Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would require an insurer to provide the above statement regarding false and fraudulent information on a form upon which a person applies for a policy, seeks to amend insurance coverage, or furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy, instead of when that person applies for a policy or seeks to make a change to an existing policy.

Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would require an insurer to provide the above statement regarding false and fraudulent information on a form upon which a person applies for a policy, seeks to amend insurance coverage, or furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy, instead of when that person applies for a policy or seeks to make a change to an existing policy.

Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would require an insurer to provide the above statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, including any change to coverage affecting the premium, furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy, instead of when that person only when that person applies for a policy or seeks to make a change to an existing policy.

Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would, for purposes of that provision, as it pertains to a life insurance policy, define the specific instances that would constitute seeking to make a change to an existing policy, including an attempt to surrender a policy. would require an insurer to provide the above statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, including any change to coverage affecting the premium, under an existing policy, instead of when that person seeks to make a change to an existing policy.

Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would would, for purposes of that provision, as it pertains to a life insurance policy, define the specific instances that would constitute seeking to make a change to an existing policy, including an attempt to surrender a policy.

Existing law requires an insurer, in connection with an insurance application, contract, or provision, who prints, reproduces, or furnishes a form to any person that applies for a policy or seeks to make a change to an existing policy, among other specified actions, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

This bill would define the specific instances that would constitute seeking to make a change to an existing policy, including an attempt to surrender a policy.

 UNFINISHED BUSINESS 

Bill No: SB 743

Author: Nguyen (R)

Amended: 8/28/23

Vote: 21

SENATE INSURANCE COMMITTEE: 7-0, 4/12/23

AYES: Rubio, Nguyen, Alvarado-Gil, Dodd, Jones, Niello, Portantino

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SENATE FLOOR: 37-0, 5/1/23 (Consent)

AYES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO VOTE RECORDED: Blakespear, Glazer, Wilk

ASSEMBLY FLOOR: 77-0, 9/5/23 - See last page for vote

SUBJECT: Insurance: false and fraudulent claims

SOURCE: American Council of Life Insurers

Association of California Life and Health Insurance Companies

DIGEST:

This bill clarifies when an insurer must disclose that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage. Specifically, this bill requires the disclosure statement be provided on a form upon which a person seeks to amend insurance coverage under an existing policy, instead of when a person seeks to make a change to an existing policy.

Assembly Amendments

change the requirement that an insurer provide a statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, including any change to coverage affecting the premium, to those instances where a person furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy and limits the circumstances to those to only when that person applies for a policy or seeks to make a change to an existing policy.

ANALYSIS:

Existing law:

1. Specifies that making a knowingly false or fraudulent material statement or representation to obtain or amend an insurance policy is unlawful and is punishable by a fine not to exceed $10,000 or imprisonment not to exceed one year.
2. Requires an insurer who prints, reproduces, or furnishes a form to any person that applies for a policy, seeks to make a change to an existing policy, or gives notice of a claim to the insurer, to print or otherwise display in a prominent manner, the statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage, in connection with an insurance application, contract, or provision of contract.

This bill:

1. Clarifies when an insurer must disclose that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.
2. Requires the disclosure statement be provided on a form upon which a person seeks to amend insurance coverage under an existing policy, instead of when a person seeks to make a change to an existing policy.

Comments

According to the author:

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

The statutory provision at issue applied only to “claims” until AB 1511 (Committee on Insurance, Chapter 627, Statutes of 2021) clarified that it applied to all forms sent to a policyholder or applicant, including applications and policy changes. Most communications involving auto or homeowners’ insurance are likely to relate to claims, purchase and renewal. Life insurance generally has a duration significantly longer than the 6 month or 12 month contract period of property casualty insurance. As a result, life insurers tend to have more interactions with policyholders in ways that technically “change” the policy, such as a change of address or email, but do not pose a risk of fraud. Insurers also have to get California Department of Insurance approval for changes to forms.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Assembly Appropriations Committee, no state costs to the Department of Insurance.

SUPPORT: (Verified 9/5/23)

American Council of Life Insurers

Association of California Life and Health Insurance Companies

OPPOSITION: (Verified 9/5/23)

None received

ARGUMENTS IN SUPPORT: According to the Association of California Life and Health Insurance Companies and the American Council of Life Insurers, the sponsors of this bill, "SB 743 will ensure California consumers are not inundated with unnecessary information, and insurance carriers will have a reduced administrative burden."

