California lawmakers passed a bill effective January 1, 2013 strengthening senior protection that affects insurance, trust and veterans planners.
The law states that it is “unlawful for any insurance agent who is not licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, if a purpose of the delivery is to sell an insurance product.” This law is aimed at the “trust mills” that use this model in order to “sell” a client an annuity after they deliver a trust.
The law also updates the disclosure notification process to a senior (65 or older) if they are coming to their home, veterans advertising rules, and advertising rules for lead generation and notification.
Several of our California attorneys have reviewed the new laws, and have said that with proper notification and procedures that align with the law, and if our advisors and attorneys follow the proper The Estate Plan procedure, we will be compliant with the new requirements.
Review of the law and a disclosure notice:
CA Law Changes, Eff. 1-1-2013
SEC. 2. Section 785.4 is added to the Insurance Code, to read:
785.4. (a) It shall be unlawful for any insurance agent who is not licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, if a purpose of the delivery is to sell an insurance product. (b) It shall be unlawful for any insurance agent who is licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, unless the insurance agent complies with Section 6175.3 of the Business and Professions Code.
SEC. 4. Section 789.10 of the Insurance Code is amended to read:
789.10. (a) This section applies to the sale, offering for sale, or generation of leads for the sale of life insurance, including annuities, to senior insureds or prospective insureds by any person.
(b) A person who meets with a senior in the senior’s home is required to deliver a notice in writing to the senior no less than 24 hours and no more than 14 days prior to that individual’s initial meeting in the senior’s home. If the senior has an existing insurance relationship with an agent and requests a meeting with the agent in the senior’s home the same day, a notice shall be delivered to the senior prior to the meeting. The notice shall be a stand-alone document, with the appropriate information inserted and without any attachments. It shall be written in 16-point bold type and include all of the following, but no other, information:
(1) The agent’s full name as it appears on his or her California insurance license. (2) The agent’s license number. (3) The agent’s mailing address and telephone number listed on his or her California insurance license. (4) The following disclosure: (A) “I am a licensed insurance agent. My purpose for coming to your home is to sell, discuss, and/or deliver one of the following indicate all that apply]: ( ) Life insurance, including annuities. ( ) Other insurance products specify]: _________________. (B) You have the right to have other persons present at the meeting, including family members, financial advisors, or attorneys. (C) You have the right to end the meeting at any time. (D) You have the right to contact the Department of Insurance for information, or to file a complaint. The notice shall include the consumer assistance telephone numbers at the department] (E) The following individuals will be coming to your home: list all attendees, and insurance license information, if applicable]”
(c) Upon contacting the senior in the senior’s home, the person shall, before making any statement other than a greeting, or asking the senior any other questions, state that the purpose of the contact is to talk about insurance, or to gather information for a followup visit to sell insurance, if that is the case, and state all of the following information: (1) The name and titles of all persons arriving at the senior’s home. (2) The name of the insurer represented by the person, if known. (d) Each person attending a meeting with a senior shall provide the senior with a business card or other written identification stating the person’s name, business address, telephone number, and any insurance license number. (e) The persons attending a meeting with a senior shall end all discussions and leave the home of the senior immediately after being asked to leave by the senior. (f) A person may not solicit a sale or order for the sale of an annuity or life insurance policy at the residence of a senior, in person or by telephone, by using any plan, scheme, or ruse that misrepresents the true status or mission of the contact.
CALIFORNIA DISCLOSURE, SB 1170 1-1-2013 (send no earlier than 14 days prior to meeting)
(1) My name as it appears on my insurance license: ______________ (2) My license number: ______________________________________ (3) My mailing address and telephone number listed on my California insurance license:__________________________________ __________________________________________________________ I am a licensed insurance agent. My purpose for coming to your home is to sell, discuss, and/or deliver one of the following indicate all that apply]: ( ) Life insurance, including annuities. ( ) Other insurance products [specify]: _______________________ (A) You have the right to have other persons present at the meeting, including family members, financial advisors, or attorneys. (B) You have the right to end the meeting at any time. Should you wish to ask me to leave, I will do so immediately. (C) You have the right to contact the Department of Insurance for information, or to file a complaint. The consumer assistance telephone number at the department is: ________________________ (D) The following individuals will be coming to your home:
__________________________________________________________
__________________________________________________________ The purpose of the contact is to talk about insurance, or to gather information for a follow up visit to sell insurance. (1) The name and titles of all persons arriving at the senior’s home_____________________________________________________ (2) Name of the insurer:_____________________________________
Each person attending this meeting shall provide you with a business card or other written identification stating the person’s name, business address, telephone number, and any insurance license number.
