BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 459 (Daly)
Version: July 6, 2015
Hearing Date: June 28, 2016
Fiscal: No
Urgency: No
TMW/me
SUBJECT
Insurance: insurable interest: declaratory relief
DESCRIPTION
This bill, until January 1, 2017, would authorize the owner of
record, who believes in good faith that a life insurer may
challenge for lack of insurable interest a life insurance policy
issued for delivery in California prior to January 1, 2010, with
a death benefit equal to or greater than $1 million, to bring an
action for declaratory relief seeking a court order declaring
the policy to have a valid insurable interest.
BACKGROUND
When an individual needs medical care and other provisions, he
or she may sell his or her life insurance policy at a discount
to a purchaser who will pay more than the cash surrender value
than the insurer would pay to the individual. The purchaser,
expecting the individual to die within a short period of time
after the transfer of the insurance policy to the purchaser,
would then collect the life insurance policy payment when the
individual passed away. This arrangement is known as a
"viatical settlement." The viatical settlement industry began
in the 1980s in response to the AIDS crisis, and by the
mid-1990s, the industry had expanded to include other terminal
illnesses with at least 60 companies in the viatical settlement
business. (See S. L. Martin, Betting on the Lives of Strangers:
Life Settlements, STOLI, & Securitization (Fall, 2010) 13 U. Pa.
J. Bus. L. 173, 185-86.) State statutes were enacted to
regulate the impact of the viatical settlement practice on
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insureds and insurers.
As the life-expectancy of AIDS patients began to increase with
advances in treatments, the investor demand for life insurance
policies insuring the terminally ill exceeded the supply of
individuals wishing to sell their life insurance policies. To
meet this lucrative demand, life insurance agents and life
settlement brokers changed the name of the practice from
"viatical settlements" to "life settlements" and undertook on a
massive scale to persuade senior citizens to purchase life
insurance policies in high-value amounts "not for the purpose of
protecting his or her family, but for a current financial
benefit." (S.L. Martin, Betting on the Lives of Strangers: Life
Settlements, STOLI, & Securitization (Fall, 2010) 13 U. Pa. J.
Bus. L. 173, supra at 187.) With these life settlements, any
elderly life insurance policy owner could sell his or her life
insurance policy to a third-party stranger for quick cash in
exchange for naming the stranger as the beneficiary, and the
stranger, having paid an amount of money less than the amount of
the death benefit, makes a larger return on that investment when
the life insurance policy is paid out upon the death of the
elder.
The life settlement practice poses risks and rewards for
insurers, insureds, and investors. "Some industry commentators
have raised objections, accusing Wall Street of perpetrating
schemes that amount to impermissible gambling on the lives, and
deaths, of others. In response, Wall Street financiers have
insisted that they are committed to complying with state
insurable interest statutes and that their efforts at building a
secondary market for life insurance policies is expanding
consumer options and eliminating the long-standing monopsony of
the insurance companies." (R. Bloink, Catalysts for
Clarification: Modern Twists on the Insurable Interest
Requirement for Life Insurance (Fall 2010) 17 Conn. Ins. L.J.
55.)
In 2001, a significant number of life settlement providers
started purchasing policies for their investment portfolios
using institutional capital. The arrival of well-funded
corporate entities transformed the settlement concept into a
wealth management tool, and began driving a rapid market
expansion until the Great Recession, which began in December of
2007.
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California had relatively few statutes regulating the life
settlement industry until 2009, when SB 98 (Calderon, Chapter
343, Statutes of 2009) established a comprehensive regulatory
system governing life settlement transactions entered into on or
after July 1, 2010, including provisions to make illegal the
practice of stranger originated life insurance (STOLI) and
established new measures to aid in detecting and preventing
STOLI transactions. Consequently, insurers and policy
beneficiaries (life settlement investors) are filing civil
actions to determine whether an insurer is required to pay out
on the insurance contract upon the death of the insured or
whether the insurance contract may be deemed void on the basis
of a lack of an insurable interest.
Although an insurer or investor may file a declaratory relief
action in court when the insurance payout is due, this bill
seeks to establish the ability for an investor to file for
declaratory relief, before the insurer is required to perform
its contractual duties under the life insurance policy, in order
to confirm whether the insurer will pay out on the policy when
it becomes due upon the death of the insured.
CHANGES TO EXISTING LAW
Existing law provides that an interest in the life or health of a
person insured must exist when the insurance takes effect, but need
not exist thereafter or when the loss occurs. (Ins. Code Sec. 286.)