ASSEMBLY FLOOR: 77-0, 9/5/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Jones-Sawyer, McCarty, Jim Patterson

Prepared by: Karen Chow / SFA / (916) 651-1520

9/5/23 17:08:45

**** END ****

SENATE THIRD READING

STR Bill Id:SB 743

Author:(Nguyen)

As Amended Ver:August 28, 2023

Majority vote

SUMMARY

Requires an insurer to provide a statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, or furnishes information relating to underwriting criteria affecting premium or eligibility for coverage, under an existing policy, instead of only when that person applies for a policy or seeks to make a change to an existing policy.

Major Provisions

COMMENTS

Insurers tend to have many interactions with policyholders in ways that technically "change" the policy, such as a change of address or email, but do not pose a risk of fraud. Therefore, the use of the phrase "change" in existing law is overly broad, because even these minor interactions could trigger the fraud disclosure provisions. This bill seeks to clarify when existing fraud notifications have to be provided by an insurer and that only forms with a nexus to insurance fraud require a disclosure statement. To accomplish this, this bill replaces the phrase "make a change" with the more precise "amend insurance coverage, or furnishes information relating to underwriting criteria affecting premium or eligibility for coverage."

According to the Author

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

Arguments in Support

According to the Association of California Life and Health Insurance Companies (ACLHIC) and the American Council of Life Insurers (ACLI), the sponsors of this bill, "SB 743 will ensure California consumers are not inundated with unnecessary information, and insurance carriers will have a reduced administrative burden."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, no state costs to the Department of Insurance.

VOTES

SENATE FLOOR: 37-0-3

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

ABS, ABST OR NV: Blakespear, Glazer, Wilk

ASM INSURANCE: 13-0-1

YES: Calderon, Essayli, Berman, Cervantes, Chen, Vince Fong, Gipson, Grayson, Jones- Sawyer, Ortega, Soria, Valencia, Wood

ABS, ABST OR NV: Rodriguez

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Sanchez, Soria, Weber, Wilson

ABS, ABST OR NV: Pellerin

UPDATED

VERSION: August 28, 2023

CONSULTANT: Claire Wendt / INS. / (916) 319-2086 FN: 0001311

SENATE THIRD READING

STR Bill Id:SB 743

Author:(Nguyen)

As Amended Ver:June 19, 2023

Majority vote

SUMMARY

Requires an insurer to provide a statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, including any change to coverage affecting the premium, under an existing policy, instead of when that person seeks to make a change to an existing policy.

COMMENTS

Insurers tend to have many interactions with policyholders in ways that technically "change" the policy, such as a change of address or email, but do not pose a risk of fraud. Therefore, the use of the phrase "change" in existing law is overly broad, because even these minor interactions could trigger the fraud disclosure provisions. This bill seeks to clarify when existing fraud notifications have to be provided by an insurer and that only forms with a nexus to insurance fraud require a disclosure statement. To accomplish this, this bill replaces the phrase "make a change" with the more precise "amend insurance coverage, including any change in insurance coverage affecting premium."

According to the Author

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

Arguments in Support

According to the Association of California Life and Health Insurance Companies (ACLHIC) and the American Council of Life Insurers (ACLI), the sponsors of this bill, "SB 743 will ensure California consumers are not inundated with unnecessary information, and insurance carriers will have a reduced administrative burden."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, no state costs to the Department of Insurance.

VOTES

SENATE FLOOR: 37-0-3

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

ABS, ABST OR NV: Blakespear, Glazer, Wilk

ASM INSURANCE: 13-0-1

YES: Calderon, Essayli, Berman, Cervantes, Chen, Vince Fong, Gipson, Grayson, Jones‑Sawyer, Ortega, Soria, Valencia, Wood

ABS, ABST OR NV: Rodriguez

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Sanchez, Soria, Weber, Wilson

ABS, ABST OR NV: Pellerin

UPDATED

VERSION: June 19, 2023

CONSULTANT: Claire Wendt / INS. / (916) 319-2086 FN: 0001310

Date of Hearing: August 16, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 743

Author:(Nguyen) – As Amended Ver:June 19, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill clarifies when an insurer must disclose that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage.

Specifically, this bill requires the disclosure statement be provided on a form upon which a person seeks to amend insurance coverage under an existing policy, instead of when a person seeks to make a change to an existing policy.

FISCAL EFFECT:

No state costs to the Department of Insurance.

COMMENTS:

1. Purpose. According to the author:

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

This bill is sponsored by the Association of California Life and Health Insurance Companies and the American Council of Life Insurers.

