BILL NUMBER: AB 427	CHAPTERED  10/10/99

	CHAPTER   768
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 9, 1999
	AMENDED IN SENATE   SEPTEMBER 9, 1999
	AMENDED IN SENATE   JUNE 22, 1999
	AMENDED IN ASSEMBLY   JUNE 1, 1999
	AMENDED IN ASSEMBLY   MAY 19, 1999
	AMENDED IN ASSEMBLY   MAY 6, 1999
	AMENDED IN ASSEMBLY   APRIL 27, 1999
	AMENDED IN ASSEMBLY   MARCH 22, 1999

INTRODUCED BY   Assembly Member Scott

                        FEBRUARY 12, 1999

   An act to amend Section 11042 of the Government Code, and to amend
Section 1035 of the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 427, Scott.  Insurance:  delinquency proceedings.
   (1) Existing law generally prohibits, with specified exceptions,
any state agency from employing, without the prior written consent of
the Attorney General, any legal counsel other than the Attorney
General in any matter in which the agency is interested.  This
general prohibition specifically applies to the Department of
Insurance in insurance delinquency proceedings.
   This bill would provide that this prohibition also applies to any
state commissioner or officer.  The prohibition would also apply with
respect to any matter in which the state agency, commissioner, or
officer is a party as a result of office or official duties.
   (2) Existing law provides for proceedings in cases of insolvency
and delinquency of insurance companies and authorizes the Insurance
Commissioner to appoint and employ special deputy commissioners,
clerks, and assistants in this regard.
   The bill would provide that any person appointed by the Insurance
Commissioner to serve in the capacity of chief executive officer of
the department's Conservation and Liquidation Office shall be subject
to Senate confirmation.


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


  SECTION 1.  Section 11042 of the Government Code is amended to
read:
   11042.  No state agency, commissioner, or officer  shall employ
any legal counsel other than the Attorney General, or one of his
assistants or deputies, in any matter in which the agency,
commissioner, or officer is interested, or is a party as a result of
office or official duties.
  SEC. 2.  Section 1035 of the Insurance Code is amended to read:
   1035.  (a) In any proceeding under this article, the commissioner
shall have the power to appoint and employ under his or her hand and
official seal, special deputy commissioners, as his or her agents,
and to employ clerks and assistants and to give to each of them those
powers that he or she deems necessary.  Upon appointing or employing
special deputy commissioners, clerks, or assistants, the
commissioner shall notify the Chair of the Joint Budget Committee of
the Legislature, by letter, of the action.  The costs of employing
special deputy commissioners, clerks, and assistants appointed to
carry out this article, and all expenses of taking possession of,
conserving, conducting, liquidating, disposing of, or otherwise
dealing with the business and property of that person under this
article, shall be fixed by the commissioner, subject to the approval
of the court, and shall be paid out of the assets of that person to
the department.  In the event the property of that person does not
contain cash or liquid assets sufficient to defray the cost of the
services required to be performed under the terms of this article,
the commissioner may at any time or from time to time pay the cost of
those services out of the appropriation for the maintenance of the
department, but not out of the assets of other estates.  Any amounts
so paid shall be deemed expense of administration and shall be repaid
to the fund out of the first available moneys in the estate.
   (b) Any person appointed by the commissioner to serve in the
capacity of chief executive officer of the department's Conservation
and Liquidation Office shall be subject to confirmation by the
Senate.