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:
Article 7.5 (commencing with Section 13550) is
2added to Chapter 2 of Division 3 of the Insurance Code, to read:
3
In furtherance of the enforcement of child support
7obligations in the state, and to enhance efforts to notify the
8Department of Child Support Services when an obligor is owed
9an insurance claim payment, this article establishes and authorizes
10the Insurance Payment Intercept Program.
The department shall consult with the Department of
12Child Support Services to develop a program requiring an insurer
13or a self-insurer to notify the Department of Child Support Services
14of a claim owed to an obligor. The department shall establish a
15procedure identifying the types of claims that the commissioner,
16in his or her discretion, determines to be properly subject to
17withholding to satisfy a child support obligation. That procedure
18shall prescribe an insurer’s or self-insurer’s reporting obligations
19necessary to implement this article. The department shall
20incorporate into its written guidance each of the procedures set
21forth in this section.
For purposes of this article, the following terms have
23the following meanings:
24(a) “Insurer” means an organization organized for the purpose
25of assuming the risk of loss under a contract of insurance or
26reinsurance, and also includes any of the following organizations:
27(1) An admitted insurer.
28(2) A nonadmitted domestic insurer.
29(3) A nonadmitted foreign insurer.
30(4) A nonadmitted alien insurer.
31(b) “Obligor” means a person owing a duty of support.
32(c) “Self-insurer” means an individual public or private entity
33that does not meet the definition of insurer in subdivision (a), but
34that is authorized by this code or any other law to undertake to
35indemnify itself against loss, damage, or liability arising from a
36contingent or unknown event.
37(d) “Support” means a support obligation owing on behalf of a
38child, spouse, or family, or an amount owing pursuant to Section
P3 117402 of the Family Code, and includes past due support or
2arrearage when it exists. “Support,” when used with reference to
3a minor child or a child described in Section 3901 of the Family
4Code, includes maintenance and education.
An insurer or self-insurer that reports information
6pursuant to this article, or who acts in good faith to comply with
7the rules or regulations implementing this article, is not liable for
8those acts under any law to any person.
Until January 1, 2019, the department may issue
10guidance to an insurer or self-insurer regarding compliance with
11this article. This guidance shall be exempt from the rulemaking
12provisions of the Administrative Procedure Act (Chapter 3.5
13(commencing with Section 11340) of Part 1 of Division 3 of Title
142 of the Government Code). Any guidance issued pursuant to this
15section shall remain effective only until the earlier of January 1,
162019, or the effective date of regulations implementing this article
17that are adopted by the department pursuant to the Administrative
18Procedure Act. The department shall consult with the Department
19of Child Support Services when issuing guidance pursuant to this
20section.
An insurer or self-insurer who violates this article shall
22be deemed to have failed to carry out its contract in good faith
23within the meaning of subdivision (b) of Section 704.
O
99