1. Disclosure Statement. Existing law requires an insurer to include a prominent statement disclosing that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage on a form furnished to a person applying for a policy, seeking to make a change to an existing policy, or giving notice of a claim to the insurer. However, insurers tend to have many interactions with policyholders that technically result in a “change” to an existing policy, such as updating an address or email, but do not pose a risk of fraud. Therefore, use of the broad phrase “change” in existing law can trigger the required fraud disclosure statement for relatively minor interactions. This bill clarifies that the disclosure statement is to instead be provided on forms that amend insurance coverage, including any change in coverage affecting premium.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: June 28, 2023

ASSEMBLY COMMITTEE ON INSURANCE

Lisa Calderon, Chair

SBPCA Bill Id:SB 743

Author:(Nguyen) – As Amended Ver:June 19, 2023

SENATE VOTE: 37-0

SUBJECT: Insurance: false and fraudulent claims

SUMMARY: Requires an insurer to provide a statement regarding false and fraudulent information on a form upon which a person seeks to amend insurance coverage, including any change to coverage affecting the premium, under an existing policy, instead of when that person seeks to make a change to an existing policy.

EXISTING LAW:

1. Requires an insurer who, in connection with an insurance application, contract, or provision of contract, prints, reproduces, or furnishes a form to a person upon which that person applies for a policy, seeks to make a change to an existing policy, or gives notice of a claim to the insurer, as specified, to include a prominent statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage. (Insurance (Ins.) Code Section 1871.2)
2. Specifies that making a knowingly false or fraudulent material statement or representation to obtain or amend an insurance policy is unlawful and is punishable by a fine not to exceed $10,000 or imprisonment not to exceed 1 year. (Ins. Code Section 1871.7)

FISCAL EFFECT: Unknown

COMMENTS:

1. Purpose. According to the author:

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

1. Discussion. Insurers tend to have many interactions with policyholders in ways that technically “change” the policy, such as a change of address or email, but do not pose a risk of fraud. Therefore, the use of the phrase “change” in existing law is overly broad, because even these minor interactions could trigger the fraud disclosure provisions. This bill seeks to clarify when existing fraud notifications have to be provided by an insurer and that only forms with a nexus to insurance fraud require a disclosure statement. To accomplish this, this bill replaces the phrase “make a change” with the more precise “amend insurance coverage, including any change in insurance coverage affecting premium.”
2. Prior Legislation.
3. SB 1242 (Committee on Insurance) Chapter 424, Statutes of 2022 excluded schedules attached to forms and separate endorsements from the forms included in the requirement.
4. AB 1511 (Committee on Insurance) Chapter 627, Statutes of 2021 expanded the fraud notice from claim forms to all forms, including applications, changes and claims.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Claire Wendt / INS. / (916) 319-2086

 CONSENT  

Bill No: SB 743

Author: Nguyen (R)

Amended: 4/10/23

Vote: 21

SENATE INSURANCE COMMITTEE: 7-0, 4/12/23

AYES: Rubio, Nguyen, Alvarado-Gil, Dodd, Jones, Niello, Portantino

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Insurance: false and fraudulent claims

SOURCE: Author

DIGEST:

This bill, for purposes of including a specified fraud notice on life insurance policies and forms, defines the phrase “seeks to make a change to an existing policy” as any attempt to change an owner or beneficiary of a policy, procure a loan against a policy, make a cash withdrawal from a policy, or surrender a policy.

ANALYSIS:

Existing law:

1. Specifies that making a knowingly false or fraudulent material statement or representation to obtain or amend an insurance policy is unlawful and is punishable by a fine not to exceed $10,000 or imprisonment not to exceed 1 year.
2. Requires an insurer who prints, reproduces, or furnishes a form to any person that applies for a policy, seeks to make a change to an existing policy, or gives notice of a claim to the insurer, to print or otherwise display in a prominent manner, the statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage, in connection with an insurance application, contract, or provision of contract.

This bill, as it pertains to life insurance policies, defines the phrase “seeks to make a change to an existing policy” as any attempt to change an owner or beneficiary of a policy, procure a loan against a policy, make a cash withdrawal from a policy, or surrender a policy.