Existing law provides that if the insured has no insurable interest,
the contract is void. (Ins. Code Sec. 280.)
Existing law provides that an insurance 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. (Ins. Code Sec. 10110.1(a).)
Existing law provides that every person has an unlimited insurable
interest in his or her own life, health, and bodily safety, and may
take out a policy of insurance and have the policy payable to
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whomsoever he or she pleases, regardless of whether the beneficiary
designated has an insurable interest. (Ins. Code Sec. 10110.1(b).)
Existing law states that trusts and special purpose entities, other
than charitable organizations, as specified, that are used to apply
for and initiate the issuance of policies of insurance for
investors, where one or more beneficiaries of those trusts or
special purpose entities do not have an insurable interest in the
life of the insured, violated the insurable interest laws and the
prohibition against wagering on life. (Ins. Code Sec. 10110.1(d),
(h).)
Existing law provides that any device, scheme or artifice designed
to give the appearance of an insurance interest where there is no
legitimate insurance interest violates insurable interest laws.
(Ins. Code Sec. 10110.1(e).)
Existing law requires an insurable interest to exist at the time the
contract of life or disability insurance becomes effective, but that
interest need not exist at the time the loss occurs. (Ins. Code
Sec. 10110.1(f).)
Existing law makes void any contract of life or disability insurance
procured or caused to be procured upon another individual unless the
person applying for the insurance has an insurable interest in the
individual insured at the time of the application. (Ins. Code Sec.
10110.1(g).)
Existing law entitles an insurer to rely upon all statements,
declarations or representations made by an applicant for insurance
relative to the insurable interest that the applicant has in the
insured, and provides that no insurer incurs legal liability except
as set forth in the policy, by virtue of any untrue statements,
declarations, or representations so relied upon in good faith.
(Ins. Code Sec. 10110.2.)
Existing law requires an individual life insurance policy delivered
or issued for delivery in California on or after December 31, 1973,
to contain a provision that the policy is incontestable after it has
been in force, during the lifetime of the insured, for a period of
not more than two years after its date of issue, except for
nonpayment of premiums and except for any of the supplemental
benefits, as specified. (Ins. Code Sec. 10113.5.)
Existing law provides that any person interested under a written
instrument, excluding a will or a trust, or under a contract, or who
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desires a declaration of his or her rights or duties with respect to
another, may, in cases of actual controversy relating to the legal
rights and duties of the respective parties, bring an original
action or cross-complaint in the superior court for a declaration of
his or her rights and duties in the premises, including a
determination of any question of construction or validity arising
under the instrument or contract. (Code Civ. Proc. Sec. 1060.) The
person may ask for a declaration of rights or duties, either alone
or with other relief, and the court may make a binding declaration
of these rights or duties, whether or not further relief is or could
be claimed at the time. (Id.) The court's declaration may be
either affirmative or negative in form and effect, and the
declaration shall have the force of a final judgment. (Id.) The
declaration may be had before there has been any breach of the
obligation in respect to which said declaration is sought. (Id.)
This bill , on or before January 1, 2017, would authorize 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, to bring an action for declaratory relief
seeking a court order declaring the policy to have a valid
insurable interest.
This bill would provide that the right of the owner of record of
a life insurance policy to bring an action for declaratory
relief 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 $1,000,000, and only the owner
of record of a life insurance policy on the effective date of
this bill could bring a declaratory judgment action.
This bill would not limit an insurer's existing right to seek
declaratory or other relief regarding the validity of a life
insurance policy.
This bill , if a court enters a judgment in an action brought
pursuant to this bill that declares a life insurance policy
invalid on the basis that the policy was issued to a person who
lacked an insurance interest, would prohibit the owner of record
from commencing any action against the named insured of that
life insurance policy seeking damages or any other remedy from
the invalidity of the policy.
This bill would clarify that a policy is issued for delivery in
the state of residence of the policy's owner of record on the
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date of issue.
This bill would define "owner of record" to mean the owner of a
life insurance policy as recorded on the books and records of
the insurer that issued or assumed the policy.
This bill would sunset on January 1, 2017, and as of that date
would be repealed.
COMMENT
1. Stated need for the bill
The author writes:
The legislation addresses an issue that has arisen in the $30
billion secondary market for life insurance. The primary
players in this market are institutional investors which have
acquired large portfolios containing hundreds of life
insurance policies as part of an asset diversification
strategy for their clients (life insurance policy returns are
uncorrelated to the performance of the broader economy).
