceptions to UETA, including many insurance-related documents. Since then, the growing use of electronic devices has made e-commerce inevitable. Many consumers have grown to depend on its flexibility and portability. In fact, postal mail might serve some consumers poorly, including students, frequent travelers, and others who “live away from home.”
Both UETA and ESIGN establish the fundamental principle that a record or signature cannot be denied legal effect or enforceability because it is in electronic form if both parties agree. This means that, with some exceptions, if the parties agree to use an electronic format involving a transaction that requires something “in writing,” the law will treat the electronic format as if it occurred using hardcopy (provided UETA standards are met). This bill addresses some of the exceptions specific to life insurance.
Uniform Electronic Transactions Act. UETA establishes ground rules for parties engaging in e-commerce. The most important rule is that engaging in electronic forms is voluntary. This rule allows the consumer to weigh the benefits and risks of engaging in e-commerce and choose what is best for them based on their lifestyle and experience.
UETA also recognizes that the underlying law might treat certain transactions with special consideration. For instance, UETA leaves undisturbed provisions that call for a document to be sent within 30 days or specified formatting rules (such as a 12-point font). But UETA does not impose obligations on either party greater than that imposed by the underlying law and specifically provides that a record may be received even if no individual is aware of its receipt. The NCCUSL drafting committee of UETA explains: “As in the paper world, obligations to send do not impose any duties on the sender to assure receipt, other than reasonable methods of dispatch.” (Uniform Electronic Transactions Act (1999) with Prefatory Note and Comments, Comments to Section 3, p. 19.)
Still, some concepts from the paper world do not translate easily into the digital. For instance, UETA must provide default definitions of “send” and “receive.” The UETA drafting committee explains that to be “sent” under UETA, the electronic information must be properly addressed or otherwise directed to the recipient (a general broadcast message would not suffice). The record will be considered sent once it leaves the control of the sender or comes under the control of the recipient. Records sent through e-mail or the Internet will pass through many different server systems; when more than one system is involved the sender must lose control of the document. A record is “received” when it enters the system which the recipient has designated or uses and to which it has access, in a form capable of being processed by that system. In other words, the system designated by the recipient receives that document, but, just like standard mail, recipients may not know it until they check their mailbox.
Insurance E-commerce. Since so many insurers cross state lines, consistent e-commerce rules play an important role in the industry. Although federal law usually respects state-based insurance regulation, Congress specifically intended ESIGN to apply to insurance. There is evidence to suggest that the insurance industry as a whole tends to use good practices that increase the reliability of e-delivery, especially email, such as monitoring “undeliverable” emails, coordinating with email providers to avoid spam filtering, and taking active measures to ensure that contact information is accurate. Return Path studies inbox placement rates and measures how frequently commercial email reaches the inbox rather than spam folder or just disappears. In its Inbox Placement Benchmark Report 2014, Return Path estimates general inbox placement rates for the U.S.A. at 87%, but a placement rate of 92% for the insurance industry as a whole (the rate is higher when counting actual junk mail properly delivered to a spam folder).
Nonetheless, insurers cannot control many of the factors that might make e-delivery problematic, such as whether the recipient’s information system provides accurate delivery feedback. For this reason, insurance legislation applying UETA to insurance transactions tends to focus on reinforcing consumer consent requirements, providing detailed disclosures, and encouraging best practices.
While UETA establishes the legal effect of an electronic document, two bills, Chapter 433, Statutes 2009 (AB 328, C. Calderon) and Chapter 369, Statutes of 2013 (SB 251, R. Calderon) established specific procedural and substantive guidelines. These bills set up differing sets of obligations based on whether a document merely provides information for future reference or whether the information may prompt the insured to act.
