BILL NUMBER: AB 1734	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Hagman

                        FEBRUARY 16, 2012

   An act to add Section 1035.1 to the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1734, as introduced, Hagman. Insurance: Conservation and
Liquidation Office.
   Existing law authorizes the Insurance Commissioner to petition the
superior court of the county in which an insurer has its principal
office for an order vesting title of all assets of that insurer in
the commissioner, in his or her official capacity, under specified
circumstances. Upon taking possession of the property and business,
the commissioner is authorized to act, except as specified, as either
conservator or liquidator. Existing law provides that there is
associated with the Department of Insurance a Conservation and
Liquidation Office with certain duties and obligations.
   This bill would require the Conservation and Liquidation Office to
report and publish corporate claims on a quarterly basis through a
public filing with the court in which an insurer's liquidation
proceeding is pending. The bill would require the office to contact
the claimants whose claims have been allowed, as provided. The bill
would require the receiver, the Insurance Commissioner, or the
Conservation and Liquidation Office, as applicable, upon receipt of
notice that an allowed claim has been assigned to another party, to
take specified actions within 30 days. The bill would prohibit the
office from accepting a claim assignment request 30 days or less
before distribution of the claim or 60 days after the claim
distribution has been made, and would allow the office to charge a
fee to the party requesting the reassignment of the claim to cover
the reasonable costs of administering the reassignment, not to exceed
$250. The bill would also provide that the office be held harmless
from and indemnified against any harm or economic loss suffered by
the claim purchaser due to misrepresentation by the assignor.
   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.  Section 1035.1 is added to the Insurance Code, to read:

   1035.1.  (a) The Conservation and Liquidation Office shall, on a
quarterly basis, report and publish all corporate claims allowed in a
proceeding under this article. The reporting and publication shall
be made through a public filing with the court in which the
liquidation proceeding is pending. Claims covered by the California
Insurance Guarantee Association that are worth less than five hundred
thousand dollars ($500,000) and claims that relate to workers'
compensation shall not be reported and published.
   (b) After a claim has been allowed in a proceeding under this
article, the Conservation and Liquidation Office shall contact the
claimant via a written notice of determination that shall include a
best time estimate as to when a distribution will be made on the
claim. The notice shall provide an opt-out clause to the reporting
and publication process described in subdivision (a), with
instructions for exercising that clause for those corporations that
choose not to have their allowed claims reported and published. A
corporation that chooses to opt-out of the reporting and publication
process may retract that decision at any time and thereafter have the
claim information reported and published pursuant to subdivision
(a).
   (c) Upon receipt of notice that a claim, allowed in a proceeding
under this article, has been assigned to another party, the receiver,
the commissioner, or the Conservation and Liquidation Office, as
applicable, shall, within 30 days, change the payee designation to
reflect the claim purchaser, request further information relating to
the claim assignment request, or reject the claim.
   (d) The Conservation and Liquidation Office shall not accept a
claim assignment request 30 days or less before distribution of the
claim or 60 days after the claim distribution has been made.
   (e) The claim purchaser shall be responsible for ensuring that the
assignor from whom it purchases the claim has the legal authority to
assign the claim. The Conservation and Liquidation Office shall be
held harmless from and indemnified against any harm or economic loss
suffered by the claim purchaser due to misrepresentation by the
assignor.
   (f) The office may charge a fee to the party requesting
reassignment of the claim for the processing of the reassignment. The
fee shall be in an amount not to exceed the reasonable costs of
administering the reassignment, and in no case shall the fee exceed
two hundred fifty dollars ($250).