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New California Bill regulates increases to life insurance premiums

Among several laws signed by Governor Jerry Brown on September 2018 is Assembly Bill (AB) 2634, which is intended to protect and assist consumers affected by cost increases in their existing life insurance policies.


Current California law requires a carrier to provide notice for premium increases.


AB 2634 goes into effect for all policies on April 1, 2019 and requires carriers to provide a “summary notice” to a policy owner of flexible premium policies 90 days before any cost of insurance increases. This summary notice must include:

  • The name and definition of “each non-guaranteed element in the current scale of non-guaranteed elements that is subject to an adverse change.”

  • A statement of the current rate or charge, the new rate or charge, and the percentage change.

  • An explanation that the “adverse change” is “based on expectations of the future cost of providing the benefits under the policy, and that the adverse change to the current scale of non-guaranteed elements will reduce the accumulation value and may increase the risk of policy lapse based on continued payment of current premiums.”

  • The date the adverse change will take effect.

The notice also requires carriers to notify the owner of the policy that they have the following options:

  • Do nothing - take no action

  • Pay the additional premium

  • Reduce the policy benefit amount

  • Surrender the policy

  • Convert the policy (if the policy qualifies for a conversion)

The bill also requires carriers to include “an in force illustration of current and future benefits and values whenever the policy is subject to an adverse change in the current scale of non-guaranteed elements” and to advise the policy owner to contact the agent or carrier if there are questions.


Regardless of the type of insurance policy, owners should have their policies reviewed on a periodic basis. If you would like a review of your policy, we welcome your call.

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