AB 328 authorized electronic transmission of informational-only type documents such as the notice of reasons for refusal to issue a good driver policy, notice of the reasons for cancelling an automobile insurance policy, and others. Pursuant to AB 328, an affidavit of the person who sent the record stating the relevant facts provides satisfactory evidence that the record was mailed, for the purposes of the Insurance Code, absent evidence to the contrary. The affidavit establishes an evidentiary presumption similar to the evidentiary “mailbox rule” (if mail is given to the U.S. Postal service, it is presumed to be delivered). But AB 328 also prohibits insurers from engaging in willful ignorance by imposing an obligation on the insurer to monitor whether the record was sent as defined by UETA. The additional obligation only impacts the legal effect of the record if the insurer receives information that the record was not, in fact, sent.
SB 251 authorized insurers to transmit electronically more sensitive documents that could impact a consumer’s legal rights, including offers of renewal for property and casualty lines that may involve changes to the policy. Along with heightened requirements to document and obtain consent, SB 251 requires an insurer to maintain a process or system that can demonstrate that the document was both sent and received, as defined under UETA, by the information system designated by the consumer. The insurer must follow-up within two business days if it has a reason to believe that the message was not received. Again, an affidavit that the document was sent creates a presumption that the document was properly mailed. But here the affidavit may be even more important because many information systems, such as email services, used by consumers do not provide feedback on receipt. Without the affidavit, the insurer might have to prove receipt using information it might not be able to obtain; such a burden exceeds the requirements of underlying law, is inconsistent with UETA, and may be preempted under ESIGN (which only requires acknowledgment or verification if the substantive law does as well). In the absence of feedback, SB 251 establishes a presumption that the record was properly sent using the affidavit, unless the insurer receives information to the contrary. But it also requires the insurer to actively monitor the status of delivery and follow-up if necessary. Consistent with UETA, SB 251 does not require insurers to assure delivery, but it does not permit an insurer to send a record and avoid or ignore potential warning signs that the record was not delivered.
SB 251 also added new consumer protections that have been mirrored in AB 1131. The insurer must:
Include the insured’s email address on the policy declaration page.
Provide one printed copy of any of the documents free of charge every year upon request.
Retain documentation related to the transaction while the policy is in force and for five years thereafter.
SB 251 also authorizes CDI to suspend the insurer from sending certain documents electronically if there is a pattern or practice that demonstrates the insurer has failed to comply with applicable requirements.
E-delivery of Life Insurance. Unlike prior insurance-related e-commerce bills, this bill addresses life insurance only and establishes standards for most, if not all, life insurance transactions. Life insurance is a long-time commitment that may involve significantly more premium over the life of the policy when compared to other types of coverage. Also, unlike, auto or homeowner’s insurance, consumers do not switch carriers as frequently.
This bill applies UETA to the following documents:
A notice of premium increase for individual policies that must be delivered or mailed.
Notices and statements requiring the signature of either the applicant or agent related to replacement policies or annuities.
Life insurance policies and notices related to the “free look period” that must be mailed or delivered with proof of delivery (such as certified or registered mail).
Notices and transactions pursuant to the Insurance Information and Privacy Protection Act
Consistent with UETA and ESIGN, this bill imposes duties for electronic delivery based on the delivery method assigned by substantive law. If a transaction or record, not excluded from UETA, is required to be sent by first class mail, regular mail, or if substantive law does not provide for a particular delivery method, the record may be sent electronically so long as it complies with UETAs standards. No additional procedures apply, including those provided in AB 328 and SB 251.
Under this bill, if a record must be sent by certified or registered mail, the insurer must obtain proof of “actual receipt” to verify that the document was delivered and specifies the type of evidence necessary to show compliance:
The person acknowledges receipt by returning an electronic receipt or by executing an electronic signature.
The record is made part of, or attached to, an email sent to the email address and there is a confirmation receipt or some other evidence that the person received and opened the email.
The record is posted on the Internet Web site, and there is evidence demonstrating that the person logged onto the site and downloaded, printed, or otherwise acknowledged receipt.
