Insurance transactions: notice: electronic transmission.

Existing law, the Uniform Electronic Transactions Act, applies to electronic records and electronic signatures of a transaction, and generally prohibits a record or signature from being denied legal effect or enforceability solely because it is in electronic form. Existing law exempts from that act specific transactions. Existing law, commencing January 1, 2021, would exempt specified notices regarding the cancellation, expiration, and replacement of insurance policies from that act. This bill would instead make those notices subject to the act indefinitely. Existing law authorizes an insurer to provide notices of insurance transactions by electronic transmission, if the insurer complies with specified requirements, including that the insurer acquires the consent of the person to opt in to receive the notice by electronic transmission. Existing law, commencing on January 1, 2021, excepts from this electronic transmission authorization any written record that is required to be given or mailed that relates to the business of life insurance. This bill would repeal that exception, thereby indefinitely authorizing written records relating to the business of life insurance to be provided by electronic transmission if the insurer complies with the specified requirements. Existing law, until January 1, 2021, requires a licensee who is 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 who transmits that record electronically, to maintain a process or system that demonstrates proof of delivery and actual receipt of the record. Under existing law, until January 1, 2021, a licensee who transmits a notice of lapse, nonrenewal, cancellation, or termination of an insurance product electronically is also required to demonstrate that proof of delivery. This bill would eliminate the January 1, 2021 sunset date, thereby making those proof of delivery and actual receipt requirements apply indefinitely. Existing law authorizes the Department of Insurance 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 specified requirements regarding those records. Existing law authorizes a licensee to appeal the suspension, as specified. This bill would instead require the Insurance Commissioner, when the commissioner has reason to believe that a licensee has been or is engaged in conduct that violates those requirements, to issue a statement of charges to the licensee and to provide the licensee with a hearing, as specified. The bill would authorize the licensee to obtain a review of the order of the commissioner by making a specified filing in court. The bill would additionally subject any licensee who violates a cease and desist order regarding these requirements to specified civil penalties or a suspension or revocation of a licensee's license, if the licensee knew or reasonably should have known it was in violation of the cease and desist order. This bill would require the commissioner, on or before January 1, 2022, to submit a report to the Governor and to the committees of the Senate and Assembly having jurisdiction over insurance and the judiciary, regarding insurer compliance with laws governing electronic transmissions of insurance transactions.