CA SB1451

Defines "special benefit" in insurance law to include accelerated death benefits paid to the insured upon qualifying events such as terminal illness, continuous institutional confinement, need for extraordinary medical intervention, chronic illness, or severe cognitive impairment.

Requires life insurance contracts with accelerated death benefits submitted to the Insurance Commissioner include detailed information including policy forms, underwriting restrictions, specimen benefit statements, and an actuarial memorandum signed by an American Academy of Actuaries member.

Mandates actuarial memoranda describe the accelerated death benefit's effects on policy values, expense charges, interest rate methodology (capped at 90-day treasury bill rate or NAIC Model Policy Loan Interest Rate), mortality basis, and sample calculations.

Requires benefit statements disclose potential effects on Medicaid eligibility, governmental benefits, and tax consequences before the insured elects the accelerated death benefit option.