These standards deviate from UETA and ESIGN to the extent an insurer must monitor responses by the consumer beyond acknowledging receipt. However, the heightened standards reflect the challenges of finding electronic delivery equivalents to certified and registered mail. This raises the issue of whether automatically generated delivery receipts equivalent to paper delivery receipts signed by a human being.
Only one transaction has been identified that requires acknowledgment and would be subject to this provision. Most Insurance Code provisions involving registered or certified mail apply to the IC or a consumer, but current law requires an insurer to deliver life policies to the owner in order to start the “free look” period using a method providing proof of delivery. However, this bill also treats notices of termination or nonrenewal with the same care as documents sent by certified or registered mail. While inconsistent with the underlying mailing requirement, even ESIGN does not apply to notices of termination. Given the importance of the documents, these enhanced standards could be viewed as consistent with national standards.
Support The Association of California Life and Health Insurance Companies explains that this bill will help modernize California law to more clearly allow consumers to receive and sign life insurance documents electronically.
Opposition
None received
Questions This bill is double-referred to the Committee on Judiciary. Adoption of committee amendments may unintentionally prejudice the bill given the upcoming legislative deadlines. However, while this bill moves forward, the author may wish to consider the following.
This bill characterizes the effects of Civil Code Sections 1633.3 and 1633.8 as “prohibiting” electronic transactions. Should these references be revised to read that the effect of these sections is to “exclude application of UETA” since UETA does not prohibit any type of electronic transaction, but might leave the underlying delivery method place based on those Civil Code sections? (See proposed Ins. Code § Section 38.6(b)(6) and (7) and (d).)
This bill addresses several contemporary forums of e-commerce, but not all. Should relevant language be revised to allow for more flexibility related to evolving technologies? For example, should language that refers to a website be modified to include a cell phone or tablet application? (See proposed Ins. Code § Section 38.6(b)(7)(C).)
POSITIONS
Support
Association of California Life and Health Insurance Companies (sponsor)
Department of Insurance (sponsor)
American Council of Life Insurers
Oppose
None received
-- END –
AB 1131
Page 1
Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 1131
(Dababneh) – As Amended May 14, 2015
Policy Committee: |
Insurance |
Vote: |
13 - 0 |
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|
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill, until January 1, 2021, permits consumers to receive documents and conduct some transactions related to life insurance, disability insurance, and annuities electronically. It also specifies requirements licensees must comply with in order to use electronic delivery.
FISCAL EFFECT:
Minor and absorbable costs to the California Department of Insurance (CDI) to review and evaluate electronic transmission processes and procedures, and to review documentation provided to those consumers who have opted in to receive documents electronically.
COMMENTS:
Purpose. According to the author, current law needs to be updated to allow broader use of voluntary e-delivery and e-signature of life insurance documents. Current law requires many transactions to have a “wet signature.” This has prevented the life insurers from implementing a completely electronic sales process, presenting challenges to customers and agents, and undermining the benefits to insurers and consumers of full electronic processing. This bill is co-sponsored by CDI and the Association of California Life and Health Insurance Companies.
Background. The California Uniform Electronic Transactions Act (UETA) provides the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from UETA may be conducted electronically, subject to specific rules including opt-in and opt-out provisions. However, current law prohibits the use of electronic transactions for many insurance products. Electronic signature has many benefits, including efficiency, speed, and economy. This bill would allow electronic delivery for some, but not all, insurance products.
Prior Legislation. SB 251 (Calderon), Chapter 369, Statutes of 2013, allowed policy renewal notices for property/casualty insurance policies to be delivered electronically. This bill closely parallels the requirements of SB 251 as it relates to notices and disclosures related to life insurance. However, this bill allows for a broader range of electronic transactions.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
AB 1131
Page 5
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 1131
(Dababneh) – As Amended May 4, 2015
SUBJECT: Life Insurance: electronic transactions
SUMMARY: Permits consumers to receive documents and conduct some transactions related to life insurance, disability insurance and annuities electronically. Specifically, this bill:
Allows consumers to opt-in to receiving a range of documents, notices, and disclosures related to their life insurance policy, disability insurance policy, or annuity (hereafter referred to as life insurance) electronically.
