Insurance: notice of lapse.

Existing law requires an insurance policy to specify certain information, including, but not limited to, the parties to the contract, the property or life insured, the risks insured against, premium, and the coverage period. Existing law, commencing January 1, 2016, and with regard to private passenger automobile insurance that provides coverage for 6 months or longer, specified residential property insurance, and policies of individual disability income insurance that are issued and take effect or that are renewed on or after January 1, 2016, requires an insurer to maintain a verifiable process or adopt a procedure that allows an applicant or policyholder to designate one additional person to receive notice of lapse, termination, expiration, nonrenewal, or cancellation of a policy for nonpayment of premium, as specified. Existing law provides that if an insurer opts to adopt the verifiable process, then the insurer, shall provide the policyholder, within 30 days after the inception of an individual policy, with notice of the right to designate one person. Existing law provides that if a policyholder pays the premium for an insurance policy through a payroll or pension deduction plan, then the notice of the right to designate one person need only be sent within 60 days after the policyholder is no longer on that deduction payment plan. Existing law further requires the application form for an insurance policy to clearly indicate the deduction payment plan selected by the applicant. This bill would delete the requirement that the application form clearly indicate the deduction payment plan selected by the applicant. The bill would make these provisions inapplicable to a policy of disability income insurance if the premiums for the policy are paid entirely by the employer.