BILL NUMBER: AB 459	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 6, 2015

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 amended, 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. 
   Existing law, effective January 1, 2010, provides that any device,
scheme, or artifice designed to give the appearance of an insurable
interest when there is no insurable interest, violates the insurable
interest laws. 
   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  an  insurable interest, to bring an
 action   action, on or before January 1, 2017,
 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.  The
bill would also prohibit an owner of record from commencing an action
against the named insured of the policy seeking damages or any other
remed   y if a court enters a judgment in an action brought
pursuant to these provisions declaring a life insurance policy
invalid on the basis that the policy was issued to a person who
lacked an insurable interest.  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effect only until January 1, 2017, and would then be repealed.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   On or before January 1,
2017, 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) If a court enters a judgment in an action brought pursuant to
this section that declares a life insurance policy invalid on the
basis that the policy was issued to a person who lacked an insurable
interest, the owner of record shall not commence any action against
the named insured of that life insurance policy seeking damages or
any other remedy resulting from the invalidity of the policy. 

   (d) 
    (   e)  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) 
    (   f)  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) 
    (   g)  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.   repealed.