Requires a licensee (generally either a life insurer or life agent) to obtain and document the consent of the consumer before electronically transmitting any life insurance documents.
Requires a licensee, as a condition of transmitting life insurance documents electronically, to disclose the following to a consumer:
Receiving documents electronically is voluntary.
The consumer may opt-out of receiving documents electronically at any time.
The process for a consumer to opt-out of receiving documents electronically.
A description of the documents to be received electronically.
The process for the consumer to change the address used by the insurer.
The licensee's phone number and internet address.
Requires the licensee to provide, upon request of the consumer, a hard copy of any life insurance document transmitted electronically to the consumer free of charge once per year.
Applies existing law governing electronic transactions (Uniform Electronic Transactions Act or UETA) to the transmission of life insurance documents that do not currently require a written acknowledgment of delivery. Provides that the following are acceptable proof of transmission:
simple mail transfer protocol logs indicating the document was sent.
server log files demonstrating receipt of an email message.
server log files demonstrating that the consumer has logged into their secure online account.
Requires the licensee to demonstrate actual delivery of a document for which current law requires a written acknowledgement of delivery. Acceptable proof actual delivery includes:
Electronic read receipt
Electronic signature
Posting the electronic document on the consumers secure online account and that the consumer acknowledged receipt of the document
Requires the licensee to send a hard copy of any document for which a written acknowledgment of receipt is required if the licensee cannot demonstrate that the electronic document was actually delivered.
Requires the licensee to follow-up on any electronic transmission not received by the consumer within five business days by confirming the email address of the consumer and resending the document or providing the consumer a hard copy of the document.
Prohibits charging a fee or offering a discount based on a consumer's willingness to accept electronic documents.
Requires the licensee to confirm the email address of any consumer who elected to receive life insurance documents electronically if more than 12 months have elapsed since the last electronic communication.
Requires the Insurance Commissioner (commissioner) to report to the Governor and the Legislature regarding the impact and implementation of the bill.
Permits the Department of Insurance (department) to suspend the authority of a licensee to transmitting life insurance records electronically if the department can establish a pattern or practice that demonstrates a lack of compliance with the provisions of this bill.
Sunsets the bill effective January 1, 2021.
EXISTING LAW:
Establishes the Uniform Electronic Transactions Act (UETA) and the Electronic Signatures in Global and National Commerce Act (eSIGN) that governs the conduct of electronic transactions and requires that both parties consent to conducting transactions electronically.
Prohibits the use of electronic transactions for many insurance products.
Permits consumers, who opt-in, to receive electronic renewal notices for the following types of insurance policies:
Automobile
Property
Liability
Commercial liability
Workers' Compensation
Requires the insurer to obtain consent from the insured before sending electronic renewal notices.
Requires the insurer to make the following disclosures to the consumer before sending electronic renewal notices and disclosures:
That the insured must opt-in to receiving these electronic documents.
That the insured may opt-out of electronic receipt at any time.
How the insured can change the email address used by the insurer.
Provide the insured the insurer's contact information (including toll free phone number and website address).
Permits an insurer, after obtaining consent from the insured, to send offers of earthquake insurance and renewal notices for earthquake insurance policies electronically.
Requires the insurer to provide the consumer, upon request, a printed copy of the electronic documents to the insured.
Requires the insurer to do one of the following within two business days if the electronic transmission fails:
Contact the insured to confirm the email address and resend the document electronically.
Resend the documents by regular mail to the insured's address.
Permits the department to suspend an insurer's authorization to send electronic documents if the insurer has a pattern or practice that demonstrates a failure to comply with the bill's requirements.
Allows an insurer to appeal this suspension and, when the department determines the insurer has complied with the requirements of the bill, resume electronic transmission of these documents.