Many of the large portfolios acquired by investors contain
policies that were issued during a period when the secondary
life insurance market was largely unregulated and there were
some instances in which policies were procured by insureds who
misrepresented their net worth and income in the applications
for life insurance or who took out their policies solely to
sell them to an investor in the secondary market, a practice
sometimes referred to as "stranger originated life insurance"
(STOLI). The California Legislature began prohibiting these
practices by legislation enacted in 2010 (SB 98-Calderon).
Some life insurers have aggressively challenged the validity
of investor-owned policies-but they typically do not bring
such actions until after a claim is made, even if they obtain
evidence years earlier that raises doubts about the policy's
validity. Unlike with most challenges to a life insurance
policy, which must be made within two years of the policy's
issuance, challenges based on lack of insurable interest have
been held not to be subject to the two-year incontestability
clause required to be included in California individual life
insurance contracts. Cal. Ins. Code [Sec.] 10113.5 (requiring
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individual life insurance policies to contain two-year limit
on contestability); see Hartford Life & Annuity Ins. Co. v.
Doris Barnes Family 2008 Irrevocable Trust, No. CV 10-7560 PSG
DTBX, 2011 WL 759554, at *3 (C.D. Cal. Feb. 22, 2011)
("Nevertheless, an incontestability clause does not preclude a
challenge to a life insurance policy 'on the ground that it is
void ab initio for lack of insurable interest.'"); Paul Revere
Life Ins. Co. v. Fima, 105 F.3d 490, 492 (9th Cir. 1997). As
a result, insurers can seek to rescind a policy for lack of
insurable interest at any time, and frequently choose to wait
until a claim is made.
AB 459 removes the preliminary evidentiary hurdle of
establishing a "probable future controversy" to bring a
declaratory relief action by allowing owners of policies worth
more than $1 million to seek a declaratory judgment on
enforceability without having to go through the costly process
of demonstrating an imminent controversy or anticipatory
breach.
2. Justiciability of life insurance policies
Existing law provides that a life or disability insurance policy
may not be contested after it has been in force, during the
lifetime of the insured, for a period of not more than two years
after its date of issue, except for nonpayment of premiums.
(Ins. Code Sec. 10113.5.) As a matter of public policy,
California gives effect to incontestability clauses in order to
prevent lawsuits to rescind insurance policies based upon claims
of fraud or misrepresentation in the procurement of the policy.
(Mutual Life Ins. Co. of New York v. Markowitz (1940) 78 F.2d
396, 398.) Case law interprets the public policy reasoning
behind incontestability clauses as "the intent of the parties is
to fix a limited time within which the insurer must discover and
assert any grounds it might have to justify a rescission of the
contract." (New York Life Ins. Co. v. Hollender (1951) 38
Cal.2d 73, 237.)
However, California law provides that a policy that is void ab
initio (invalid from the outset) may be contested at any time,
even after the incontestability period has expired. (Crump v.
Northwestern Nat'l Life Ins. Co. (1965) 236 Cal.App.2d 149.) An
insurance policy is void ab initio where the insured lacks an
insurable interest. (Ins. Code Sec. 280.) Thus, where, an
incontestability clause is in effect, an insurance policy may be
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challenged only on the ground that it is void ab initio for lack
of an insurable interest. (Paul Revere Life Ins. Co. v. Fima
(1997) U.S. App. LEXIS 6299.)
Existing law provides declaratory relief in cases of actual
controversy relating to the legal rights and duties of the
respective parties, which authorizes the court to declare the
parties' rights and duties, including a determination of any
question of construction or validity arising under the contract.
(Code Civ. Proc. Sec. 1060.) The author argues that insurers
are bringing actions to make life insurance policies void,
typically filed after the death benefit is claimed, at which
time an actual controversy exists because the policy has
matured. However, the author, citing Mammoth Lakes Land
Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th
435, 463, purports that a policyholder cannot bring an action
for anticipatory breach of their insurance contract absent a
clear, positive unequivocal refusal to perform by the insurer.
