CA AB2634

Requires insurers to provide a summary notice to policyholders of flexible premium life insurance policies within 90 days before an adverse change in nonguaranteed elements takes effect, effective for policies in effect on or after April 1, 2019.

Mandates the summary notice include the name and definition of each affected nonguaranteed element, current and new rates or charges with percentage changes, and an explanation that the adverse change will reduce policy accumulation value and may increase lapse risk.

Requires insurers to provide an inforce illustration of current and future benefits and values for policies designated to use illustrations, based on the insurer's illustrated scale after the adverse change takes effect.

Specifies the summary notice and illustration must include defined language in 12-point type or larger, policy information fields, and a list of policyholder options including paying additional premiums, reducing face value, surrendering the policy, or converting to a different policy type.

Exempts corporate-owned life insurance policies where all benefits are payable to the corporate policy owner; notice requirements apply to adverse changes effective on or after July 1, 2019, and illustration requirements apply to adverse changes effective on or after July 1, 2020.