Background

According to the author:

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

The statutory provision at issue applied only to “claims” until AB 1511 (Committee on Insurance, Chapter 627, Statutes of 2021) clarified that it applied to all forms sent to a policyholder or applicant, including applications and policy changes. Most communications involving auto or homeowners’ insurance are likely to relate to claims, purchase and renewal. Life insurance generally has a duration significantly longer than the 6 month or 12 month contract period of property casualty insurance. As a result, life insurers tend to have more interactions with policyholders in ways that technically “change” the policy, such as a change of address or email, but do not pose a risk of fraud. Insurers also have to get California Department of Insurance approval for changes to forms.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 4/24/23)

American Council of Life Insurers

Association of California Life and Health Insurance Companies

OPPOSITION: (Verified 4/24/23)

None received

ARGUMENTS IN SUPPORT: The Association of California Life and Health Insurance Companies and the American Council of Life Insurers fully support the intended objectives of bolstering CDI’s ability to prosecute insurance fraud. Unfortunately, while working on implementation of new language adopted through SB 1242 last year and AB 1511 in 2021 we realized that applying a fraud statement to any form that “seeks to make a change to an existing policy,” could capture thousands of forms, including many that would have no potential nexus to insurance fraud. By limiting disclosures to only those forms that could have a potential nexus to fraud, SB 743 will ensure California consumers are not inundated with unnecessary information, and insurance carriers will have a reduced administrative burden.

Prepared by: Erin Ryan / INS. / (916) 651-4110

4/26/23 15:12:00

**** END ****

SENATE COMMITTEE ON INSURANCE

Senator Susan Rubio, Chair

2023 - 2024 Regular

Bill No: SB 743 Hearing Date: April 12, 2023

SUBJECT: Insurance: false and fraudulent claims

DIGEST:

For purposes of including a specified fraud notice on life insurance policies and forms, defines the phrase “seeks to make a change to an existing policy” as any attempt to change an owner or beneficiary of a policy, procure a loan against a policy, make a cash withdrawal from a policy, or surrender a policy.

ANALYSIS:

Existing law:

1. Specifies that making a knowingly false or fraudulent material statement or representation to obtain or amend an insurance policy is unlawful and is punishable by a fine not to exceed $10,000 or imprisonment not to exceed 1 year.
2. Requires an insurer who prints, reproduces, or furnishes a form to any person that applies for a policy, seeks to make a change to an existing policy, or gives notice of a claim to the insurer, to print or otherwise display in a prominent manner, the statement that it is a crime to knowingly present false and fraudulent information to obtain or amend insurance coverage, in connection with an insurance application, contract, or provision of contract.

This bill:

1. As it pertains to life insurance policies, defines the phrase “seeks to make a change to an existing policy” as any attempt to change an owner or beneficiary of a policy, procure a loan against a policy, make a cash withdrawal from a policy, or surrender a policy.

Background

According to the author:

This bill is a simple measure designed to clarify that only insurance policy change forms that could have a nexus to insurance fraud require a fraud disclosure statement. This bill will both reduce administrative burdens on insurance carriers, while also ensuring that written communications with consumers focus on pertinent and relevant information.

The statutory provision at issue applied only to “claims” until AB 1511 (Committee on Insurance, Chapter 627, Stat. of 2021) clarified that it applied to all forms sent to a policyholder or applicant, including applications and policy changes. Most communications involving auto or homeowners’ insurance are likely to relate to claims, purchase and renewal. Life insurance generally has a duration significantly longer than the 6 month or 12 month contract period of property casualty insurance. As a result, life insurers tend to have more interactions with policyholders in ways that technically “change” the policy, such as a change of address or email, but do not pose a risk of fraud. Insurers also have to get California Department of Insurance approval for changes to forms.

Related/Prior Legislation

SB 1242 (Committee on Insurance, Chapter 424, Stat. of 2022) last year excluded schedules attached to forms and separate endorsements from the forms included in the requirement.

AB 1511 (Committee on Insurance, Chapter 627, Stat. of 2021) expanded the fraud notice from claim forms to all forms, including applications, changes and claims.

ARGUMENTS IN SUPPORT:

The Association of California Life and Health Insurance Companies and the American Council of Life Insurers fully support the intended objectives of bolstering CDI’s ability to prosecute insurance fraud. Unfortunately, while working on implementation of new language adopted through SB 1242 last year and AB 1511 in 2021 we realized that applying a fraud statement to any form that “seeks to make a change to an existing policy,” could capture thousands of forms, including many that would have no potential nexus to insurance fraud. Examples include forms that update a policy holder’s address, correct their name, or update their email address. Not only is the addition of a fraud statement to these types of documents unnecessary and a distraction to policy holders, it also presents an onerous compliance challenge for insurance carriers. The solution to this oversight is SB 743 which simply defines which types of policy change forms should require the fraud disclosure. By limiting disclosures to only those forms that could have a potential nexus to fraud, SB 743 will ensure California consumers are not inundated with unnecessary information, and insurance carriers will have a reduced administrative burden

SUPPORT:

American Council of Life Insurers (Sponsor)

Association of California Life and Health Insurance Companies (Sponsor)

OPPOSITION:

None received

-- END --