Further, the author, citing County of San Diego v. State (2008)
164 Cal.App.4th 580, argues that case law provides that for a
probable future controversy to constitute an actual controversy,
the probable future controversy must be ripe (when the
controversy has reached, but not passed, the point that the
facts have sufficiently congealed to permit an intelligent and
useful decision to be made). Notably, both of these cases
applied to insurance policies issued prior to 2010, which
coincides with the limitation in this bill that only policies
issued prior to January 1, 2010 would be actionable. The author
argues this limitation period is appropriate because it
coincides with the enactment of SB 98 (Calderon, Chapter 343,
Statutes of 2009), which prohibited the practice of an insured
misrepresenting his or her net worth and income in the
applications for life insurance or an insured taking out an
insurance policy solely to sell the policy to an investor,
otherwise known as "stranger originated life insurance" (STOLI).
The author's mention of SB 98 presumes that bill negatively
affected life settlement investors and their ability to confirm
whether an insurer would pay out on the policy or raise an
insurable interest challenge. However, while SB 98 affected the
STOLI market, it did not change the existing law requiring that
there be an insurable interest at the time the life insurance
policy is issued. (Ins. Code Sec. 280.) Accordingly, any
insurable interest challenge an insurer was making before the
enactment of SB 98 would be the same argument the insurer is
making on policies issued after the enactment of SB 98. As
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such, SB 98 did not limit the investor's ability to file any
actions related to the policy.
3. Acceleration of life insurance policy payout determination
In order for a claim to be ripe, and, therefore, reviewable by a
court, there must exist a case in controversy. This bill would
authorize the owner of record of a life insurance policy to file
a declaratory relief action against an insurer seeking a court
order to declare the life insurance policy to have a valid
insurable interest. In this way, this bill seeks to authorize
the owner of record to sue for declaratory relief in advance of
the insurance policy maturing, which would otherwise be the time
the case in controversy becomes ripe. In effect, this bill
would accelerate the case in controversy for the policy owner to
determine whether the insurer will pay the insurance policy
payment due upon maturity or whether the insurer will attempt to
avoid paying out on the policy by claiming that the policy is
not supported by an insurable interest, which would make the
contract void.
According to the author:
Some insurers also have taken the position that policy owners
cannot seek a judicial declaration that a policy is valid
until a claim has been made and rejected by the insurer. This
leaves investors in the untenable situation of paying premiums
on a policy for many years only to have the policy's validity
challenged when a claim for benefits is ultimately made. This
has become particularly problematic as insurers increasingly
seek to retain the full amount of premium collected (often
hundreds of thousands of dollars) while also denying benefits
under the policy.
Policyholders thus face the prospect of paying premiums for
years only to learn upon maturity that the insurer intended to
dispute the policy's enforceability all along. Savvy insurers
can easily avoid an express statement of intent, while the
standards for declaratory relief are vague and subject to
dispute. Moreover, whether a probable, imminent, and/or ripe
controversy exists is a fact-intensive question that must be
answered on a case-by-case basis.
a. Existing declaratory relief action available for policy
owners
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In support of this bill, the author argues that "[i]nsurers
have regularly taken the position in litigation and in private
negotiations that policy owners do not have a right to seek a
declaratory judgment until a claim has been made and denied.
See, e.g., Wilmington Sav. Fund Soc'y, FSB v. PHL Variable
Ins. Co., 2014 WL 1389974, at *8 (D. Del. Apr. 9, 2014). This
has the effect of driving up litigation costs and forces
policy owners to continue paying premiums without any
assurance that a claim on that policy will be paid. As a
result, policy owners who wish to ensure that any individual
policy they are paying premiums on will be honored face
significant cost and litigation on the threshold issue of
whether they can seek declaratory relief, before the
underlying substantive issue of the policy's validity is even
reached."
However, regardless of whether an insurer believes that policy
owners do not have a right to seek a declaratory judgment
unless a claim has been made and denied, the cases provided by
the author demonstrate that policy owners currently have the
ability to bring declaratory actions, and in some cases,
prevail over the insurer's claims. Although the author
provided seven different cases in support of this bill, only
two of them are relevant to California law since state laws
vary as to whether they prohibit or allow insurable interest
claims after two years of the effective date of the policy
when it otherwise becomes statutorily uncontestable by the
insurer. California law allows an insurer after the date upon
which the policy is otherwise uncontestable to seek to have an
insurance policy declared void ab initio (from the start) on
the basis that the policy lacked an insurable interest.
In the author's first California example, Wilmington Savings
et al. v. PHL Variable Insurance Company, et al., U.S. Dist.
