CA AB2404

Requires insurance policies with non-pro rata premium refund provisions (including cancellation fees) to disclose the fees or penalties in writing prior to or concurrent with application and before each renewal, effective January 1, 2012.

Permits telephone application disclosures to be mailed within 5 business days and allows electronic disclosure as an alternative to mailing.

Authorizes the Insurance Commissioner to postpone market conduct examinations for up to 3 years if the prior exam showed no significant negative findings, consumer complaints are in the lowest quartile for that line of business, and no other significant concerns exist.

Exempts ocean marine insurance policies and policies where insurers refund premiums on a pro rata basis from the new disclosure requirements.

Does not require additional disclosure of early cancellation fees if such disclosure is already required by other law.