Bill Text: CA SB585 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance payments: interception.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB585 Detail]

Download: California-2015-SB585-Introduced.html

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BILL NUMBER: SB 585	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Leyva

                        FEBRUARY 26, 2015

   An act to add Article 7.5 (commencing with Section 13550) to
Chapter 2 of Division 3 of the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 585, as introduced, Leyva. Insurance payments: interception.
   Existing law creates the Department of Child Support Services and
provides for the interception of funds from state tax refunds,
lottery winnings, unemployment compensation benefits, and benefits
under the Public Employees' Retirement System that otherwise would be
paid to a person owing past due child support. Existing law creates
the Department of Insurance, headed by the Insurance Commissioner,
and prescribes the department's powers and duties.
   This bill would create the Insurance Payment Intercept Program
within the Department of Insurance. The bill would require the
Department of Insurance to consult with the Department of Child
Support Services to develop a program requiring an insurer or a
self-insurer, each as defined, to notify the Department of Child
Support Services of a claim owed to a person owing a duty of child,
spouse, or family support, defined as an "obligor." The bill would
also require the Department of Insurance to establish a procedure
identifying the types of claims that the commissioner determines to
be properly subject to withholding to satisfy a child support
obligation, and prescribing the duties of an insurer's or
self-insurer's reporting obligations necessary to implement the bill'
s provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 7.5 (commencing with Section 13550) is added to
Chapter 2 of Division 3 of the Insurance Code, to read:

      Article 7.5.  Insurance Payment Interception


   13550.  In furtherance of the enforcement of child support
obligations in the state, and to enhance efforts to notify the
Department of Child Support Services when an obligor is owed an
insurance claim payment, this article establishes and authorizes the
Insurance Payment Intercept Program.
   13552.  The department shall consult with the Department of Child
Support Services to develop a program requiring an insurer or a
self-insurer to notify the Department of Child Support Services of a
claim owed to an obligor. The department shall establish a procedure
identifying the types of claims that the commissioner, in his or her
discretion, determines to be properly subject to withholding to
satisfy a child support obligation. That procedure shall prescribe an
insurer's or self-insurer's reporting obligations necessary to
implement this article. The department shall incorporate into its
written guidance each of the procedures set forth in this section.
   13554.  For purposes of this article, the following terms have the
following meanings:
   (a) "Insurer" means an organization organized for the purpose of
assuming the risk of loss under a contract of insurance or
reinsurance, and also includes any of the following organizations:
   (1) An admitted insurer.
   (2) A nonadmitted domestic insurer.
   (3) A nonadmitted foreign insurer.
   (4) A nonadmitted alien insurer.
   (b) "Obligor" means a person owing a duty of support.
   (c) "Self-insurer" means an individual public or private entity
that does not meet the definition of insurer in subdivision (a), but
that is authorized by this code or any other law to undertake to
indemnify itself against loss, damage, or liability arising from a
contingent or unknown event.
   (d) "Support" means a support obligation owing on behalf of a
child, spouse, or family, or an amount owing pursuant to Section
17402 of the Family Code, and includes past due support or arrearage
when it exists. "Support," when used with reference to a minor child
or a child described in Section 3901 of the Family Code, includes
maintenance and education.
   13556.  An insurer or self-insurer that reports information
pursuant to this article, or who acts in good faith to comply with
the rules or regulations implementing this article, is not liable for
those acts under any law to any person.
   13558.  Until January 1, 2019, the department may issue guidance
to an insurer or self-insurer regarding compliance with this article.
This guidance shall be exempt from the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
Any guidance issued pursuant to this section shall remain effective
only until the earlier of January 1, 2019, or the effective date of
regulations implementing this article that are adopted by the
department pursuant to the Administrative Procedure Act. The
department shall consult with the Department of Child Support
Services when issuing guidance pursuant to this section.
   13560.  An insurer or self-insurer who violates this article shall
be deemed to have failed to carry out its contract in good faith
within the meaning of subdivision (b) of Section 704.