California Keeps Electronic Disclosures Alive
The insurance commissioner will have to report by Jan. 1, 2022, on how well electronic communications are working.
California life and health insurers can continue to communicate with policyholders through e-mail and other electronic transmissions.
California Gov. Gavin Newsom, D, has signed Assembly Bill 1065 — a bill that extends the state’s Uniform Electronic Transactions Act.
(Related: What You Need to Know About E-Signatures)
The original law was set to sunset Jan. 1, 2021, and some insurers had said they were reluctant to invest in electronic communications systems to fit a law that was on track to expire in the near future.
The law update makes electronic notice transmission authorization permanent.
The new law also uses a new approach to compliance enforcement.
Under the old version of the law, the California Department of Insurance could suspend a life insurer or other licensee from using electronic transmission systems if the company repeatedly failed to comply with state rules.
Under the new law, state insurance commissioner must hold a hearing on the alleged violations. The commissioner can impose a fine of up to $250,000 if the commissioner finds that electronic transmissions violations “have occurred with such frequency as to constitute a general business practice.”
The new law requires the commissioner to report on how insurer use of electronic transmissions systems is going by Jan. 1, 2022.
— Read EBSA Releases Electronic Disclosure Policy, on ThinkAdvisor.
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