California Considers Expanding Electronic Insurance Transactions

By | June 16, 2009

While California’s economy nears crisis, with the state Legislature’s seeming inability to agree on a budget before the July 1 fiscal deadline, the state Legislature still is evaluting bills for legislative action, insurance measures included.

AB 328, which is being heard this week, would expand the types of insurance transactions that could be handled electronically. According to bill text, “existing law generally permits parties to contract to conduct transactions by electronic means but excepts specific transactions regarding from this permission, including various provisions regarding insurance.” Insurance transactions are required by law to be made by mail.

AB 328 would authorize any required notice related to casualty insurance certain types of insurance on risks or operations in California to be made electronically with the consent of the parties. It would also generally allow an insurer, with the consent of the insured, to pay covered claims by an electronic funds transfer, and would prohibit an insurer from requiring an insured to consent to payment by an electronic funds transfer.

The Legislature also is evaluating AB 470, which would authorize the disclosure of information from an accident report, supplemental report, or investigative report to an insured’s lawyer if the insured is otherwise entitled to obtain the report. According to the bill text, existing law prohibits insurance institutions, agents, or insurance-support organizations from disclosing personal or privileged information collected in connection with an insurance transaction unless a specified exception applies.

Source: California Legislature

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