Ct., Central Dist. of Cal., Case No. 2:12-cv-04926-SVW-AJWx,
the plaintiffs, life insurance trusts that were the record
owners of life insurance policies with a total face amount of
$466.9 million, filed a first amended complaint for 11 claims
for relief, including declaratory judgment that there was no
basis for rescission or voiding of the policies by the
insurer, that the insurer was barred from rescinding or
voiding the policies, or, in the alternative, that if the
insurer was successful in rescinding or voiding the policies,
the insurer must return all premiums paid for any voided or
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rescinded policy, plus interest. Only the First Amended
Complaint was provided to the Committee, so it is unknown
whether the record owners were successful with their claims.
In the author's second California example, Mosler, et al. v.
Phoenix Life Insurance Co., et al. (2012) 2012 U.S. Dist.
LEXIS 188567, the plaintiffs, record owner investors of two
life insurance policies totaling a face value of $11 million,
filed a complaint against the defendant insurer for
rescission, declaratory relief, negligence, and unjust
enrichment. The plaintiffs' claim for declaratory relief
failed because they had not identified any underlying cause of
action for the relief requested. The plaintiffs claimed that
the insurer refused to execute a form or otherwise provide
confirmation of coverage or the validity of the insurance
policies, which the court determined was not a valid basis for
rescinding the policies or declaring the policies void. The
court noted that the insurer was not contractually obligated
to confirm whether it would pay the death benefit at the time
the policies matured (when the insureds passed away), which
had not yet occurred. In its discussion, the court noted the
insurer had not "stated it will not honor the policies, nor
has it sought rescission. Rather, the insureds appear to have
simply lived longer than PEMGroup, and by extension, the
Receiver [plaintiffs], would have liked. Obviously, the
longer the Receiver is required to make payments to maintain
the Policies, the less profitable the investment becomes with
respect to the total payout. But equity does not support
placing one who has fraudulently procured a policy in a better
position than an honest insured by permitting that party to
declare a rescission at their option when an insured fails to
die in a timely and profitable manner. Absent identification
of a contrary rule in California, or any authority supporting
the availability of a suit for rescission on these facts, the
Receiver has not shown it is entitled to rescind the Policies.
. . ." (Id. at pp. 24-25; emphasis in original.)
Notably, this bill appears to attempt to avoid having to
provide an evidentiary basis on which to seek declaratory
relief (i.e., that the insurer stated it would not pay out on
the policy, or that the insured's misrepresentations created
an uninsurable interest) other than proving the owner of
record's "good faith belief that the insurer will challenge
the policy for lack of insurable interest." Yet, the policy
owner will still have to prove that it is bringing the action
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in good faith and provide evidence sufficient to prove why the
policy owner believes the insurer may challenge the policy for
lack of insurable interest. Arguably, the policy owner may be
required to provide the same factual basis for the declaratory
relief provided under this bill as it would under existing
law.
b. Investors' increasing desire to have insurance policies
validated or declared void is at odds with public policy to
protect insureds, especially elders
The current increased desire for record owner investors to
prospectively determine the likelihood for policy payout can
be traced to the last life settlement boom. According to a
2009 Forbes article describing the pros and cons of entering
into a life settlement agreement, "[d]espite the risks, an
estimated 15,000 policyholders, with death benefits worth $15
billion, completed life settlements in 2007. That's up
fourfold in four years. Behind the rush is a marketing hustle
and Wall Street's hunger for a new asset it can securitize and
sell to investors. Filling some of the vacuum left by the
collapse of the mortgage security business, bankers are hoping
to assemble pools of life settlement contracts and carve them
into investment
shares. . . . Insurers count on the fact that a large number
of policy buyers either cash in their policies or let them
lapse. Having investors in the mix ruins the actuarial
assumptions. Investors in life settlements are typically
seeking 14 [percent] to 20 [percent] annual returns. To help
earn them[,] investors have traditionally followed the
ghoulish practice of cherry-picking sellers with short life
expectancies. A few decades ago, in what was then called the
viatical settlement industry, that meant looking for patients
with [AIDS] and other terminal conditions. These days
investors are making life settlement offers to sellers whom
they expect to live another 10 to 15 years. (W. P. Barrett,
Life Settlement Roulette (Oct. 5, 2009) Forbes
[as of June 14, 2015].)
