BILL NUMBER: AB 459	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Daly

                        FEBRUARY 23, 2015

   An act to add and repeal Section 10110.15 of the Insurance Code,
relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 459, as introduced, Daly. Insurance: insurable interest:
declaratory relief.
   Existing law provides that an insurable interest, with reference
to life and disability insurance, is an interest based upon a
reasonable expectation of pecuniary advantage through the continued
life, health, or bodily safety of another person and consequent loss
by reason of that person's death or disability or a substantial
interest engendered by love and affection in the case of individuals
closely related by blood or law. An individual has an unlimited
insurable interest in his or her own life, health, and bodily safety
and may lawfully take out a policy of insurance on his or her own
life, health, or bodily safety and have the policy made payable to
whomsoever he or she pleases, regardless of whether the beneficiary
designated has an insurable interest.
   This bill would authorize an owner of record of a life insurance
policy, who believes in good faith that the insurer may challenge the
policy for lack of insurable interest, to bring an action for
declaratory relief seeking a court order declaring the policy to have
a valid insurable interest. The bill would limit the applicability
of these provisions to policies issued for delivery in California
prior to January 1, 2010, that have a death benefit equal to or
greater than $1,000,000, and when the owner of record was the owner
of record on the effective date of these provisions. These provisions
would remain in effect only until January 1, 2017, and would then be
repealed.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 10110.15 is added to the Insurance Code, to
read:
   10110.15.  (a) The owner of record of a life insurance policy, who
believes in good faith that the insurer may challenge the policy for
lack of insurable interest, may bring an action for declaratory
relief seeking a court order declaring the policy to have a valid
insurable interest.
   (b) The right of the owner of record of a life insurance policy to
bring an action for declaratory relief under this section applies
only to policies issued for delivery in California prior to January
1, 2010, and that have a death benefit equal to or greater than one
million dollars ($1,000,000). Only the owner of record of a life
insurance policy on the effective date of this section may bring a
declaratory judgment action under this section.
   (c) Nothing in this section shall be construed as limiting an
insurer's existing right to seek declaratory or other relief
regarding the validity of a life insurance policy.
   (d) For purposes of this section, a policy is issued for delivery
in the state of residence of the policy's owner of record on the date
of issue.
   (e) For purposes of this section, "owner of record" means the
owner of a life insurance policy as recorded on the books and records
of the insurer that issued or assumed the policy.
   (f) This section shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.