CA AB786

Establishes that using retained-asset accounts without written prior beneficiary approval is an unfair and deceptive insurance practice.

Requires insurers to disclose that beneficiaries are not obligated to accept retained-asset accounts and can receive full proceeds directly from the insurer.

Mandates disclosure that retained-asset accounts lack Federal Deposit Insurance Corporation protection because insurers are not traditional depository institutions, exposing beneficiaries to potential loss if the insurer becomes insolvent.

Requires insurers to pay all interest earned on retained-asset accounts to beneficiaries, minus reasonable administrative fees.

Establishes civil penalties of up to $5,000 per violation, or up to $10,000 per violation if willful, enforced by the Insurance Commissioner.