Notably, the 15,000 policies sold as life settlements in 2007,
if they have not already been challenged by the insurer or
owner of record or matured due to the death of the insured,
will be up for death benefit payout review by the investors in
two years (typically, these policies are reviewed at the
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10-year mark). This bill potentially allows the investors,
who purchased those life settlements and have been paying the
insurance premiums for almost a decade, to reevaluate whether
they should continue to pay premiums if the policy has not
matured within the expected timeframe. If the life insurance
policy survives an insurable interest challenge, the investors
would have faith that they would eventually get the face value
death benefit from the life insurance company, and hopefully
make a profit on their initial investment (the payment to the
insured to purchase the policy). If the insured has outlived
the actuarial projection of the date of death of the insured,
the investors would be able to receive their investment or
policy premium back on an accelerated basis if the policy is
declared void, and either recover the premium payments back
from the insurer on the principles of equity, or recover the
purchase money or the face value of the policy from the elder,
who sold them the now "bogus" life insurance policy. Although
this bill would only authorize the investors to bring an
action for declaratory relief on policies with a death benefit
of $1 million or more, from the investors' view, this is of
course another advantage to dealing only with wealthy people.
However, if the insured sold the policy to pay for medical
care or other needs, the insured may be in a considerably
different financial position than when he or she executed the
life settlement agreement and have little money immediately
available to pay off the investors. Additionally, the insured
is subject to damages payable to the insurer when the
insurance policy is held void ab initio. (Hartford Life &
Annuity Ins. Co. v. Doris Barnes Family 2008 Irrevocable
Trust, et al., 2011 U.S. Dist. LEXIS 25238.)
This bill seeks to advance the judicial review of the policy
before it matures, which may have the unintended consequence
of creating additional civil actions against the insured if
either the insurer or the policy owner is successful in
declaring the policy void ab initio. Accordingly, this bill
was recently amended to prohibit the owner of record of the
policy from filing an action against the insured to recover
premiums lost due to the voided policy.
However, this bill should also prohibit the insurer from
filing an action against the insured to recover any premiums
the insurer was ordered to return to the owner of record or
any other damages claimed by the insurer due to the voided
policy. This bill should also be amended to clarify that the
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policy may be found void, not invalid. (See Ins. Code Sec.
280.)
Suggested amendments :
1. On page 2, in line 19, strike and replace "invalid"
with "void"
2. On page 2, in line 21, after "record" insert "or
insurer"
3. On page 2, in line 22, after "insured" insert "or
the original owner"
4.Burden on courts
This bill, for a one-year period, would authorize policy owners
to file declaratory relief actions on policies issued before
January 1, 2010. This bill would sunset after the one year
period. Given the current budgetary and staffing constraints of
California's civil courts, providing the opportunity to seek a
determination on the insurable interest of thousands of
outstanding policies issued prior to January 1, 2010, may create
an additional, overwhelming burden on the courts. In order to
clarify the legislative intent of this bill to require these
declaratory relief actions to be filed within the limited
time-frame of one year, the bill was amended last year to
clarify that the owner of record must file the declaratory
relief action before January 1, 2017. This bill was originally
set to be heard in the Senate Committee on Judiciary in 2015.
However, the bill was pulled at the request of the author. This
bill should be amended to reflect the one year delay in hearing
the bill.
Suggested amendments :
1. On page 2, in line 3, strike and replace "2017" with
"2018"
2. On page 3, in line 12, strike and replace "2017"
with "2018"
Support : Fortress Investment Group; Institutional Longevity
Markets Association
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Opposition : None Known
HISTORY
Related Pending Legislation : None Known
Prior Legislation :
AB 546 (Stone, Chapter 14, Statutes of 2013), as introduced,
would have made technical, non-substantive revisions to life
insurance insurable interest provisions. AB 546 was
subsequently amended to instead authorize the Santa Cruz Board
of Supervisors to consolidate the duties of the offices of the
Auditor-Controller and Treasurer-Tax Collector.
SB 98 (Calderon, Chapter 343, Statutes of 2009) See Background.
SB 1543 (Machado, 2008) was substantially similar to SB 98 but
was vetoed by Governor Schwarzenegger because the provisions of
the bill were amended into it very late in the legislative
session and he believed some of the provisions were still
subject to worthwhile debate and may have "unfairly excluded
some companies from participating in the legitimate life
settlement market."
Prior Vote :
Senate Insurance Committee (Ayes 9, Noes 0)
Assembly Floor (Ayes 79, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Insurance Committee (Ayes 12, Noes 0)
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