Law now is life insurance policies can't be in secret
Legislation signed by Davis arose from the death of Laci
Peterson and her unborn son
Gov. Gray Davis has signed legislation that obligates insurance companies to inform clients if either spouse could financially gain from the death of the other.
"This is just one more thing we have to notify people about. Frankly, I'm not in favor," said insurance broker Pat Tuohy of San Ramon Insurance Agency.
"This is the kind of legislation that there is no pressing demand for. I do not think there are a bunch of husbands and wives out there secretly buying life insurance -- it is highly unlikely."
Officials said the legislation stems from the death of Modesto resident Laci Peterson.
Prior to her death, her husband Scott Peterson took out a$250,000 policy on her life. Scott Peterson was arrested on suspicion of murder in connections with the deaths of his wife and their unborn son, and has pleaded innocent to the charges.
"This bill would give married couples the assurance that no financial gains are hidden from spouses," Gov. Davis said.
The legislation, introduced as Assembly Bill 1083, prohibits an insurer from issuing life insurance with a face value of $50,000 or more unless the spouse has been notified or has signed the application.
Previously, California did not demand that a spouse be aware of a policy drawn on his or her life.
However, most insurance companies have their own rules.
"I think this (legislation) is a good idea, although, I've never written a life insurance policy that didn't involve the person whose life was being insured," State Farm agent Carol Austin said.
"I think most companies have their own rules about this sort of thing, but if they don't it should definitely be passed. If it can save one life, it would be worth it."
Insurance Broker Don Rizzo of New York Life Insurance in Livermore said he's sure there are reasons why Davis signed the legislation, but noted that most agencies require signatures from both husband and wife.
"This is not going to affect me at all. Typically, if someone is going to gain from (their spouse's) death the other person already knows," Rizzo said.
Broker William Silva of New York Life Insurance says this legislation is not in public interest. "The beneficiary usually has more to gain from the person living than they do dying," Silva said. "That relationship must exist when a policy is issued."