FISCAL EFFECT: Undetermined
COMMENTS:
Purpose. According to the author, current law needs to be updated to allow broader use of voluntary e-delivery and e-signature of life insurance documents. While California law largely follows the principles of the federal eSIGN legislation, many life insurance documents are still required to be delivered in hardcopy form, and many transactions still have a “wet signature” requirement. This has prevented the life insurers from implementing a completely electronic sales process, presenting challenges to customers and agents, and undermining the benefits to insurers and consumers of full electronic processing. In advancing this legislation, the department and the life insurance industry are attempting to meet the increasing demand of California consumers to conduct business electronically, and take advantage of the convenience of e-delivery and e-signatures in life insurance.
Electronic Transactions. In 2000 eSIGN was enacted to establish federal law governing electronic transactions. Generally speaking, UETA (adopted by California in 1999) provides that the law should be construed to facilitate electronic transmissions and that any transaction not specifically exempted from UETA may be conducted electronically, subject to specific rules including:
All parties must “opt-in” and may “opt-out” from conducting further transactions electronically at any time.
A record or signature cannot be denied legal effect because it is in electronic form.
If a law requires a person to provide information in writing to another, that requirement is satisfied if the information is provided in an electronic record that the recipient can preserve and access for future reference.
Advantages of Electronic Transactions. Electronic transactions notices have a number of significant advantages including:
Consumer Choice. Many consumers prefer to interact with their financial services companies electronically and current law denies these consumers that option.
Faster Delivery. First class mail is typically delivered within a few days whereas electronic mail is essentially instantaneous.
Cheaper. Electronic delivery will reduce administrative costs for insurers.
Greener. Electronic delivery eliminates the consumption of energy, paper, and other consumables associated with delivering conventional mail.
Disaster Recovery. Natural disasters frequently disrupt mail delivery. Electronic delivery of these notices greatly reduces the potential for disruptions related to natural disasters.
Portability. For the many consumers who do not receive their mail at their primary residence or who change their primary residence frequently, electronic delivery provides a more timely notice.
Previous Legislation. Senate Bill 251 (Calderon) was enacted in 2013 which allows policy renewal notices for property/casualty insurance policies to be delivered electronically. This bill closely parallels the requirements of SB 251 as it relates to notices and disclosures related to life insurance. However, this bill allows for a dramatically broader range of electronic transactions in life insurance including the transmission of key documents requiring an affirmative acknowledgment of receipt by the consumer (including the policy document itself and notices of lapse, termination, cancellation or non-renewal).
Partial Progress. Property/casualty, life, and health insurers have long sought more flexibility in responding to consumer demand for greater electronic commerce options. Last Session, SB 251 made the first significant strides. However, the scope of electronic activity allowed by this bill stands in stark contrast to current law that still prohibits simple, common, consumer initiated transactions in property/casualty insurance. If this bill is enacted consumers would face the incongruous reality of being able to purchase an annuity costing hundreds of thousands of dollars online, but still have to use a paper process to add a vehicle to their automobile policy. This bill recognizes the increasing demand from consumers, who already safely conduct most of their financial affairs online, to bring life insurance products online, and highlights the need to recognize that same demand in other types of insurance products.
Suggested Amendment. The author should consider amending the bill to clarify that notices of lapse, termination, cancellation and non-renewal may be transmitted electronically.
Delete paragraph (8) of subdivision (b) of Section 38.6 and replace it with the following:
(8) Notwithstanding any other provision of law, a notice of lapse, non-renewal, cancellation, or termination for any product subject to this section may be transmitted electronically if the licensee demonstrates proof of delivery as set forth in paragraph (7).
REGISTERED SUPPORT / OPPOSITION:
Support
Association of California Life and Health Insurance Companies (sponsor)
Department of Insurance (sponsor)
Opposition
None received
Analysis Prepared by: Paul Riches / INS. / (916) 319-2086
Discussed in Hearing
32SEC
Assembly Floor
2MIN
Senate Floor
7MIN
Senate Standing Committee on Judiciary
Bill Author
Bill Co-Author(s):